Alleging haste and indiscretion in approval of the electoral bonds scheme by then Finance Minister Arun Jaitley is an unsophisticated hit job. HuffPost is again at its old habit of inflicting negative sensationalism on the Modi sarkar.
If in the run-up to the Budget presentation, things move faster than usual and if the Modi sarkar has transformed the way government works in India by chasing its objectives and goals with speed then it is something Indians are very happy about.
To accomplish the business of governance like a serious business is no sin! Thus, all the alibis, all the allegories and all the insinuations about haste are drivel.
If the allegation is about rushing in to bring this reform, why can the publication not see that a government in the final year of its term is keen to implement the change it sees constructive before going to the hustings again? How could the ruling party gain by bringing in this reform? There is no explanation in the allegations since there is no explanation possible. Insinuation is a subtle art. When subtlety is sacrificed, insinuation becomes vested agenda.
Now let us examine the allegations as made by HuffPost about the harm these electoral bonds could do to India, along with gains to those in power and that the Reserve Bank of India (RBI) was only ceremoniously called in to opine at the eleventh hour but its suggestion was ignored completely.
If these electoral bonds had not come into place, here's what would be happening: large unaccounted swaths of cash would have continued to pour into political parties. Electoral bonds provide anonymity but do not provide immunity from breaking any law. Principles of natural justice suggest that unless a new law repeals any specific prior laws, all existing law will have to be followed.
Even if anonymity is provided through these bonds, it does not mean unaccounted cash gets converted into these bonds or that hot money or blood money with criminal background could fund elections.
Anonymity of bonds does not mean a formal banking transaction is not required to buy the bonds or for encashment by the donee political organisation! Anonymity does not mean anyone can drive in a truck load of cash into a bank and without disclosing his name or identity can buy these bearer bonds. Anonymity never provides at any stage the ability to print these electoral bonds and hand over to any political party. So why is anonymity being projected to be the seed of endless ills?
If Arun Jaitley could innovate Indian polity to introduce donations that are accounted for in the formal banking system, it is a quantum leap of probity.
Anonymity is accorded only to the extent that the donor business organisations, a.k.a. the corporate do not have to disclose just about to everyone who received their political donations. This only serves one purpose: various political parties holding fiefdoms on the corporate cannot intimidate them for the choices they make in donating to various political parties.
Anonymity certainly still requires that a donor must approach an agency selling these electoral bonds and pay for purchase of these bonds with accounted money. A donee political party cannot just buy its stationery, PR or pay for its electoral expenses with these bonds. A political party has to deposit these into its bank account and obtain the formal cash (electronic or physical) and expenses incurred from these bonds have to be accounted for.
Why has HuffPost missed out on purpose that the shelf life of these electoral bonds is only 15 days? The concerns raised by the RBI that bearer bonds can end up functioning like money in circulation has been well taken care of by the government with the provision of allowing only a tight fifteen days shelf life to electoral bonds.
It is not fair on the part of any publication--particularly an international publication--to say that the Government of India was merely ceremonious in soliciting an opinion from the RBI and it was prejudiced in ceremony to just anyhow dismiss the apex bank.
From an unaccounted system of how much money came into a political party and where it was spent, these electoral bonds have at least put a leash on income and expenditure on elections by a political party. Is that a quantum leap or not?
Will it be easy to pay for country liquor, unlicensed arms, cash bribes at elections?
The anonymity accorded upon the corporate donor does not absolve the businesses to breach any legislation. So what if an age-old restriction that only 7.5% of profits of prior years could be incurred on political donations has been eliminated? Pruning of archaic laws is prudent. If a company donates from resources other than its profits, then those resources can be deciphered from its income and expenditure statements and from its balance sheet.
Now, if a single political party received 90% of electoral bonds within a certain window of time, instead of accusing them why not question why all other political parties chose only 10% of the electoral bonds which would have accounted their income--and expenses? May be this one political party wasn't keen on spending on country liquor, unlicensed arms and cash bribes to the electorate?
Even if anyone is imagining that say Company A bought the bonds formally from its bank account and given they are bearer bonds the donation is made by Company B or Person C to a political party, it is not at all possible that B or C can obtain these bonds from Company A without paying the due consideration. If B or C is paying unaccounted cash to Company A for obtaining these bonds then that has been the practice prevalent since independence. At least now there are two formal documented and accounted ends for any cash that is changing hands.
Trust the tax authorities to decipher as and when A, B or C need to be brought to justice. The basic thumb rule of cleansing any financial system is to motivate and induce the hoarders of cash to enter the formal system. It creates a paper trail, accounting details and identifies several human faces within the penumbra of black money. From cluelessness to more than enough clues--that's what electoral bonds have achieved for India.
The allegation that pre-defined windows of issuing electoral bonds once per quarter were violated is a pointless conspiracy theory. If donation time windows were extended, it's for the benefit of the electoral system since it provided more opportunity for probity and accounted election expenditure.
Here is why additional Electoral Bond issuance windows had to be created: Election dates are not decided by the Election Commission as per the one window of ten days per quarter and the shelf life of an Electoral Bond is only fifteen days.
If additional windows of issuance were not created, the shelf life of the Electoral Bond would have to be increased which would have indeed turned these bonds into instruments of storing and trading unaccounted cash.
Electoral bonds have not made dishonest Indians honest in one stroke but certainly made dishonesty a far tougher business to be in, business of politics included.
(The author is a Mumbai-based investor and founder of stock research firm KEDIANOMICS)
DISCLAIMER: The views expressed in the article above are those of the author and do not necessarily represent or reflect the views of Business Today