The electoral bonds scheme has been designed in such a way as to keep the identity of the donor absolutely confidential. The information furnished by the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency. This would protect the donors from any vindictive action by the political parties the donor does not fund.
However, there are certain issues associated with anonymity in the case of corporate donors who donate heavily to political parties.
Neither the purchaser of the bond nor the political party receiving the donation is mandated to disclose the donor’s identity. Therefore, in cases of donations by companies, not only will the shareholders of a corporation be unaware of the company’s contributions, but the voters too will have no idea of how, and through whom, a political party has been funded. This does pose some challenges.
Even as early as in 1957 Chief Justice M.C. Chagla, of the Bombay High Court, wrote that “it is a threat which is likely to grow apace and which may ultimately overwhelm and even throttle democracy in the country”. Chief Justice Chagla ruled that not only the company’s shareholders, but electors too must know how a party is being financed. For democracy, he believed, couldn’t function unless the voters had free and complete access to information about the parties for which they were going to vote. In the absence of complete knowledge about the identities of those funding the various different parties, it’s difficult to conceive how a citizen can meaningfully participate in political and public life.
This anonymity factor in political donations is a problem political observers and analysts have been pointing out for long. Unless finer details of political funding are made available for public scrutiny, room for political-corporate nexus is not ruled out.
A political party can have tacit understanding with a particular corporate to a return a favour (in the form of a policy change or a directive) in exchange of a hefty donation.
A report from Association of Democratic Reforms (ADR), which collates data on funding of political parties, showed various political parties received Rs 7,833 crore of funding from unknown sources between 2004-05 and 2014-15, which constitutes 69 percent of their total income during the period. Given the huge amount of ‘anonymous’ donations in the past, a possibility of an unholy nexus between corporates and political parties cannot be ruled out.