Elections 2024: Electoral bonds may not be Opposition's core campaign issue

Without establishing quid pro quo and given their own handicaps, it is unlikely the Opposition parties can present an effective narrative about 'corruption' involving electoral bonds to the voters

As political parties prepare for the seven-phase general election, will they be effective in swaying the voters on the now-banned electoral bonds issue? Much will depend on the Opposition's ability to establish quid pro quo—to demonstrate that the purchase of electoral bonds was, in fact, rewarded by the ruling party, which received the lion's share of the electoral bonds.

It will also depend on the Opposition being able to build a strong campaign narrative around the scheme. Unfortunately for them, time is short, their means limited, the BJP's propaganda machine outmatches them, and the mainstream media seems disinterested.

Although the election bonds data raises several ethical, legal and business questions, it is impossible to make a foolproof case on any one of these.

Data crunchers and political analysts have only been able to draw correlative conclusions between bond purchases and favourable outcomes for those who donated to the political parties. The government, especially Finance Minister Nirmala Sitharaman, has tried to suggest that no causal relationship can be established from just a temporal sequence.

Still, the correlations are strong enough in some cases to make reasonable speculation. For example, several companies bought electoral bonds in the shadow of raids and investigations by Income Tax (IT) authorities, the Enforcement Directorate (ED), and the Central Bureau of Investigation (CBI), and subsequently, their cases seemed to go into cold storage. This suggests one coincidence too many.

It might also be legitimately speculated that companies in heavily regulated sectors—from lottery and gaming to infrastructure and telecom—bought electoral bonds to influence policy. If a causal link can be shown, this could invite the provisions of the Prevention of Corruption Act.

It is reasonable to assume that we are looking at shell companies where firms have contributed more than 600 per cent of profits to electoral bonds or purchased electoral bonds worth more than 500 per cent of their total equity. The conclusion is inescapable: they are fronts to shield the real donor who had enough foresight to mistrust promises that the purchasers of electoral bonds would remain anonymous. However, without a large-scale investigation, pinpointing who these shadowy political donors are would be impossible.

The Supreme Court's remark that the government had not recognised "the harm of allowing loss-making companies to contribute due to quid pro quo" highlights another failing of corporate contributors. Prior to the amendment to the Companies Act, the cap on corporate donations to political parties was 7.5 per cent of their profits. Loss-making companies could not contribute.

Only 30-odd corporates who have donated in their own name are now known to the public. Without further prompting by the Supreme Court, they owe it to their shareholders to share the names of the political parties they donated to. The shareholders should be allowed to judge whether the amounts invested by the firm in political activity have brought adequate policy benefits to justify the contribution. They should also be free to divest their shares if they disapprove of the donation. Ideally, such information should also be available to the firm's employees so that they can decide whether they want to continue working for that company.

The world over, corporations make donations to political parties to align them with their business interests based on their assessment of which party's policies will benefit the industry. However, the case becomes quite different when companies have donated under the shadow of ED, IT, and CBI. Such forcible reverse alignment of corporations with political interests can necessarily be the "privilege" of only those parties in power at the Centre.

How far such accusations are true will hopefully become clear once the electoral bonds are matched/linked with individual political parties. Only some of the regional parties have offered to voluntarily disclose who gave them the electoral bonds. Obviously the bigger parties want to project themselves as holding the interests of voters above the interests of business. Corporates also do not want people to know how they purchase “access” to decision makers and influence policy.

So without establishing quid pro quo and given their own handicaps, it is unlikely the Opposition political parties can present an effective narrative about 'corruption' involving electoral bonds to the voters. At most, it will remain one of the issues in the Opposition's campaign.

The two main strands of the BJP's strategy of countering the Opposition are that all parties, even the smaller ones, received electoral bonds and secondly, given the number of MPs, they have, the per capita donation to the BJP is far below that of some opposition parties. The suggestion is that no one is innocent and that non-BJP regional parties in the states (especially in West Bengal and Telangana) might also have to explain the rationale for the electoral bonds they received.

Before making the electoral bonds scheme its core campaign issue, the Opposition will probably look back to the failure of a similar campaign strategy in 2019, where it put all its eggs into one basket. Much energy was invested in making the Rafale jet fighter deal into a 'corruption scandal' as the core issue of the 2019 general election. However, it did not work with the voters.

The time left for the Opposition parties to build a comprehensive narrative around the electoral bonds scheme is short, and it cannot afford to make any errors of judgement. They must also consider that the issue will resonate only with a particular class of urban voters.

Meanwhile, corporates will continue to need the state to align with their interests. They will always prefer funding conservative politics if not authoritarian politics, even if it presents a populist face. So, although electoral bonds have been declared unconstitutional, corporate funding of elections has neither become transparent nor has the Supreme Court pointed to a way forward.