BEHIND THE BOND

 

The data about the #ElectoralBonds released by the EC has prima facie shown that it was another grand scam like the #Demonitisation (Demo for short).

The similarities are quite striking.

In the case of Demo, the #RBI was used as a shield.  In the case of the Political Electoral Bond (PEB for short), it was the #SBI.

In Demo, the Government said that the intention was to wipe out black money and fake currency (issued primarily by Pakistan).

But, what was hidden under the carpet from the eyes of the gullible common man is that black money is not related to the currency held in one’s hand.  It is related to whether it is accounted for (not merely accounted) and has been subjected to tax that it ought to have been.  It changes from its nature of being black or white depending upon with whom it is at the time of the transaction, when it was required to be accounted for and subjected to tax.  With the next transaction, it changes the colour depending upon whether the recipient was required to account for it and had to pay any tax and whether it was done so or not.   For example, if a person who has earned money that should have been subjected to Income Tax, but he either did not account for the said transaction in his IT returns and spent the money for purchase of groceries on a large scale and gave it away to some organization which fed the poor, the money has changed hands, is not taxable at the hands of the grocery merchant, if he is below the IT limits and is not going to be taxed at the recipient end, which is the organization feeding the poor (exempted as a charitable organisation).  Yet, the liability of the person who did not account for the income remains.  To get hold of that tax, no end of chasing of the currency would matter. Because, from the grocer, it could have changed hands to a whole-sale merchant, who might have accounted for it or not and from there to some other supplier or to a manufacturer or down the lane to some other persons.  And if the money has reached the hands of an agriculturist it becomes non-taxable and thus is white at that point.

The second example is that of a person who earns money which is taxable, but shows it in his book of accounts under a category of non-taxable receipt.  This money also changes many hands.  Classic case is incomes shown as generated out of agricultural activities, even if no such activity had been undertaken.  There is no use in chasing that currency because it does not stay with the person who has stained it.

Thus, black money could be essentially and properly checked only by means of checking the accounts and investigating those who have filed false returns or evaded tax.  Not by going after the currency in the hands of all and sundry.  Thus this stated objective itself was false.

Regarding the next stated objective regarding checking fake currency, it is indeed directly related to the currency.

But during the Demo exercise, when exchange of notes was made mandatory, there was no mechanism to check whether the currencies obtained across the counter were fake or not.  Since there was no mechanism of noting down the number of the currency and from whom it has been obtained, even if it is stated that the Banks subsequently undertook a verification of the genuineness of the currency, there was no way they could have tracked down the person who exchanged it.  They had also by that time issued genuine currency in that place. 

Then of course, as revealed in the Sekhar Reddy episode where crores worth of currency in Rs. 2000 denomination had been seized during a raid, within days of demo, even as people were standing in queues to get two such notes, all transactions did not necessarily take place across the counters and some persons were lucky enough to get them exchanged in lump sum.  It is another thing that subsequently the case was said to have been closed on finding that all that was ‘accounted’.  This again proves the disconnect between the colour of the currency and the colour of the accounts.

All the more important is that there is no statistics revealed by the RBI regarding what number of such fake currency had been thus got exchanged for new genuine ones.

The other issues that they stated regarding fake currency were (a) that it was enabled due to imported paper used for printing the currency in India and (b) due to high denomination currency in circulation.

These stated objectives were also proved to be a mere eye wash when subsequently paper for printing currency was imported again and a still higher denomination (Rs 2000) currency was issued in the place of Rs. 500 and Rs. 1000 thus making it more luring and profitable to issue fake currency (in a higher denomination).

The final tally of the currency which had come into the RBI also disproved the Government claim that it expected that there will be a deficit of 15% of the money in circulation when it comes back and thus it will be the net saving.  The total number of currency which came in was almost 100% (99.3% as per RBI) to that which was issued.  The counting in the last phases became very slow beating even Ravi Shastri’s innings at the finals of the Benson and Hedges in 1985. 

In the case of Political Electoral Bonds it was stated that the intention was to stop illegal political funding.  The second limb was the assurance that the identity of the donors will be maintained to ensure that there will not be victimization. 

Here again, the legality or illegality of political funding does not depend merely upon whether the fund has come through banking channels. First criterion is regarding whether it is accounted on both the sides, whether it has suffered the eligible tax deductions and then whether there is any quid-pro-quo for the said donations.

What the details of the PEB revealed by the SBI have shown is that there is every indication that the funding has been for some quid-pro-quo.  Either it is in the way of contracts, obtained or to be obtained; or to wriggle out of some case already booked or to be booked by any of the agencies like CBI, IB, ED, etc.  These could obviously be operated only by the parties in power, whether at the Center or at the States and thus, the entire funding itself is obviously illegal, irrespective of whether it came through the bank or not. That the donors have donated beyond their capabilities as per their own books of account again evidence that merely because it came through banks, it is not white money.

As in the case of Demo, here again it is proved that black and white do not depend merely on being accounted or coming in through banking channels.  People who still do not understand this difference shall continue to be duped again and again by the advertised concept of transparency through banking transactions.

Secondly, when the scheme said that the donations will be anonymous – at least to those not involved in it- it was quite contrary to the requirement for any banking system to reconcile receipts and payments; to verify whether the bonds that were being realized were the ones actually issued by the institution itself; that no cash purchase was possible and only through bank accounts; that Banks had to take the KYC of the donors; that realization could be done only by way of deposit in another bank account and when such data is available with the institution, no anonymity is possible, particularly from the eyes of the Government and when the scheme itself stated that the data should be provided if demanded by a competent Court, the said declaration of providing cover or protection to the donor itself was misleading. If at all there was any intention of keeping it anonymous, it was only from the knowledge of the public, who are the citizens, called upon to vote, in the name of promises, from time to time.

In the above scenario, when the Bonds were having an alphanumeric identity, the SBI taking a stand after 16 or 17 days of the Supreme Court order requiring them to reveal the details of the bonds, that they found it difficult to match the donors and recipients (something the Court had never required them to do in the first instance) is obviously a lie.  Once the data was out, people have been able to match it within a few hours. Because all of us know that the SBI and Mr. Harish Salve were saying the lie with impunity only because they, like anyone else knew that they had the backing of the Government, no action could be expected against them for making such a statement.  Nor will they be hauled up for not understanding simple English which required them to reveal all details, and instead they chose to misunderstand it in a very complicated way, ‘in the light of some paras of some earlier judgment’.  If any ordinary mortal had attempted such tricks before even the lowest court in the land, he would have landed up in jail.  But mighty Government is mighty due to their having gained absolute majority. 

When the alphanumeric details of the bonds were released, it only confirmed the quid-pro-quo nature of all these donations.  The time line, the amount involved and the parties involved have made it obvious regarding the purpose for which these donations took place.  They were definitely ‘not in the national interest’. If they had anything to do with elections, then it was only for further illegal dealings using the said money.

This episode not only revealed yet another hollowness of the claims of the BJP Government, but also shows how brazenly people are being taken for a ride in the name of tall promises of cleaning up the economy or the system.

As a last ditch attempt, the SBI and FICCI, ASSOCHAM, etc were made to attempt to thwart revealing the alphanumeric details of the PEB.  Mr. Harish Salve appearing for the SBI openly sought a declaration from the SC that no PILs should be entertained on the basis of the information.  Mr. Mukul Rohatgi representing the Associations of the Industries and Commerce/Corporates (donors) said that they feared that there will be a witch-hunt once the data is revealed.

The episode once again shows how the BJP let down those who believed in them – that they will deliver on the stated objective.

It could also be a pointer that the trade or captains of Industry fear that BJP may not come back next time and hence they may be in trouble since the contributions to BJP is the highest.  Otherwise, why should they talk about witch-hunt?

From this revelation, what is clear is that the very persons who came to power in 2014 in the name of cleaning up politics and the economy have only further muddied them and in the process the investigating agencies have blatantly and brazenly been misused to suit the needs of the party in power.

The other thing is that there is no difference between any of the political parties.  Either they get money through deals for contracts, or through some policy that might help only someone who give them money, or by threats of raids, arrests, etc.  The one who came up promising to be a messiah against all these ills has proved to be only a master of these techniques.

When it becomes blatant that investigations could be launched against any one and pre-trial arrest itself will be seen and propagated as evidence of guilt and the persons could be bound down, even Judges cannot remain fearless in such an atmosphere.  Then, to expect that in the face of such misuse, Judiciary can come to the rescue is also difficult to believe, always. 

One Dhanjaya cannot don all roles and all times.  He is not after all Krishna Paramatma.

In such a scenario, democracy becomes a farce, because there is no level playing field.  Russia also conducts elections.  But we do not consider them democratic any more. 

So more than the monetary element, what is at the back of the Bond is the revelation that we are in deep trouble as a democracy and as a state.