The Narendra Modi government opened three windows for the sale of electoral bonds in 2018 ostensibly in violation of the Electoral Bond Scheme 2018, suggest documents accessed through the Right to Information Act. The three windows were opened before and after assembly elections in nine states that year.
Electoral bonds are a financial instrument used to fund political parties in India. More than Rs 10,000 crore have been funnelled into parties since they were introduced.
A document of the Ministry of Finance, accessed by activist Commodore Lokesh Batra, says that the Centre opened windows for the sale of electoral bonds in March, May and November, 2018, in addition to similar windows in April, July and October that year.
The Electoral Bond Scheme, notified in January 2018, only allowed the sale of electoral bonds in January, April, July and October months in a non-Lok Sabha election year.
The Centre, however, opened three additional windows between March 1 and 10, May 1 and 10, and November 1 and 10 in 2018. According to the document, the March window was opened “in lieu of the January 2018 notifications”, adding that “Meghalaya, Nagaland and Tripura elections were held in Feb 2018”.
The May window was opened for the assembly elections in Karnataka, the document adds, and the November window in the run-up to the assembly elections in Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Telangana.
The document was prepared by the Budget Division of the Department of Economic Affairs in the Ministry of Finance.
The government’s bonds sale ostensibly violates the periodicity section of the Electoral Bonds Scheme 2018. It says: “Bonds under this Scheme shall be available for purchase by any person for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government.”
Another clause in the section adds that bonds can be sold in “an additional period of thirty days” that “shall be specified by the Central Government in the year of general elections to the House of People.”
General elections in India were held in April and May 2019.
Batra told Newslaundry that the government's decision to open the sale in March 2018 has a “colour of illegality”. “In 2018, If the government did not conduct sale of electoral bonds in the month of January as prescribed in the notification, the law did not and even now does not provide an option to the government to hold the sale of electoral bonds in lieu on any alternative month.”
On the sale in May and November, the activist said the law also did not allow the government to “open special sale windows during the assembly elections” which were “clearly against the law of the land that existed at that time”.
Earlier this month, on November 7, five days before the assembly elections in Himachal Pradesh, the Modi government amended the Electoral Bonds Scheme to allow the sale of electoral bonds before assembly elections.
The amendment inserted a new clause to the periodicity section of the act. The clause said that the scheme will provide “an additional period of 15 days” to sell bonds “in the year of general elections to the Legislative Assembly of States and Union Territories with Legislature”.
Electoral bonds, introduced controversially by former Finance Minister Arun Jaitley in 2017-18, have been criticised for reducing transparency of political funding in India.
Data shows that the governing Bharatiya Janata Party has profited the most from the bonds.
Newslaundry reached out to the Ministry of Finance and the Election Commission for comments. This report will be updated if we receive a response.
Newslaundry is a reader-supported, ad-free, independent news outlet based out of New Delhi. Support their journalism, here.
