SY Quraishi Interview: 'Electoral Bonds List May Show Skeletons in the Closets'

On 'Badi Badi Baatein', ex Election Commissioner SY Quraishi talks repercussions of SC verdict on electoral bonds.

8 min read

"In the course of the arguments, the Solicitor General had said that the people don't have a right to know who has donated. The people don't have a right to know? I found it very offensive. This is unacceptable in the largest democracy. This is a thinking of a banana republic," said former Election Commissioner SY Quraishi on the Supreme Court striking down the government's electoral bonds scheme.

The verdict by the apex court is being seen as a landmark judgment for democracy and transparency in political funding. Though many, including Quraishi, say it came a little too late.

Quraishi, who had been speaking up against the opacity of electoral bonds for years, not only questioned the delay, but also the alleged reversal of the stance of the Election Commission (EC) and the Reserve Bank of India (RBI) in the apex court through the course of the arguments.

"It is a bold judgment. People's faith has wavered in the EC too. But when fingers are pointed towards the EC, it hurts me more as I, too, have added some bricks to its building," Quraishi said.

On 'Badi Badi Baatein', Quraishi explains how the government amended laws to legalise electoral bonds, how the Centre tried to defend the opacity in the course of the arguments, and the repercussions of the delay in the verdict.


Hello Mr Quraishi, welcome to The Quint and Quint Hindi and welcome to 'Badi Badi Baatein'. In a big development, the SC ruled the electoral bonds as unconstitutional. You have been speaking out against them for a while. What was your first reaction when the verdict came out?

I was happy with the judgment. It was a landmark verdict, a historic judgment for democracy. Transparency, which is of utmost importance in a democracy was under attack. When the scheme was introduced, it was via the Budget presentation, which was unusual in itself. It was made a part of the Finance Bill so that there could be no debate over it. Arun Jaitley, Finance Minister of the time started the speech by saying something good that free and fair elections cannot take place without transparency of political funding. We were happy to hear it since we had been saying for a while. He also said that we have not been able to achieve transparency in political funding since 70 years. We liked that too. After these two sentences, we expected him to bring more transparency to law but what he brought was exactly opposite to that.

All the transparency that was already there was finished. What was the transparency of that time? That every donation over Rs 20,000 has to be disclosed to the Election Commission. The EC would then issue them a certificate following which they would be exempted from Income Tax. There was a time when even Rs 20,000 would get disclosed. With electoral bonds, nobody knows whether they are getting Rs 2 crore or Rs 20 crore or Rs 200 crore.

The reasons given for that were also weird - that donors want secrecy. They may want secrecy but why? Because there are no free lunches. He would get favours in exchange for it. If he is giving Rs 10-20 crore, he would take something from the government, right? A scheme, a contract, a license, or maybe a bank loan. You know how many have duped banks before. But this cannot be disclosed to you or me. This was the logic behind secrecy.

Before this scheme, there were donations taking place for 70 years, elections were being conducted, and governments were still getting formed and falling too. There were no problems at the time. The donors were also smart. They would donate to all parties. At times they would donate to warring candidates and get favours from either sides. 


Briefly, what were the key arguments of the government that the SC refused to accept?

Basically the argument that the donors want secrecy because they are scared of the repercussions; that if they donate to a party A, party B will sabotage them. In the course of the arguments, the Solicitor General had said that the people don't have a right to know who has donated. The people don't have a right to know? I found it very offensive. This is unacceptable in the largest democracy. This is a thinking of a banana republic that transfer of funds to political parties will be kept secret from the people, how crony capitalism is taking place, who is actually running the government, whether there is foreign money coming or not. The people shouldn't know that? This was the SG's argument.

Moreover, the Attorney General argued that Right to Information, which was upheld by the SC, has 'reasonable restrictions'. Yes, the Constitution says that but that is for national security matters, not for hiding quid pro quo. How is it reasonable that the people don't know who's funding the political parties? A term like 'reasonable restrictions' was being used so loosely by such senior lawyers.

The SC said that the electoral bonds were unconstitutional. Does that mean the parties that were funding for six years through those bonds, an amount which nears Rs 16,000 crore across all parties, does that morally make all that usage by the parties unconstitutional?

I don't think we need to go to that extent. The donations would take place in the past too. Only the secrecy has been uplifted, not the liberty to donate. They didn't say donation itself is illegal, but hiding it is. The court said that whatever processes (related to bonds) are now pending with the SBI should be stopped and a list whatever donations have taken place so far (via bonds) must be given to the EC by 6 March and it must be uploaded on the EC website by 13 March.

The troubles will then start when people start analysing who donated how much to whom. If there were any firms that were under investigation, so they donated to any party to try to cover up. If there was quid pro quo, what changed after their donations - there is a risk of all those things getting revealed. Hence, there is chaos.


Like you aid, it is risky for all political parties for it to be revealed who gave how much to whom. Do you think the government will try to block this? Can it try to challenge it in court or try any other way for it to become public?

See, nobody is objecting to any corporate donating to any party. You give Rs 100 crore or Rs 1,000 crore but make sure it's public knowledge. Only when things are hidden and you have exchanged favours, that is when the transactions become suspicious. Secondly, whoever has paid for the last six years under the condition of secrecy and can cite embarrassment, the court may be approached on that point.

They may succeed in tweaking that bit of the order and decide that what was done in the past is done but for the future, it must be transparent. But the parties that will move court, what impression will we get? That they have something to hide. It will be like a speck in a thief's beard.

If the electoral bonds were unconstitutional to an extent that the SC had to strike them down, how did they come into being in the first place? What amendments were made? What kind of acts were legalised to implement them?

There were lots of tweaks made for it. Firstly, introducing it in the Budget speech. They knew that the Bill just gets presented in the Lok Sabha and no discussion happens in the Rajya Sabha. Many other acts were amended for it. Section 182-183 of the Companies Act states that the shareholders need to know where the particular company is spending, who is being donated to and why. That was amended and the rights of the shareholders were taken away.

Another important bit of the Companies Act was that if there is profit of more than 7% over past three years, you cannot donate more than that. They not only didn't increase that cap to 10% or 25%, they completely waived it.  It means even 100% profits could have been given to political parties. And if you are in loss, you still could. There might have been so many shell companies and bogus companies who only funded governments.

Then there was FCRA under which foreign donations were completely banned. That was waived too. So, foreign money can come and we don't even know which country is running our elections. This is not an imaginary fear.


Do you think the EC did enough to challenge electoral bonds?

Yes, the EC had written a strongly worded letter to the law ministry saying that the electoral bonds will kill transparency, lead to more money-laundering, and will have dangerous implications. But surprisingly, the EC reversed its stance in the same court three years down the line. It said that it did not object to them. Why did the stance change? The RBI had also strongly opposed the bonds at first. They also reversed their stance. We don't need to discuss what factors act behind such reversal of stance.

Many believe that the SC verdict is a little too late. Why do you think there was a delay?

The issue was so urgent that it should have been taken up by the SC as soon as it was listed after taking cognizance. Didn't they find it necessary to pick up an issue of such national importance? There are so many problems that have now risen only because of the delay. Donations having received for 3-4 more years, them having to be listed now, all these issues would not have risen if the verdict came five years ago.


You think the electoral bonds were secretive or secure? The Quint's investigation did find alphanumeric codes on them that cannot be seen with naked eyes. 

Exactly! One of the biggest problems with electoral bonds was that we did not know about the transactions but the SBI did. And if the SBI knew, the government knew too. 

What according to you is an ideal process for election funding?

There should be a national election fund and all donors should donate to that fund. The tax on the donations should be waived which will encourage donations. There are many companies that desire a better democracy. If you give to a party, you feel the risk of upsetting the other. But if you give to the national election fund, it will avoid upsetting anybody. Then, the formula to distribute those funds should be designed carefully. I have suggested that no party should be given funds in the name of fight elections but to run the political party. It should be based on how many votes the party will get. If we give Rs 100 for every vote that a party gets and stop private funding, the question arises if Rs 100 per vote is enough. There were 67 crore votes polled in the previous elections. If you calculate Rs 100 per vote, that's Rs 6,700 crore. You distribute that money on the basis of vote share of every party.

You've said in the past that faith is wavering in the SC but the same is also now said for EC. Do you think this verdict might help the EC change that perspective?

Well, I don't know but I hope so. You rightly said that my faith in the SC has wavered. For seven years, if this matter was not of national importance to hear then what was? The SC could give bail to a journalist at 12:30 am. But this was a matter of national importance. I have always said that corruption in elections is the mother of all corruption in the country. I have always written about the SC as the guardian angel of democracy and of the EC. In that context, it restores my faith after this judgment. It is a bold judgment. People's faith has wavered in the EC too. But when fingers are pointed towards the EC, it hurts me more as I, too, have added some bricks to its building. 

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

Read Latest News and Breaking News at The Quint, browse for more from news and politics

Speaking truth to power requires allies like you.
Become a Member
3 months
12 months
12 months
Check Member Benefits
Read More