The episode reveals that when a strong executive decides it wants something, even something that is dangerous and unconstitutional, there is little resistance from within to stop it. Many will not know how diabolical the electoral bonds enterprise was, and it is for their benefit that this is being written.
India’s electoral bonds scheme has been declared illegal, a rare win in court for those resisting authoritarianism. But many elections, including the last general election, have been fought on these unlawful funds. It would have been appropriate to have heard and adjudicated on the issue earlier but the court chose not to do so. Former Chief Justice Ranjan Gogoi, rewarded with a Rajya Sabha seat, when asked as to why he had delayed adjudicating on the issue, said he did not remember the issue coming up before his court.
Many will not know how diabolical the electoral bonds enterprise was, and it is for their benefit that this is being written. The scheme was announced by the Narendra Modi government through the 2017 Union Budget. The bonds would be a way for political parties to receive money through anonymous donors. The donor would have to reveal their identity to the bank while making the bond purchase, but the identity would not be revealed on the bond itself. Political parties could accept the money without being required to reveal who gave it. Voters would therefore not know who was funding and influencing political parties.
The change would allow foreign companies and even shell companies to donate to India’s parties without having to inform anyone of the contribution or having their names revealed.
It also undid that part of the Companies Act, under which corporates had to disclose details of their political donations in their annual statement of accounts. Now they were no longer required to do so. The corporates had earlier also been limited to donating a maximum of 7.5% of their average three-year net profits to political parties. No longer, because they could now just go through the electoral bond route as that cap had been lifted legally.
The process to fund a party anonymously was made easy. Bonds would be available in multiples of up to Rs 1 crore at State Bank of India branches in 29 cities. A donor could purchase them through their bank account and hand them over to the party or individual of their choice, who could then encash them. They would be valid for 15 days.
Four days before the 2017 Budget, a bureaucrat spotted it in finance minister Arun Jaitley’s speech, and noted that the RBI’s assent was required for such a large shift. This was because the introduction of bonds required changes to the RBI Act, something that apparently the government did not know. The officer drafted a proposed amendment to align the RBI Act with the change and sent the file up the ranks for the finance minister to see.
The same day, January 28, 2017, a Saturday, the RBI was sent a five-line email seeking its comments. The reply came the next working day, Monday, January 30. The RBI said it was a bad idea because it went against the RBI’s authority as the sole issuer of bearer instruments, meaning cash….
https://thewire.in/government/electoral-bonds-narendra-modi-rbi
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