The Association for Democratic Reforms (ADR) was the lead petitioner in the challenge to the electoral bonds scheme (EBS). It went to court in 2017 when the scheme was first introduced. Jagdeep Chhokar, one of the three founder-members of ADR, is a former professor of IIM Ahmedabad, a trained lawyer, and an ardent campaigner for electoral reforms. He spoke to Frontline on the EBS and why it posed a threat to the very existence of democracy. Excerpts from an interview.
As one of the petitioners in the electoral bonds case in the Supreme Court, how do you assess the present developments?
What the data has revealed is not shocking. It has only reaffirmed what has been talked about for a long time, that political parties were getting huge amounts from the corporate sector. Earlier it was in cash, and when electoral bonds came, it was through bonds. I think the corporate-political nexus is now established. The judgment brings this aspect out in the open. What we found surprising was the attempt by the State Bank of India to prevent, delay, or obstruct the release of the information.
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Does the crux lie in exposing the quid pro quo? Some connections have been made.
Establishing the quid pro quo will happen. What is being reported in the media are selective cases. The more obvious details have come out. But the data is so rich. An in-depth analysis will take a long time. It will mean going into the nuts and bolts and details. Hopefully, there will be some corrective action. The important thing is that any investigation into this data is going to be very complicated because the usual investigating agencies like the ED [Enforcement Directorate] or the Income Tax Department will not be able to do it, not because it is beyond their capability but because these agencies work under the informal guidance or control of the government of the day.
I think the investigation will not be easy as every party has something to hide. I don’t know whether a real investigation can happen even if the party in power changes. How an independent and fair investigation can be done to trace out all instances of quid pro quo, and perhaps take some action, is the challenge.
Do you think this could have been taken up earlier by the court?
I am glad you asked this question. Yes, they could have taken it up earlier. They did take it up twice, but those hearings were not complete. There were interim orders. The scheme was announced on February 1, 2017. It was notified in January 2018. We did not wait for the notification and filed our petition in September 2017. We sensed, based on whatever information was available, that this scheme had the potential to choke the flow of funds to all the opposition parties, and we thought that was not right. The financing system of political parties before 2017 was far from ideal. But the fact that this new feature gave an additional advantage to the ruling party was very disturbing. We have maintained that it would be so regardless of which party is in power. We filed a petition seeking to declare it unconstitutional because of the changes made in several laws. The interesting thing is that we filed it in 2017. And the Lok Sabha election was held in 2019. Nobody mentioned the scheme. Life went on. We filed five applications for early hearings. Either they were stayed or nothing specific happened. Two hearings were held but were perfunctory, not really substantial.
Finally, the Supreme Court decided to hear it in October 2023. It reserved its judgment on November 2, 2023. So once the judgment was reserved, it was up to the court to take a call. After the court verdict, everyone is asking what impact it will have on the election. We said we filed it in 2017. For five years there was no discussion. Had the Supreme Court decided it in 2018, we would have been talking of Rs.500 crore only, not Rs.18,000 crore.
We had only asked for the scheme to be declared unconstitutional. This further process of getting SBI to reveal the data has been done by the Supreme Court on its own. We really compliment the court for going ahead to ensure that at least some part of its judgment gets implemented on the ground.
One of the arguments was that if the identity of the donors was revealed they would be persecuted by a rival political party.
Who does this persecution ultimately? The vindictive action or harassment is done by political parties themselves. No one else is involved. Political parties need money. I completely agree. If someone gives money to another party, there is no need to get upset and take vindictive action against the donor. It requires responsible action on the part of political parties.
Who does this persecution ultimately? The vindictive action or harassment is done by political parties themselves. No one else is involved. Political parties need money. I completely agree. If someone gives money to another party, there is no need to get upset and take vindictive action against the donor. It requires responsible action on the part of political parties.
When demonetisation happened, we were told all transactions would take place digitally. We are the world leaders in Unified Payments Interface or UPI transactions. Why cannot political parties use these applications to get money and spend money? If there is brazen quid pro quo it will get revealed. People have the right to know that a decision to spend Rs.20,000 crore has been made to help the public at large or maybe a particular company. Every decision will hurt or benefit somebody or the other but there will be a sense of equity and balance. The process has to be transparent and known to people. Public authority actions must be seen to be transparent.
Will the scrapping of the bonds bring down election expenditure drastically? One of the main concerns of the ADR was the inordinately large amounts of money that political parties spent during elections.
Election expenditure is a separate story. Every candidate contesting elections has to submit an affidavit on oath giving the break-up of expenditure. But there is no limit on the expenditure of political parties. This in itself is a major loophole. But putting a cap on the expenditure of political parties will not help. In the 2009 Lok Sabha election, we studied the expenditure affidavits of 6,753 candidates. Only four declared they had spent over the limit; 30 said they had spent about 99 per cent of the limit. The disclosure of the bond scheme will not reduce election expenditure. In a television discussion, a former Finance Secretary who had piloted the scheme said only 5 to 7 per cent of the money used by political parties in elections was declared. The rest was in cash. Electoral bonds are also a fraction of that declared money. There is a lot unaccounted for.
Does this mean it will take a long time for a complete overhaul?
Electoral reforms are an ongoing process. But the EBS threatened the very existence of democracy because it put political activity and government action in the hands of big money and big business. Anyone who had big money could influence political and government activity. That is why democracy was at risk. If big money does it through cash or illegally, there is a fear of getting caught. Under the EBS, there was no such fear. It made it legal. So political parties have to be first demonstrably democratic in their internal functioning. And there has to be transparency in their financial affairs. We approached the CIC and a full bench said that the six national political parties are public authorities under the RTI Act.
As it was an issue of electoral reform, shouldn’t the EC have taken suo motu notice of the scheme?
Both the Election Commission and the Reserve Bank of India went on record to say the scheme was not a good one. Apparently, the RBI was told (by the government) that it had not fully understood the scheme.
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Did you anticipate this quantum of money?
The quantum of money was known as every year political parties give details of income and expenditure to the EC, including the value of electoral bonds. What was not known was the donors and the attempt to prevent the disclosures. That was surprising.
What of the role of the SBI?
In its very first affidavit, SBI said it could not give the information. It was under oath. It was only after the court gave a deadline that the SBI complied and gave the information in three days. Whether it is a case of perjury or not perhaps needs to be looked into.
