The Congress on Monday accused the Modi government of overruling the RBI to introduce electoral bonds to enable “black money to enter the BJP coffers” and demanded that the scheme be scrapped immediately.
Describing it as “opaque” and promoting “money laundering”, the party also demanded that the names of those who bought these bonds be made public and asked what the “quid pro quo” was.
Attacking the government over the issue, former Congress president Rahul Gandhi said, “In ‘New’ India, bribes and illegal commissions are called electoral bonds.”
Citing media reports and RTI responses, the opposition party alleged that the government asked the Reserve Bank of India (RBI) for its opinion just days before unveiling electoral bonds, but dismissed the central bank’s reservations and objections.
The electoral bonds system was implemented hurriedly and national security concerns were dismissed simply to help “black money” pour into the BJP’s coffers, Congress leader Priyanka Gandhi Vadra tweeted.
The Congress comments were in response to a media report that quoted communications between the RBI and the Ministry of Finance on electoral bonds. The communications showed that while the RBI had expressed serious concerns, the Ministry had brushed these aside and implemented the system.
“Electoral bonds were cleared by by-passing RBI and dismissing national security concerns in order to enable black money to enter the BJP coffers. It appears that while the BJP was elected on the promise of eradicating black money it was busy lining its own pockets with exactly that! What a shameful betrayal of the Indian people,” Ms. Vadra tweeted on Monday.
The RBI, in a letter dated January 30, 2017 and reviewed by The Hindu, said that the government’s proposal to enable scheduled banks to issue electoral bonds would result in multiple, non-sovereign entities being authorised to issue bearer instruments, which goes against the RBI’s sole authority to issue bearer instruments.
“Bearer instruments have the potential to become currency and if issued in sizable quantities can undermine the faith in banknotes issued by the central bank,” the RBI letter said. “Amending Section 31 of the RBI Act would seriously undermine a core principle of central banking legislation and doing so would set a bad precedent.”
The central bank further said that “there is no special need for, or advantage by” the creation of an electoral bearer bond”.
Revenue Secretary Hasmukh Adhia, in response to the RBI’s concerns, said that “it appears to me that the RBI has not understood the proposed mechanism” and found the central bank’s concerns about electoral bonds being used as currency as “totally unfounded”.
“Also, this advice has come quite late at a time when the Finance Bill is already printed,” Mr Adhia added. “We may, therefore, go ahead with our proposal.”
In a sharp response to the new revelations including the RBI's adverse comments on electoral bonds, the Congress called it a “corruption-inducing scheme” and demanded an inquiry on what prompted the Finance Ministry to devise the scheme.
“We demand that the BJP government reveal the names of the entities who have bought bonds and to what extent,” Congress MP Rajeev Gowda said at a press conference. We demand that the government explain what policy favours including sale of public assets to cronies have taken place as a result of receiving electoral bonds from them.”
Demanding an immediate scrapping of the scheme, the Congress MP claimed that 95% of bonds went to the BJP.
Mr Gowda also released the RBI letter in which the then Deputy Governor RS Gandhi had called the move a bad precedent and how the then Finance Secretary Hasmukh Adhia had dismissed the RBI's concerns.
“The BJP is thus able to extort from various corporates using the threat of unleashing ICE on them - the IT Department, the CBI and the ED,” he said.
(With PTI inputs)
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