The Narendra Modi government announced on January 2, 2018, the rules governing the controversial new electoral bonds scheme.
Narendra Modi’s office later ordered the illegal sale of electoral bonds which was soon picked up as a practice.
The electoral bond scheme was heavily criticised and advised against by the Reserve Bank of India, the Election Commission of India and opposition parties. The scheme was anyway passed which legalised the influence of big businesses to secretly provide hefty donations in the Indian elections.
Arun Jaitley in his 2017 budget day speech announced complete anonymity to donors. The donors would need to reveal the source of funds and political parties need to disclose their source of funds. Another change implemented at the same time removed all limits from the amount of funding given to political parties from corporates.
To implement the same, the government allocated 10 days in January, April, July and October every year for the State Bank of India (SBI) to sell these bonds to donors. The 10 day-window was stretched to 30-days in years of general elections.
The HuffPost India reported after reviewing previously unpublished government documents obtained by transparency activist Commodore Lokesh Batra (Retd.) on how the Prime Minister of India Narendra Modi guided the Finance ministry to go against its laws to approve the unscheduled and illegal sale of electoral bonds twice for state assembly elections.
According to HuffPost India, BJP gathered 95% of the bonds in the very first sale and donation of bonds in March 2018, through its political funding channel. The following data on the amount of funds BJP received through electoral bonds in the run-up to assembly elections during the financial year 2018-19 is still missing.
While the SBI was supposed to open the sale of electoral bonds April 2018, the sale was instead started a month earlier in March. During the first round, BJP managed to buy Rs 222 crore worth of bonds.
When the electoral bond was sale was opened up in April again, bonds worth Rs 114.90 crore were purchased and donated.
Later before the Karnataka polls, PMO requested the sale window to be opened for 10 days. Though the PMO did not explicitly request the reopening for the polls the finance ministry was smart enough to understand. An officer in the ministry said that the PMO asked for the extra window to be reopened in the run-up to the assembly elections.
In a story by the HuffPost, the official said, “Para 8 (2) of the notification regarding Electoral Bearer Bonds issued on January 2, 2018 however, refers to the elections only for the House of People (Lok Sabha),” Vijay Kumar, deputy director in the department of economic affairs handling the electoral bond scheme, wrote in internal file notings on April 3, 2018. “This would imply that additional issuance of Electoral Bearer Bonds cannot be meant for state assembly election.”
Vijay Kumar suggests that the loophole is probably in the rules and need to be changed. He wrote in his April 3, 2018, note that the intent of their draftsmen did not reflect and that the bonds were only to be used for Lok sabha and State Legislative Assembly elections.
However, his suggestion was killed by the secretary for economic affairs, the topmost bureaucrat in the department, S.C. Garg, who said the observation was incorrect.
“This special issue was meant only for Lok Sabha. If we were to open a special window for assembly elections as well, there will be several special windows, sometime, in a year. No need for amendment,” Garg wrote on April 4, 2018.
Vijay Kumar openly talked about the contradiction between the official rules and the demands that came from the PM’s office.
With the mention of PMO, the matter escalated and Garg, the secretary of economic affairs, immediately reversed his stand on the matter. On April 11, 2018, he wrote to the Finance Minister saying that the electoral bonds are only supposed to go on sale four times a year when no p[arliamentary election is scheduled.
The Finance Minister later claimed that the illegal sale of bonds before the Karnatal polls were to be treated and approved as an exception.
The finance ministry told HuffPost India via email that it would not be able to provide detailed responses to specific questions because it was busy preparing next year’s Union Budget, but said that all the decisions were taken “in good faith”.
“All the issues raised in the email are on the policy decisions taken by the then respective competent authorities. In this context, it may be mentioned that in the Government organisations all the decisions are taken in good faith and in the larger public interest. Interpretation of decisions taken may have different perspectives, hence an appropriate explanation may only be given, after taking into consideration all he aspects factored into the decisions making process,” said the finance ministry.
When contacted by the HuffPost India, the PMO’s office did not respond.
