A political expert said on Thursday that the restriction on selling electoral bonds is unlikely to have a significant impact on political party finance. In a major decision, the Supreme Court declared the Centre’s electoral bonds program of anonymous political finance to be “unconstitutional”.
Political strategist and analyst Amitabh Tiwari stated that there will be no winners or losers in this. He stated there will be no significant impact on political parties because the majority of their support comes from cash and other sources. In many circumstances, this funds may go unaccounted. Here’s an analysis of statistics and disparities:
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According to a survey by the Association for Democratic Reforms (ADR), the Bharatiya Janata Party (BJP) gathered ₹65,66 crore in electoral bonds from 2017-18, while the Congress collected ₹1,123.3 crore. ADR cites data from the Election Commission of India’s website.
In the 2019 Lok Sabha and assembly elections, political parties spent a total of ₹2994.16 crore, according to an ADR report using ECI statistics. These costs were incurred using cash and cheque/DD, with the balance remaining outstanding.
The BJP spent around ₹1371.82 crore of the total ₹2994.16 crore, while the Congress spent about ₹820.887 crore.
CMS India’s “Poll Expenditure, The 2019 Elections” research estimates that ₹55,000-60,000 crore was spent in 2019. According to the research, an average of ₹100 crore has been spent each Lok Sabha constituency.
The BJP accounts for 45-55% (about ₹24,700 crore) of the total expected spending of above ₹55,000, while the Congress accounts for 15-20% (approximately ₹8,200 crore). This was far more than what the ADR had stated while referencing official numbers.
Tiwari stated in his findings that “…electoral bonds is a very insignificant amount”. According to ADR statistics, electoral bond donations have totaled around ₹11,986 crore over the previous six years. This is far less than the overall cost for a single Lok Sabha election (2019), which is anticipated to be between 55,000 and 60,000 crore.
In a 5-year election cycle, one Lok Sabha and around 30 Vidhan Sabha polls are held, costing an estimated 85,000-90,000 crore.The remainder of the funds are injected into the parties in cash,” the researchers stated.
Political parties might receive funds in the form of checks, coupon sales, crowd-funding, and corporate donations.
Meanwhile, the CMS India study stated, “As the number of billionaire candidates and those with commercial interests has increased in previous elections, candidates are bearing a greater share of the spending. There have been several instances of candidates donating to the party or covering some of the campaign expenditures of other candidates.
Tiwari noted that the absence of electoral bonds might be a problem for corporations and organizations that do not earn income, such as IT services companies. “In industries wherein there is no cash collection/generation, only services is provided, they may not replace electoral bonds with cash donations,” he went on to say. He went on to say, “Political parties will continue to get cash donations and that it cannot be curbed.”
The electoral bond prompted concerns about openness and voters’ right to know because the system promoted anonymous political donations. However, if the fundraising is done in cash and not revealed, the “transparency” issue remains.
Notably, under Section 80GGC of the Income Tax (I-T) Act, donations to any political party, whether made through the now-scrapped electoral bonds or otherwise, are free from income tax. “To claim the exemption, one must donate via cheque or electronic transfer rather than cash,” said Chirag Chauhan, a Mumbai-based Chartered Accountant of CA Chauhan & Company.
Aside from that, the Supreme Court ordered the State Bank of India (SBI) to cease issuing electoral bonds. It directed the SBI to divulge information about electoral bonds encashed by political parties, including the date and denomination.
According to political expert Azaz Alam, this “development could have a notable impact on the BJP, given the significant amount of funds typically transferred to them”. He stated that this is especially important given worries about a political party favoring industry and businesspeople.
His comment came in the wake of the Supreme Court’s decision, which especially targeted the “quid pro quo” aspect that may be associated with electoral bonds, in which donations are linked to future favours. However, Amitabh Tiwari stated, “Quid pro quo will continue, whether with black or white money.” This occurs throughout the planet.”
“It is critical to electoral democracy that the exercise of the right to vote is not subject to undue influence,” the Supreme Court stated on Thursday, declaring the electoral bonds system for political fundraising unlawful.
