NEW DELHI — The government of Prime Minister Narendra Modi summarily dismissed the objections of the Reserve Bank (RBI) and the Election commission to the electoral bonds instrument unveiled in 2017 allowing corporates to donate cash to political parties secretly, an investigation by Huffington Post found.
The revelation has stoked controversy in the country, with the main Opposition party accusing the government of “making corruption official”. The report in the Huffington Post says the finance ministry summarily and swiftly dismissed the RBI’s concerns about electoral bonds. It says that the government lied to Parliament and resorted to a cover-up to get away with questions vis-a-vis the strident opposition by the Election commission to the proposal.
“The documents obtained by HuffPost India reveal that three senior bureaucrats came up with six different convoluted explanations to protect the-then Minister of State Pon Radhakrishnan when he was caught lying about electoral bonds on the floor of the Parliament,” it said.
The investigation also found that after the 2018 Karnataka state elections, the government allowed anonymous donors to offer expired electoral bonds to (an) unidentified political party, thereby violating the anti-money laundering rules.
According to the investigation, the RBI had in January 2017 said the “electoral bonds and the amendment to the RBI Act would set a “bad precedent” by encouraging money laundering and undermining faith in Indian banknotes, and would erode a core principle of central banking legislation.”
The officials in the ministry brushed aside the concerns of the RBI without any substantive argument, showing a lack of seriousness of the government towards the concerns, the report reveals. It says that the government had already made up its mind of going ahead with its proposal and the RBI response would hardly matter.
The instrument allows any citizen or corporate to donate bonds bought from select bank branches to any eligible political party without having to reveal the identity of the donor. Earlier, the corporates had to reveal the details of their contributions in their annual statements of accounts.
The scheme has already benefited the ruling Bharatiya Janata Party (BJP). Some 95 per cent of the money donated using this scheme has gone to the BJP, according to data compiled by the Association for Democratic Reforms.