Corporate India is in the spotlight after the publication of a donor list revealing close ties between companies and political parties. Electoral bonds, which account for more than half of all political donations, were anonymous until India's top court ruled them illegal, weeks before the start of national elections next month.
India’s Supreme Court forced the disclosures on Thursday – a month after striking down as "undemocratic" the controversial policy called the Electoral Bond Scheme, introduced by Prime Minister Narendra Modi’s government in 2017.
The election commission has now published a list detailing buyers of electoral bonds, revealing the close ties between businesses and the ruling BJP party.
Critics have argued the scheme violated citizens’ right to information and that it was designed to favour the BJP, which came to power in 2014 and hopes for a third term in parliamentary elections this spring.
Lion’s share
Published details showed the BJP received €773 million through donations up to July 2023, cornering nearly half of the bonds put up for sale by the federal government.
The opposition Congress received €199 million, or 11 percent of all bonds sold, while two regional groups, the Trinamool Congress and Dravida Munnetra Kazhagam, scooped up €220 million.
Trinamool rules West Bengal state while the other governs Tamil Nadu. Modi’s BJP has failed to breach either of these two opposition bastions.
The two parties insisted the funds were left on their doorsteps by secret donors, but a Tamil Nadu-based lottery firm which had bought electoral bonds worth €152 million admitted gifting a chunk of them to the two political parties.
Cash for votes
Politicians say slush funds could produce skewed results from the polls, which involves 960 million voters and some 2,000 political parties in the race for 545 legislative seats.
"Electoral bonds are being wrongly referred to as political donations," said Akhilesh Yadav, former chief minister of Uttar Pradesh, India’s most populous state. His centrist opposition party has received a humble €1.10 million in electoral bonds since 2018.
"This is extortion. Has such a type of rampant extortion taken place anywhere else in the world ever before?" asked Yadav.
French news agency AFP reviewed the list and found that of the €1.38 billion donated through the bond scheme, at least €86 million was donated by 17 companies after they faced – either directly or through their subsidiaries – investigations for tax evasion, fraud or other corporate malfeasance.
Indian media also identified several other irregularities with the electoral bond scheme, reporting that several companies donated amounts far in excess of their annual profit or revenue.
Others were loss-making or had been freshly incorporated, suggesting they had been used as front companies to make donations on behalf of an unidentified third party.
Black money
Indian Home Minister Amit Shah argued a ban on donations could prove unhealthy for electoral politics.
"Electoral bonds were introduced to end the domination of black money in Indian politics. Now the scheme has been scrapped and I fear the return of black money," argued Shah.
But India's Communist Party called the system a channel for money laundering.
"Instead of tackling black money or curbing it, you are actually allowing money laundering to be done... Companies have bought electoral bonds multiple times more than their annual profits," Marxist leader Sitaram Yechury said.
Prashant Bhushan, a lawyer who led the charge against the scheme in court, said he would not rest until and unless the murky nexus was broken.
"This opaque instrument promotes corruption as these bonds are given as kickbacks to parties in power ... Opposition parties have not received a single electoral bond," he said.
