What do electoral bonds disclose about violators of India’s environmental norms?

On the morning of February 15, 2024, the Supreme Court declared the controversial Electoral Bond Scheme as “unconstitutional”, in its historic verdict. 

The scheme which was introduced by the Bharatiya Janata Party-led Union Government in 2017, now stands invalid and the news have been buzzing ever since. 

And finally on March 14, 2024, the Election Commission of India dropped the bomb, after the apex court came down heavily on the State Bank of India to make the data public, which was kept anonymous otherwise, according to the structure of the scheme. The Election Commission of India released the exhaustive list of donor companies and political parties, submitted by the SBI.

Down To Earth, sheds the light on the seasonal violators of environmental norms and tribal rights who have also funded some political parties. To read in-depth about the violators, click here: Electoral bonds: At least 4 companies that gave over Rs 100 cr have history of violating green norms, tribal rights

But first, let us understand what these electoral bonds are. Electoral bonds are interest-free bearer bonds or money instruments (like Promissory Notes) that can be purchased by companies and individuals in India from authorised branches of the State Bank of India (SBI). These bonds are instruments that are used to donate funds to the political parties of their choice.

While introducing, the union government advocated that this scheme structure will help curtail inflow of unregulated cash being donated to the political parties by donating funds through the legitimate banking channels.

However, in reality, this did not change the fate of funding the political parties. This is because earlier the Section 13A of the Income Tax Act said that the political parties must maintain a record of contributions made above rupees 20,000.

But after the amendment of the Finance Act of 2017, these Electoral Bonds do not carry the name of the buyer or payee, allowing any individual/group/companies to transfer funds to any political parties of their choice, in the name of donations. This keeps the donor and the receiver in complete anonymity, while the voters are kept in the dark and deprived of their Right to Information.

Such unconstitutional practices also lead to backdoor lobbying by certain vested interests, individuals, groups, companies, etc.

Here are some of the big donors in the published lists that have pushed for projects that harm the environment and health of locals:

1. Vedanta Group – Rs 400.65 crore

The Vedanta Group purchased the bonds worth Rupees 400 Crore.
A subsidiary of the Vedanta Group operates an aluminium refinery at Lanjigarh in Odisha, at the base of Niyamgiri hills, which has been known to pollute the surrounding air and water bodies and cause mysterious illnesses such as skin disease and rashes in the residents.

2. Utkal Alumina International Limited (UAIL) – Rs 145 Crore

Another is, the Utkal Alumina International Limited (UAIL) who donated Rs 145 Crore through the electoral bonds, is another mining company that met with massive protests from villagers in Odisha in 2004.

The company was also accused of polluting the Indravati River Basin which serves as the lifeline for the Indravati Tiger Reserve, because of the expansion of one of the company’s refineries.

3. Jindal Group – Rs 153 crore

The renowned Jindal Group too donated rupees 153 crore via electoral bonds, which was fined by the National Green Tribunal a whopping rupees 160 crore in 2020 for polluting Chhattisgarh’s Raigarh district. And again in 2021, the NGT ordered Jindal Steel to pay rupees 2 crore for ‘destroying’ Odisha nullah.

4. Megha Engineering & Infrastructure Ltd – Rs 966 crore

Topping the donors’ list, the Megha Engineering paid a mega amount towards the electoral bonds. This was the same engineering firm who was after the alleged environmental violations for its ambitious ‘Kaleshwaram Lift Irrigation Project’ in Telangana.

In the past judgments, the apex court has held that the information about funding to a political party is essential for a voter to express the freedom to vote in an effective manner.
Moreover, this historic judgement has also unearthed how these violators are escaping the government’s environmental impact assessment, further stressing the already poor state of India’s environment.