Withdraw Electoral Bonds

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AUDACITY OF GREED – ELECTORAL BONDS

In his valiant but inglorious attempt to justify the introduction of electoral bonds, the learned Finance Minister Arun Jaitley contended in his Facebook post on January 7, 2018 that the bonds will bring clean money and some transparency into the funding of political parties. The mask has fallen rather too early. The concept of electoral bonds in its present form will go down in the history of independent India as the supreme example of monstrous greed, ethical elasticity and moral flexibility on the part of present dispensation. No amount of what-aboutism and sophistry can justify the creation of this Frankenstein. Was it due to non-application of mind or plain and simple intellectual lethargy? Only the future generations would be able to answer this question. But its outcome is crystal clear to any person, whose education was not badly neglected.

ELECTORAL  BONDS

Electoral bonds are bearer instruments that can be purchased by a potential  donor from the State Bank of India only by a banking instrument.  Subsequently, he may hand over these bonds to a particular political party, which can redeem them only by depositing in pre-declared bank account. Consequent upon the amendments in the Reserve Bank of India Act, 1934, the Representation of the People Act, 1951, the Income Tax Act, 1961, the Companies Act, 2013 and the Foreign Contribution Regulating Act, 2010:

(i) The political parties need not disclose in their annual contribution reports the names and addresses of donors who made their contributions  by way of electoral bonds;

(ii) The companies are not required to disclose in their annual statements of accounts  the names of the political parties to which a contribution has been made;

(iii) Contrary to the earlier cap of 7.5% of average profit on donation to political parties, the companies including those that are loss-making can now make donation of any amount;

(iv) Foreign companies having subsidiaries in India are allowed to give donations by way of electoral bonds to the political  parties.

ALL MONEY IN BANKS IS NOT CLEAN

As a trained advocate and a person insulated from first-hand and authentic information about trade and business practices, he may be fully justified in harbouring his fallacy that all the money in banks is ‘clean’ (to use his own term). But as the Finance Minister of ‘the biggest democracy in the world’, he should have shown more awareness of ground realities. Had all the money in banks been clean, there would have been no ‘Panama Papers’ and ‘Paradise Papers’. Does he still think that all terrorist organizations in the world are financed in cash with truck-loads of currency moving around? The fact is that more illegal and crime money is circulated through legal banking channels than all currency notes one can think of in one’s wildest dreams.

ALL  CASH IS NOT BLACK

Simiarly, all cash is not black, as he must have realized after watching the horrific results of the catastrophy called demonetization. More than 100 persons died due to this quixotic decision. Tragic as it was, far more tragic was the loss of faith in the banking system and the government in particular. No one in complete control of one’s mental faculties would ever keep in banks the money set aside for emergencies!! No surprise that our citizens are holding an estimated gold stock of more than 36,000 (thirty six thousand) tonnes. (If any of FM’s learned officers has sufficient time to convert it into rupees, please ask him to do so. And then, for God sake, think about the amount of goodwill and credibility the government is enjoying.)

TRANSPARENCY?

With regard to the contention of the finance minister that electoral bonds will bring about more transparency in funding of the political parties, it can be safely stated that it has no legs to stand on. The main purpose of making funding of the political parties transparent, is to break the backbone of the corrupt donors who pay unaccounted  money to political parties in return for the largesse and favours showered upon them. In the present set-up, the political parties are not required to mention names and addresses of donors along with the corresponding amounts received by way of electoral bonds in their annual contribution reports submitted to the Election Commission of India. This report is very significant, as it is published by the Election Commission of India on their website and gives an authentic version of the donations received by a political party. Now adding  an insult to the  injury, the government has also stipulated that the donor companies are not required to show the break-up of their contributions made by way of electoral bonds to different political parties in their annual statement of accounts. In the circumstances, the electorate will not be able to find out which individual or company has funded which political party and to what extent. Thus, the whole exercise will have the effect of de-criminalization  and legitimatization of corruption and black money. Shifting the burden of corrupt practices from the donee  to the doner,  can by no stretch of imagination be called a reform in political funding. By hiding the money-trail, the government is making it  impossible to link  the tainted money to a particular political party receiving such funds. In fact, the government’s  attempt to hide the money-trail is indefensibe.  By the way,  hiding the money-trail is the favourite activity of international financial crooks!!!!

FLOODGATES OPENED

With the removal of ceiling of 7.5%  of the net profit which a company can contribute as donation to political parties, the floodgates of corporate funding  have been opened.  Coupled with the fact that even a loss-making  company can donate, the chances of companies being floated for the sole purpose of political funding have also increased exponentially. Now imagine a scenario, where  even the foreign companies having subsidiaries in our country can make use of such an opaque and free-for-all system to gain undue advantage at the cost of the citizens of the country!!

MOUNTING  NPAs

It is beyond dispute that money should never be allowed to dominate  politics,  especially so in a democracy. But, when the money being given for political funding, has an ulterior motive attached to it, the consequences may well turn out to be disastrous. It is a well-known fact that non-performing  assets of public sector banks increased from Rs 2.16 lakh  crore as on March 31, 2014 to Rs 7.33 lakh crore  as on September 30, 2017. Recently,  Deputy Governor of the  Reserve Bank of India has blamed the poor risk pricing skills of banks for the NPAs  pile-up of over Rs. 10 lakh crores.    He  said: “ It would be safe to assume that had proper risk pricing been done, many of the current NPAs could have been properly assessed very  well in advance.” Moreover, the learned finance minister stated in the parliament that this situation was created by aggressive lending by public sector banks before 2014. Unfortunately, the question, which was left unanswered by the government is: How many bank officials have been punished for squandering public money?

HEAVILY  INDEBTED PRIVATE SECTOR

To refresh the memory of the present dispensation,  the figures in brackets after the name of the company are given  to show the huge amount of debt owed by these top companies :  Reliance Group (Rs 1.25 lakh crore), Vedanta Group (Rs 1.03 lakh crore), Essar Group (Rs 1.01 lakh crore), Adani Group (Rs 96,031 crore), Jaypee Group (Rs 75,163 crore), Jindal Group (Rs 58,171 crore), GMR Group (Rs 47,976 crore), Lanco Group (Rs 47,102 crore), Videocon Group (Rs 45,405 crore) and GVK Group (Rs33,933 crore).

These  figures, based on the report “House of Debt” companies published by Credit Suisse for financial year 2015, appeared in FP India. In the circumstances, will it be prudent to take money from these heavily indebted companies for funding the political parties?

CLIMATE CHANGE & POLLUTION IGNORED

Unfortunately, the story does not end here. Inspite of the fact that the prime minister attended the Paris Climate Summit and participated in the meeting of the World Economic Forum in January 2018, he is least concerned about the climate change  and its impact on our economy. By now the government should have been well aware of the  fact that the industries, which are dependent on fossil fuel, have no future. The banks should have desisted from financing companies whose survival is dependent on manufacture, distribution and sale of fossil fuels. It is, therefore,  quite reasonable  to conclude that the political parties which are taking donations from such  companies are not guided by the public interest but the base and depraved impulse of personal aggrandizement. Has the government yet instructed the public sector banks to stop financing companies and industries dependent on fossil fuel? The answer is: No.   If such companies have no future, how on earth will they be able to pay back their loans?  It is high time for the government to stand up, do some serious thinking and start moving in the right direction for the future of this country. It appears that they have not learnt any thing from history. It is worthwhile to remember that only one and a half centuries back, the whole of India was ruled by a private company having its own army, engaging with indigenous rulers on its own terms!!

RIGHT TO CLEAN ENVIRONMENT

The Deputy Secretary-General of the United Nations Amina J. Mohammed said that a clean environment must be a right, rather than a luxury. According to  the latest World Economic Forum Global Risk Perception Survey, environmental risks have grown in prominence in recent years. To counter global warming and the degradation of the global environment, various steps have been initiated to shift away from coal and other fossil fuels in the past two years.The  UN Sustainable Development Goals and the Paris Climate Agreement provide an opportunity to fundamentally shift the way we produce,  consume and safeguard our natural wealth.

 

QUITTING  COAL

According to new research from CoalSwarm and Greenpeace, more than a quarter of the 1,675 companies that owned or developed coal-fired power capacity since 2010 have entirely left the coal power business. While many generating companies go through this rapid makeover, the research also shows that a total of 23 countries, states and cities will have either phased out coal-fired power plants or set a time-limit to do so by 2030. To date, six countries, states, provinces or cities have completey phased out coal power since 2014, and an additional 17 have announced a coal power phase-out date of 2030 or sooner. Three of the G7 economies and a total of eight  EU countries have decided to phase out coal – Netherlands joining the  list only recently.  Meeting the objectives of the Paris agreement requires all OECD countries to close their coal-fired power plants by 2030, so it high time for other countries to follow the example. Despite President Trump’s  rhetoric about reviving the coal industry, decisions to retire coal plants in the US have continued in 2017 at the same rapid rate as the year before, with 54 units announcing retirement, a total generating capacity equal to all coal-fired power plants in Spain. Record amounts of coal-fired capacity were retired in past two years, and the  growing number of phase-out policies means the trend will acceerate.

INVESTMENT DECLINES IN FOSSIL FUELS

 Lloyd's of London, the world's oldest insurer, have decided to exclude coal  from its investment strategy from April 2018. Other big UK and European insurance companies,  including Aviva,  Allianz,  Axa,  Legal & General, SCOR, Swiss Re and Zurich,  have been shifting away from coal and other fossil fuels due to concerns about climate risks.  According to a recent report from Unfriend Coal Network,  about £15 bn has been divested by insurers in the past two years. It said 15 companies have fully or partially cut financial ties by selling their holdings in coal companies and refusing to insure their operations.  It was a 'watershed' moment,  when New York City announced that it would seek to divest its pension funds from fossil fuels within five years and that it filed suit against five fossil fuel giants for their role in driving the climate crisis.  The city's senior director of Climate Policy and programs said, "Today, after a decades-long pattern of deception and denial by fossil fuel companies,  New York City is holding them to account." Comptroller Scott  M. Stringer said, "This is a first-in-the-nation step to protect our future and our planet - for this generation and the next."

 

BAN ON DIESEL  AND PETROL VEHICES

New diesel and petrol cars and vans will be banned in the UK from 2040 in a bid to tackle air pollution, the government has announced. France will also stop selling petrol and diesel vehicles by 2040.   Scotland also revealed a target to phase out the need for new petrol and diesel vehicles by 2032, and the creation of low emissions zones in Scotland’s four largest cities by 2020. The move will see Scotland replicate cities and countries (including Madrid and France) which have announced similar plans.

INDIA  LAGS BEHIND

The 2018 Environment Performance Index ranks 180 countries on 24 performance indicators.  The report is  produced by researchers at Yale and Columbia Universities in collaboration with the World Economic Forum. While Switzerland leads the world, India is placed at 177th near the bottom,  reflecting  poor management of industrialization and urbanisation. "Low scores on EPI are indicative of the need for national sustainability efforts on a number of fronts,  especially cleaning up air quality,  protecting biodiversity and reducing GHG emissions" , said the report.

THE  LANCET COMMISSION

In the report published on October 19, 2017 by The Lancet Commission on pollution and heath, it was found : ‘Pollution is the largest environmental cause of disease and premature death in the world today. Diseases caused by pollution were responsible for an estimated 9 million premature deaths in 2015 – 16%  of all deaths worldwide – three times more deaths than from  AIDS, tuberculosis and malaria combined and 15 times more than from all wars and other forms of violence.’  India fared worst, with 2.5 million people dying early because of pollution, followed by China with 1.8 million  deaths,  according to the report. Pollution is very costly; it is responsible for productivity losses, healthcare cost  and costs resulting  from damages to ecosystems. But despite the great magnitude of these costs, they are largely invisible and often are not recognized as caused by pollution. Amima J. Mohammed, the Deputy-Secretary General of the United Nations said: ‘We spend $5 trillion a year on healthcare because of air pollution.’

CORPORATE DONATIONS

According to a  recent study by the Association for Democratic Reforms (ADR), out of the total corporate donations via electoral trusts of Rs 325.27 crore made to ten political parties in 2016-17, the ruling Bhartiya Janata Party at the Centre received the lion’s share of Rs 290.22 crore. The donations to the BJP were made primarily by two of 21 electoral trusts namely: Satya/ Prudent Electoral Trust and the Janata Nirvachar Trust. Prudent Electoral Trust received the highest contribution of Rs 283.73  in  2016-17 and distributed Rs 283.72 crore to nine political parties apart from the BJP. They received biggest chunks of donations from DLF group, UPL Ltd., JSW Energy and Piramal Enterprises, Bharati Airtel, Essar and Grasim Cements among others.

CORRUPTION  PERCEPTION  INDEX 2016

Over two-thirds of the 176 countries and territories in the Corruption Perception Index 2016 fall below the midpoint of scale of 0 (highly corrupt) to 100 (very clean). The global average is a paltry 43. Tranparency Internationa said, ‘’India’s ongoing poor performance with a score of 40 reiterates  the state’s inability to effectively deal with petty corruption as well as large-scale corruption scandals. The impact of corruption on poverty,  illiteracy and police brutality show that not only the economy is growing – but also the inequality.’’ In 2015, India was ranked at 76 and since then has gown down by three ranks.

INEQUALITY  IN  INDIA

The new Oxfam report “Reward Work, Not Wealth” released on January 22, 2018 pointed out:

1)  India added 17 new billionaires last year, raising the number to 101 billionaires.

2) Indian billionaires’ wealth increased by INR 4891 billion – from INR 15,778 billion to over INR 20,676 billion.

3) 73 percnt of the wealth generated last year went to the richest one percent, while 67 crore Indians who comprise the poorest half of the population saw  one percent increase in their wealth.

4) Between 2018 and 2022, India is estimated to produce 70 new millionaires every day.

5) Number of billionaires has increased from only 9 in 2000 to 101 in 2017.

STATE OF DEMOCRACY

The annual Global Democracy Index, compiled by Economist Intelligence Unit, ranks 165 independent countries and 2 territories on the basis of five criteria: electoral process, civil liberties, functioning of the government, poitical participation and political culture. The EIU is the research and analysis division of the UK based media giant the Economist Group.The 2017 Democracy Index ranks India at 42nd place, showing a decline from 32nd  place  the  previous  year. As a result, India was classified as one of the flawed democracies in the world.

“The rise of conservative religious ideologies also affected India. The strengthening of right-wing Hindu forces in an otherwise secular country led to a rise of vigilantism and violence against minorities, particularly Muslims, as well as other dissenting voices,” the EIU observed. “India has also become a more dangerous place for journalists, especially the central state of Chhattisgarh and the northern state of Jammu and Kashmir. The authorities there have restricted freedom of the press, closed down several newspapers and heavily controlled mobile internet services. Several journalists were murdered in India in 2017, as in the previous year,” it noted.

SUPREME COURT MOVED

That the electoral bonds are unconstitutional and are a threat to democracy and liberty of the country, has been fully discussed in the PIL filed in the Supreme Court by two prominent NGO’s namely Association for Democratic Reforms and Common Cause .  The CPM has also moved the Supreme Court on the same issue. The government could have waited for  the apex court’s verdict. They could have convinced the court about the urgency of the matter and got the matter decided on priority basis.  Perhaps,  the money for elections was the over-riding concern than the heath of the polity !!!!!

The government should, therefore, withdraw electoral bonds immediatey in larger public interest.

 

 

 

 

 
 
 
 
 
 
 
 
 
 

 
 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



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