Electoral bonds: No solution to illegal political funding

How do donations via electoral bonds funded by legal or illegal money help curb undue influence on policy makers? Electoral bonds provide an additional of such funds

THE Union Government initiated the Electoral Bonds scheme, which was announced in the Union Budget 2017–18, on January 2, 2018. The aim was “to cleanse the system of political funding in the country”. While many other issues are also germane, the moot question is will this goal be achieved.

These are bearer bonds that private entities can buy from a designated bank (presently the State Bank of India) and donate them to a political party. They are supposedly an anonymous way of donating funds to political parties, since the identity of the donor is not disclosed. The bonds become available around the time of elections, presumably to provide ‘legitimate’ funds to political parties.

Data shows that most of the funds go to the ruling party and help them consolidate their hold over power.

Arun Kumar

Professor Arun Kumar, Distinguished Fellow at TPF, is the Malcolm Adisheshiah Chair Professor at the Institute of Social Sciences, New Delhi and was formerly professor of economics at Jawaharlal Nehru University from 1984 to 2015. He has an MA (Physics) from Princeton University, USA and PhD (Economics) from JNU. His recent book (published in Dec 2020), Indian Economy's Greatest Crisis:Impact of The Corona Virus and The road Ahead, has generated great interest and discussion.