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An invitation to corruption?
The Electoral Bond Scheme inhibits the citizen’s capacity to meaningfully participate in political and public life
Early this year the government introduced an Electoral Bond Scheme purportedly with a view to cleansing the prevailing culture of political sponsorship. But the programme’s failings have been so blindingly obvious, and its consequences so utterly devastating to rectitude and transparency in government, that even O.P. Rawat, who just retired Chief Election Commissioner, thought it fit to deliver a damning indictment of the scheme. “There are many grey areas in this because when there is no ceiling on party expenditure and the EC (Election Commission) cannot monitor it, how can you be sure that what is coming in is not black money as there is a secrecy of the donor,” Mr. Rawat told The Economic Times in an interview last week. “Even foreign money can come and even a dying company can give money now… So, prima facie it appears the scheme cannot really deliver whatever it was intended to.”
In its present form, the scheme permits not only individuals and body corporates, but also “every artificial juridical person,” to purchase bonds, issued by the State Bank of India, in denominations of ₹1,000, ₹10,000, ₹lakh, ₹10 lakh and ₹1 crore, during specified periods of the year. Issued in the form of promissory notes, once a bond is purchased the buyer can donate it to any political party, which can then encash it on demand.
The government claims that since these bonds are purchased through banking channels the scheme will eliminate the infusion of black money into electoral funding. But not only is this argument palpably false, as a simple reading of the scheme’s terms shows us, the programme also virtually endorses corruption in political funding, as Milan Vaishnav has argued. Consider, for example, the fact that the scheme allows for complete anonymity of the donor. Neither the purchaser of the bond nor the political party receiving the donation is mandated to disclose the donor’s identity. Therefore, not only will, say, the shareholders of a corporation be unaware of the company’s contributions, but the voters too will have no idea of how, and through whom, a political party has been funded.
Just as damaging to the most basic democratic ideals is the elimination of a slew of other barriers that were in place to check the excesses of corporate political sponsoring. For instance, the programme removes an existing condition that had prohibited companies from donating anything more than 7.5% of their average net-profit over the previous three years. This now means that even loss-making entities can make unlimited contributions. Additionally, the requirement that a corporation ought to have been in existence for at least three years before it could make donations — a system that was meant to stop shell concerns from being created with a view purely to syphoning money into politics — has also been removed.
The dangers inherent in untrammelled funding of political parties, especially by corporations, have been apparent for many years. Even as early as in 1957, in a pair of judgments outstanding in their lucidity and prescience, the Bombay and the Calcutta High Courts warned Parliament of the perils in allowing companies to freely add to party coffers. It’s a threat, wrote Chief Justice M.C. Chagla, of the Bombay High Court, which is likely to “grow apace and which may ultimately overwhelm and even throttle democracy in the country”. The court was conscious that, given the circumscriptions of the law, it could scarcely deny, in the case before it, permission sought by Tata Iron and Steel Co. Ltd. to amend its memorandum of association, to allow the company to make contributions to different political interests. But this did not stop the court from drawing Parliament’s attention to the problem.
Even H.M. Seervai, who was representing Tata, the court noted, conceded that the least the company could do was to disclose clearly in its yearly balance sheet the list of donations made by it. But, to Chief Justice Chagla, such a condition was grossly insufficient. It was imperative, he ruled, that not only the company’s shareholders, but electors too must know how a party is being financed. For democracy, he believed, couldn’t function unless the voters had free and complete access to information about the parties for which they were going to vote.
Only months earlier, faced with a similar petition, the Calcutta High Court had made an almost identical appeal. “To the cynic it appears to be a plea of the company to have a legal sanction to bribe the Government of the day, to induce policies that will help the company in its business,” wrote Justice P.B. Mukharji. If amendments of this kind were allowed, and if joint stock companies serve as adjuncts to political parties, he added, the “man who pays the piper will then call the tune”.
In entreating Parliament to act, the judgments were recognising a bedrock principle of democracy: that public action ought to be guided by transparency and fairness. Unfortunately, however, in the years since, every effort has been made to endorse opacity in political funding. The electoral bonds scheme, which represents the latest such assault, unless immediately rescinded, may well irredeemably damage India’s democratic edifice.
As petitions filed in the Supreme Court point out, the scheme suffers from at least two foundational defects. One, that it was incorporated on the back of a series of amendments made to legislation, including the Representation of the People Act, the Income Tax Act and the Companies Act, which were introduced in the form of a money bill. And two, that the scheme flouts a number of fundamental rights.
Article 110 of the Constitution allows the Speaker to classify a proposed legislation as a money bill, only when the draft law deals with all or any of the subjects enlisted in the provision. These subjects comprise a set of seven features, including items such as the imposition of a tax, the regulation of the borrowing of money by the government, the custody of the Consolidated Fund of India, the appropriation of money out of the consolidated fund, and any matter incidental to the subjects explicitly mentioned in Article 110. Hard as we might try, though, it’s impossible to see how the provisions pertaining to the electoral bond scheme could possibly fall within any of these categories. The Finance Act, through which these amendments were introduced, therefore did not deal with only those matters contained in Article 110.
The scheme is equally destructive in its subversion of the fundamental rights to equality and freedom of expression. There’s no doubt that the Constitution does not contain an explicitly enforceable right to vote. But implicit in its guarantees of equality and free speech is a right to knowledge and information. Our courts have nearly consistently seen “freedom of voting” as distinct from the right to vote, as a facet of the right to freedom of expression and as an essential condition of political equality. In the absence of complete knowledge about the identities of those funding the various different parties, it’s difficult to conceive how a citizen can meaningfully participate in political and public life. As Ornit Shani’s wonderful book, How India Became Democratic, shows us, the institutionalising of equality through the principle of one person one vote, and through the creation of the universal adult franchise, was critical to building India’s republican structure. When the power of that vote is diluted through opacity in political funding, democracy as a whole loses its intrinsic value.
Ultimately, therefore, to borrow from English jurist Stephen Sedley’s formulation, the electoral bonds scheme suggests two possibilities: one, that the government doesn’t understand the Constitution; or, two, it does, and has expressly set out to transgress it.
End this long trauma
It is time to repeal the Habitual Offenders Act, which has only ended up re-stigmatising marginalised communities
Consider this. Fifteen crore individuals, better known as the Denotified Tribes (DNT) of India, continue to be considered ‘criminal by birth’.
The term, ‘De-notified and Nomadic Tribes’, can be traced to the Criminal Tribes Act (CTA) of 1871. The colonial government notified nearly 200 tribal communities to be hereditary criminals, cementing their societal identity as outcasts and subjecting them to constant harassment by the administration. After India gained Independence, these tribes were ‘de-notified’ from the list of Criminal Tribes, and, hence, the term.
Several reasons can be ascribed to state-sanctioned stigmatisation of the DNTs in India under British rule, including the strategy to identify their allies and at the same time, subdue and monitor activities of rebellious tribal communities in India.
The CTA allowed for close supervision and control over the mobility of the tribes which were notified by the provincial governments. The Act was amended in 1897, 1908 and 1911 to give sweeping powers to the authorities, some as draconian as allowing the state to remove any child of the age of six and above from its ‘criminal’ parents. By 1924, certain provisions were amended, and the Act was finally applicable to the whole of British India. Along with the introduction of laws such as the Forest Acts and the Salt Tax Act, the British threw a noose around the the lives of DNTs using stringent regulations.
It is only in independent India that the need was felt to shift the collective burden of criminality to the individual, which led to the CTA being repealed and the Habitual Offenders Act (HOA) being enacted in various States. Not all States enacted it, Currently, a variant of the HOA Model Bill as proposed by the Union Government then stands enforced in 10 States across the country, having been enacted in many more.
However, the HOA functioned as a mere extension of the CTA. Nomadic and semi-nomadic communities continued to face harassment at the hands of law enforcement agencies. Certainly, the mere repeal of the CTA could not change the mindset of government officials or members of society. The fact is that even in the 21st century, DNTs continue to face ostracisation by society at large. Given their centuries-old tradition of constant movement, they often do not possess any residential proof, which leaves them out of the majority of the government’s developmental schemes. Those deemed eligible for such schemes were randomly grouped under the Scheduled Castes, Scheduled Tribes or Other Backward Classes categories. As a result, most members of the DNTs continue to be out of the orbit of steps being taken to end discrimination (picture shows DNTs staging a demonstration in Madurai, Tamil Nadu).
To address these issues, the first National Commission for Denotified, Nomadic and Semi-nomadic Tribes (NCDNT) was constituted in 2003, and reconstituted two years later under the chairpersonship of Balkrishna Renke, which submitted its report in 2008. The recommendations found an echo in the Idate Commission, constituted with the similar mandate in 2015, and currently withholding public release of its report. However, denied funding by the Ministry of Social Justice and Empowerment in fulfilling its mandate of carrying out survey and field validation work, the Idate Commission Report lacks the scientific data necessary to introduce reforms to address the plight of DNTs.
The NCDNT report clearly recommends repealing the various HOAs. This has also been the constant refrain of community leaders, representatives and civil society organisations — as the Act still casts its shadow of the state on communities. The onus is thus upon us, lawmakers at the helm of democratic institutions that govern the country, to finally bring down the curtains on this age-old, state-sanctioned stigmatisation, and act upon the demands put forth by the DNTs.
A chance to make amends
However, it is important to learn from previous mistakes. A mere repeal of the law will not address their need for establishing society-wide changes to gain access to political-social-economic welfare. Thus, the repeal of the HOA has to be accompanied by a slew of legal reforms to address the multitude of issues DNT communities face. Their unique lifestyle requires positive affirmation and development policies that cater to their long-standing and overlooked needs. It should be the duty of the government to be proactive and reach out to the DNTs since the latter would understandably refrain from seeking state help. As the sun sets on the 18th Lok Sabha, let us ensure that it also marks an end to the oppression of the nomadic and semi-nomadic tribes of India.
A tale of two States
With farm distress becoming a major electoral issue in the run-up to the 2019 Lok Sabha election, Vikas Pathak visits two pockets of rural India, Mandsaur in Madhya Pradesh and Jodhpur district in Rajasthan, and finds that the political instincts of the rural voter are not necessarily rooted in agriculture
A few farmers sit huddled near a statue of Sardar Patel at Balaguda village in Mandsaur, Madhya Pradesh pouring out their woes over steaming cups of tea. The statue marks the entry point to the Patidar-dominated village.
One of them, Manoj Patidar, who has just returned from the Mandsaur wholesale market, says that the goods and services tax (GST) and rising prices of diesel have made agriculture a loss-making activity. “If the Shivraj Singh Chouhan government stays for another five years, we will have to sell our lands,” says the tall farmer, his wry smile deepening the lines on his weather-worn face.
In another place and State — in Rajasthan — separated by distance as well as priorities, Chhatar Singh Rathore of Tena village in Shergarh tehsil in Jodhpur district has a very different concern.
He runs a roadside dhaba on National Highway 114, which connects Jodhpur to Jaisalmer. His main complaint concerns what he believes to be the wilful disregard of Rajput sentiment. Rajasthan Chief Minister Vasundhara Raje, who is seeking a second consecutive term in office, he says, has humiliated Rajputs by not backing their opposition to the film Padmaavat, and also marginalising Manvendra Singh, son of former Union Minister Jaswant Singh, who is a Rajput.
With not much farming visible in the entire region, caste is the primary marker of social identity, unlike in Madhya Pradesh, where locals display a clear sense of identity as farmers. The contrast between Mandsaur and Shergarh points to the differences between two worlds. While both are rural, one is agrarian and the other is dominated by an array of non-farm activities.
On November 30, all eyes were on New Delhi where there was a massive protest by farmers who had gathered from all over the country in the thousands. Opposition leaders such as Congress president Rahul Gandhi, Delhi Chief Minister Arvind Kejriwal, and CPI(M) general secretary Sitaram Yechury spoke. This event came in the wake of another landmark protest held more than a year ago.
In the middle of last year, farmers’ organisations had taken out a rally that touched Madhya Pradesh, Maharashtra, Gujarat and Rajasthan, among other places. The participants also visited Mandsaur, where, a month earlier, five farmers had been killed in police firing. Weighed down by debts, the agitating farmers were demanding loan waivers.
As politics heats up in the run-up to the 2019 Lok Sabha election, the Opposition sees farmer anger as having the potential to dent the prospects of the ruling Bharatiya Janata Party (BJP), which has performed well in most State elections held since it came to power in 2014. The reading is not far off the mark. The BJP scraped through in its stronghold of Gujarat in the 2017 Assembly elections, as a result of urban votes. The Congress, on the other hand, did well in rural Gujarat.
However, one was able to get an idea of the situation while travelling through Madhya Pradesh and Rajasthan over the last month. In a complex picture, the rural cannot always be conflated with the agrarian.
Long list of woes
Madhya Pradesh today presents a picture of rural discontent that is cementing an amorphous farmers’ identity — a sort of occupational consciousness — that the ruling BJP will have to be wary of in the future. But the same does not hold true in Rajasthan, where the rural sector is involved in an array of occupations — from stone mining and animal husbandry to forays into the hospitality sector through highway and city restaurants. There is nothing like a farmer’s identity across the vast, parched, swathes of India’s largest State by land area.
It takes half an hour to reach Pipliya Mandi, the epicentre of last year’s farm unrest, on the road from Mandsaur to Neemuch town in Madhya Pradesh. Mukesh Patidar, a soyabean farmer in his mid-30s, has come to the mandi (wholesale market) to buy agricultural implements. “My village, Chilot Pipliya, which is about 17-18 kilometres from here, saw one farmer become a shaheed (martyr) last year,” he says. He adds that soybean farmers are a distressed lot, with a long list of grievances.
If the fertilizer DAP (Diammonium Phosphate) cost ₹800-900 per 50 kg in 2013-14, it is now priced at ₹1,440 for 45 kg, he says. Potash, which was priced at ₹450 per 50 kg one-two years ago, now costs ₹900 kg, he adds.
“We use tractors to prepare our fields for the crop. They run on diesel, which has gone up from ₹50 a litre to around ₹70 a litre,” Patidar says. “And labour charges have also gone up from ₹150-200 to ₹300 a day now. Why will they work for less? They are getting grain at ₹1-2 a kg.”
He predicts that the BJP will lose votes in villages around Pipliya Mandi this time. Dilip Patidar, a farm activist who also runs a shop selling various agricultural goods, says the GST has made things difficult for farmers. He says, “The GST on pesticide is 28% now. These were taxed at 0-4% earlier. Look at the motor that pumps water to fields. It was taxed at 6% earlier but attracts 12% GST now. The pipe to connect the motor to the fields attracted no tax earlier but attracts 12-18% GST now.”
All this has made farm inputs dearer. Of the entire area under soyabean cultivation in India, about half is in Madhya Pradesh, the soyabean State of India. The Malwa region, of which Mandsaur is a part, accounts for more than half of M.P.’s cultivation of the kharif crop. Fields are prepared by tractor in the summer months. Renting is the norm for small and medium farmers and tractors are rented out for ₹700 per hour, up from ₹500 because of diesel price hikes. The cost of soyabean seeds, Dilip Patidar says, is ₹5,400 per quintal. Labour charges for sowing as well as harvesting have gone up, he adds.
Electricity bills too have shot up. While it is possible to run a diesel engine instead of an electric motor to pump water into the fields, with diesel prices going up, it is becoming an expensive proposition now as with diesel becoming more expensive, with costs are ₹200 per hour.
The soyabean produce is transported to the mandis (wholesale markets) in Pipliya Mandi, Mandsaur and Neemuch. Here again, transportation is more expensive because of the rise in diesel prices. The present minimum support price (MSP) for soyabean is ₹3,399 per quintal, but it sells in mandis at ₹2,800-3,100 per quintal.
“In 2013-14, the mandi prices had gone up to ₹4,500-5,000 per quintal,” says Mukesh Patidar. He blames “faulty” export-import policies for the fall in prices.
Mandi prices keep fluctuating on a demand-and-supply basis, and vary each day. Says a wholesale trader at the Mandsaur Mandi who refuses to be identified, “These are like the stock market. It is partly the luck of the farmer and partly his ability to read trends that determine the price he gets for his produce.”
“Look at onions. When prices begin to rise, they import these and the prices fall again,” says Dilip Patidar.
Indeed, the interests of farmers and consumers are at odds. When the prices of farm produce rise, the commissions of wholesale traders and other intermediaries in the supply chain push up the retail prices of farm produce. When prices fall, food price inflation ceases to be a problem but farmers face losses, rendering agriculture unprofitable as an occupation.
For example, at the Ajmer vegetable wholesale market, tomatoes were selling at ₹8 a kg. On the previous two days, 1 kg was was selling at ₹10 and ₹12, respectively. Just 2 km away at the retail market, it was selling at ₹20.
The dip in farm fortunes is visibly impacting the politics of Madhya Pradesh, a traditional BJP stronghold, with the Congress clawing back in the villages. The troubles of increased documentation, paperwork and bank payments, — seen by many as a part of the formalisation of the sector and cleaning up of the system — have also annoyed farmers.
The M.P. government has put in place a subsidy scheme called Bhavantar Bhugtan Yojana (BBY), under which the government promises to plug the gap between market prices and the minimum support price (MSP). But to avail it, a farmer has to register himself at an authorised office and produce the required documents at the grain and vegetable market when he goes to sell his produce.
Says Sunil Solanki, a farmer: “Our soyabean crop gets a subsidy of ₹500 a quintal. But for this we have to submit a copy of our documents to the mandi merchant, who submits our farmer code numbers to the official market committee and then credits the money to our accounts, a process which takes between 10 and 15 days.” The government subsidy under the BBY, he adds, takes two to three months to get credited to a farmer’s bank account. Unlike farmers elsewhere, farmers in M.P. are not paid in cash as everything is digitised.
In other words, say several farmers, they pay in cash for labour, for renting tractors, and to transport the produce, but get paid by bank transfer. The time lag results in a cash crunch. They complain of long queues at markets and banks. Sensing this as an opportunity, Congress leaders have begun to promise cash payments to farmers if voted to power, according to local residents.
Economist Utsa Patnaik says that the coming together of farmers across classes — the poor and the rich — was long overdue. She says: “There has been a concerted attack on agriculture over the last few decades under the influence of neoliberal policies. There has been a mistaken belief that we should displace farmers and promote industrialisation, and the displaced will be absorbed by industry. The experience of Europe was different. Rather than being absorbed in industry there, the displaced were exported to North America, Australia and South Africa, and they captured the resources there after subduing indigenous people. We don’t have that option.”
She adds: “The open trade policies have exposed farmers to the highs and lows of global prices, which they cannot withstand. The meaning of priority sector has also changed under the influence of neoliberal policies, and farmers are unable to access low-interest loans. They have to borrow from private lenders at high interest rates and end up in a debt trap. It is only now that people have begun to notice the farm unrest that was waiting to burst forth.”
Other sources of income
Few farmers can be seen at the Ajmer wholesale vegetable market after 11 a.m. They come here at 3 a.m. and leave after selling their produce — in return for cash payments — by 9-10 a.m. The mandi lacks the scale of operations or the frenzied activity of, say, the Surat wholesale market or even Azadpur Mandi in Delhi.
The reason is not hard to find. This correspondent’s journey through Rajasthan, across 2,100 km, covering Jaipur, Tonk, Ajmer, Sawai Madhopur, Nagaur, Pali and Jodhpur districts, showed farm activity present only in the villages close to Tonk.
Rasoolpuri village, which has high Gujjar and Meena populations, has farmland where mustard is grown. Here, farmers complain about rising diesel and fertilizer prices and the limited supply of water, which is available only from 10 p.m. to 4 a.m. The produce, they say, sells at ₹3,200 a quintal, much below the MSP of ₹4,200.
Farmers at a tea stall just outside the village say they will vote for the Congress as they are fed up of having their concerns brushed aside.
But most of rural Rajasthan is a very different world. Villages, even around Jaipur, for miles on end have hardly any farm activity. The better off among villagers have diversified into non-farm activities such as dairy and poultry, while the poor are into animal grazing or work as labourers in construction activities and other sectors.
A 40-minute drive on the Jodhpur-Jaisalmer highway leads to the Balesar-Shergarh belt, an arid, sparsely populated area dotted with Rajput-dominated villages. A detour from the highway down a narrow, broken road reveals what substitutes for farming in this region: stone-mining for the construction sector is in full swing on both sides of the road.
Meghlasia is a village with Meghwal (Scheduled Caste) and Rajpurohit families. The latter, who describe themselves as ‘gurus of Rajputs’, are Brahmins by caste.
Stone-mining is a key source of income for the villagers. In addition, they also sow bajra (millet) after the first rains in June-July, but the yield is subject to the vagaries of the monsoon rains.
Caste is the marker
Like many other Rajputs who have opened restaurants or dhabas because there is not enough water for farming, Chhatar Singh Rathore of the Rajput-dominated Tena village too runs one on the road towards Jodhpur.
Says Rathore, “Many people in my village run restaurants on the highway. The richer Rajputs also own restaurants in Jodhpur. There are 10 restaurants in the city run by people from my village.”
He tries to summarise his village’s sources of income: “Our previous generation saw many people join the Indian Army. You will find many ex-servicemen here. This generation has taken to the restaurant-catering sector in a major way. That apart, many from the village have migrated to Surat to join the cloth industry where they specialise in designing and packing. Some even race horses in Dubai.”
The Rajput community in the State has gravitated towards the hospitality sector, with heritage hotels and havelis dotting the State. Many are owned by richer Rajput families. They have a traditional feel and visible ‘Rajput markers’ such as photographs of men in traditional attire holding a sword or rifle. A lot of them try to attract foreign tourists.
This non-farm rural world is in sharp contrast to that of M.P., where an occupational identity centred on farming is being forged. In Shergarh tehsil of Jodhpur, caste remains the prominent identity marker, with cultural issues occupying centrestage.
Rathore is unhappy with the Rajasthan government for not standing behind Rajputs on the film Padmaavat. He complains that Vasundhara Raje got the entrance to the Raj Mahal Palace in Jaipur sealed to target former royal Diya Kumari, and also humiliated the family of BJP veteran Jaswant Singh.
In Tibna village, about 90 km from Jodhpur, water supply poses an acute problem. Sarpanch Bhawani Singh Rathore points to a dry hand pump which is wrapped in a sack cloth. The village has houses placed wide apart, and is populated longitudinally, one house after another for a few kilometres. It has just 300 families, says the sarpanch, of which 150 are Rajput. Other than water, villagers also complain about the lack of school teachers in the local government school. However, despite their various frustrations, they do not think of themselves as aggrieved farmers. Caste remains the key marker of identity and status.
“You find three types of scenarios,” says political analyst and author Sajjan Kumar. “The first is Madhya Pradesh, where agriculture is linked to the market, with cash crops such as soyabean and cotton. Here, farming is under stress because of a fall in market prices and the impact of demonetisation. The second is seen in agrarian States such as Bihar and Uttar Pradesh (excluding western U.P.). Their agriculture is not linked to the market, with mainly food crops such as rice and wheat being produced. An arid State such as Rajasthan presents a third scenario, where agriculture is not central to rural life.”
He explains the significance of these diverse realities: “An occupational identity, where people identify as farmers, is emerging in States of the first kind, such as M.P., Maharashtra and Gujarat. In States such as U.P. and Bihar, while agriculture is central to rural life, caste and religion remain dominant identity markers in the absence of strong market linkages of agriculture. In Rajasthan, in the near absence of agriculture as a key rural vocation, identity markers are still tied to caste.”
Rathore’s sentiments lend credence to this hypothesis. “I have no problem with [Prime Minister] Narendra Modi. He says we should sell pakodas if we can and I have been doing so at my restaurant,” he says. “My problem is with Vasundhara Raje. Rajputs will try to ensure a victory for Manvendra Singh at Jhalrapatan. What is a Rajput without self-respect?”