Capitalism, corporates, cronies and common people in India’s ‘new democracy’ on sale: The case of the electoral bond scheme

Indian rupees

Abstract: Relative to pre-capitalist societies, capitalist society is compatible with some democratic rights. But capitalism also curtails democracy when democracy — including common people demanding a better life and accountability from the state — goes against the business of money-making beyond a limit tolerated by that class. In India’s complex and increasingly autocratic political landscape, Hindu supremacism — led by the BJP (Bharatiya Janata Party) as its vanguard — is in a mutually beneficial alliance with corporates that is weakening democracy. India’s electoral bond scheme, considered to be one of the biggest scams in the world, exemplifies the operation of corporate and communal forces against democracy through two main mechanisms: raid (extortion from corporates) and red-carpet (voluntary kickbacks from corporates). The secretive financing of political parties, and especially the ruling BJP, is one of the ways through which the attacks on democracy from the corporate-communalists alliance operates. Corporate financing of political parties, including via the anonymous electoral bonds scheme that operated in India between 2018-24, is not an isolated process. Rather, it is part of a wider structure of processes/institutions that constitute the anti-people bourgeois democratic system — or India’s ‘new democracy’. At the same time, it also opens the door for progressive mobilization of common people against that system.[1]

In the contemporary world, democracy generally includes: citizens’ civil and political rights, including their freedom of speech and the right to know how state institutions operate; the principle of “one person one vote”; checks and balances within the state that stop excessive concentration of power in one institution, state-actor or powerful politician; independence of the judiciary; restriction on state coercion against common people; and reasonably equal distribution of economic and social-political resources, including a level playing field among all political parties through which people express their opinions and interests.

Relative to pre-capitalist societies, the capitalist system is compatible with some democratic rights. But it curtails/mutilates democracy when democracy — including common people demanding a better life and accountability from the state — goes against the business of money-making beyond a limit tolerated by that class. Capitalism becomes anti-democratic especially when it experiences a constant crisis of profitability and where there is a huge amount of economic inequality, with a vast majority not being able to meet their basic needs while a super-rich capital-owning segment (the top 1% or so) wallows in obscene wealth. In India’s political landscape, which is increasingly autocratic in spite of regular elections and high voter turnouts, there is something else that further weakens democracy: “communalism” (Hindu supremacism), which is in an alliance with a large section of India’s corporate world. India’s electoral bond scheme (EBS) as a method of financing political parties, exemplifies how the relation between democracy and inequality works.

An electoral bond is a financial instrument for making anonymous donations without limits to political parties. According to the EBS introduced by the Indian government in 2018, an electoral bond is a bond issued in the nature of a promissory note. It effectively works like cash. As a bearer instrument, an electoral bond does not carry the name of the buyer or payee. No ownership information is recorded; the holder of the instrument (i.e. political party) is presumed to be its owner. There is no obligation of political parties to maintain a record of the identity of donors. The scheme allows individuals (who are citizens of India) and Indian companies, as well as the subsidiaries of foreign companies, to donate electoral bonds to political parties of their choice, which have to redeem them within 15 days. A person being an individual can buy bonds, either on their own or jointly with other individuals. The bonds are issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh (= 100,000), Rs 10 lakh, and Rs 1 crore (=10 million).

Corporates, the main donors, have paid millions to the ruling parties at the central and state level. The BJP, whose government introduced the scheme, has been the main beneficiary.[2] The three Left parties upholding the principle of political transparency as an important aspect of democracy have refused to participate in the scheme. One of the parties, the Communist Party of India (Marxist), was in fact a petitioner in the top court against the scheme. In February, 2024, the scheme was struck down by the Supreme Court as unconstitutional. However, the money received through the scheme has already funded one national election and many provincial ones during the 6 years of its existence. Not just that. It has allowed the BJP to strengthen itself and its supporting organizations: there is no guarantee that none of the money received has been used for non-electoral purposes (e.g. building offices).

The secretive financing of political parties, and especially, the ruling party, the BJP — the vanguard of communal forces — through the EBS is one of the ways in which the alliance between corporates and communalism attacks democracy. The EBS has, in turn, operated through two mechanisms: raid (extortion from corporates who get protection from punitive action against their illegal action, real and/or imagined) and red-carpet (voluntary kickbacks from corporates in return for favourable action).

The EBS, considered to be one of the biggest scams in the world,[3] or, more generally, corporate financing of political parties, is not a process in isolation, however. Rather, corporate financing of parties, including through the EBS is part of a wider structure of institutions that constitute the anti-people bourgeois democratic system at present in India (and in many other “market societies” such as the US) (see Figure 6). At the same time, it also opens the door for progressive mobilization of common people against the mutilation of their democratic aspirations.

The EBS sheds light on some aspects of India’s politics and political economy under an authoritarian pro-corporate regime. The fact that the scheme was put in place and allowed to operate for six years says a lot about Indian democracy and its “basis” in the functioning of the corporate world. There are many aspects of the EBS. This article deals with one: what is the connection between the EBS, on the one hand, and corporates and the common people, on the other? Answering this question will shed some light on the extent to which corporate funding of elections, including through the EBS, has restricted, cramped, curtailed and mutilated democracy.

Pro-corporate character of EBS and economic inequality

The level of economic inequality in India is proverbial. It has been growing in recent years, resulting in an entrenched billionaire raj (rule). Over 40% of the wealth created in India between 2012-21 — a time period that, more or less, coincides with the BJP regime — has gone to just 1% of the nation, while a meagre 3% has trickled down to the bottom half.[4] The share of the top 1% in the nation’s income has been rising since the late 1980s (when state control over the business-world began to be relaxed), and that of the bottom 50% has been falling. In 2022, India’s top 1% had control over more than 22% of the nation’s income, while the bottom 50% had control over barely 15% (Bharti et al (2024).[5] The billionaire raj cannot but have an influence on democracy, where ruling parties introduce one pro-corporate policy after another.

The EBS is blatantly a pro-corporate scheme. Most of the donations are in the larger denominations (see Figure 1 below), so they are likely to have been made by corporates in a nation where more than 86% of people live on less than US$ 5.50 a day. Mr. Raju Ramchandran appearing for the petitioner CPI (M) said that the EBS is made to favour anonymous corporate funding in elections.[6] Indeed, 92.30% or Rs 6812 crore of the total value of bonds purchased were in the denomination of Rs 10 million, indicating these bonds were purchased by corporates rather than ordinary individuals (Association for Democratic Reforms, 2021, Op. cit.). As Justice Khanna said, not only were the overwhelming bulk of electoral bond contributions from bonds with Rs 1 crore denominations, but also the overwhelming majority of recipients of the bonds were parties that were leading at the central or state level (Basu, 2024).[7] A large number of small unknown companies have donated 10 to 100 times their net profit via electoral bonds. It is quite likely that they are acting as fronts for big corporates in a process that involves money-laundering; that is, making illegal money appear legal, which is illegal, according to the 2002 Prevention of Money Laundering Act.

Figure 1: Electoral bonds in the form of large-denomination corporate donations (March 2018 to July 2021).

Source: Association for Democratic Reforms (2021)[8]

Why do corporates fund political parties? The capitalist world dominates the economic life of nations, and therefore also dominates the nation’s political life. The state-capital relation exists at different levels (Das, 2022).[9] The state, as such, has to meet the general needs of the capitalist class as a whole, and especially, of dominant sections (for example defense of property rights, general conditions for profit-making, etc.). But the capitalist class as a whole operates through competing capitals (i.e. competing capitalists). Corporates provide political funding mainly to get assistance from the party(parties)-in-power to remain competitive and enhance their competitive standing. The political system, including what is called democracy, continues to favour the corporates; in turn, ruling party leaders and their followers amass money through the EBS and other mechanisms of corporate financing of parties, as they help the corporates amass wealth by using state power (Banerjee, Op. cit.). At a given point in time, exactly which fraction of the capitalist class gets special favour can depend on, within limits, political-ideological aspects of the party/parties in power, including even personal ties.

The EBS has proven to be good business for super-rich business people. There are two main mechanisms through which this happens: red-carpet and raid. A senior Supreme Court advocate, Bhusan said more than half the money redeemed through electoral bonds was “taken as bribe, by giving contracts and by showing fear” of the investigative agencies (Bhusan, 2014).[10]

Voluntary kickbacks by companies cause the ruling party to roll out a red carpet for them. Many companies wish to beat their competitors to acquire contracts from the government (to build infrastructure, to produce vaccines, etc.) or they simply want a favourable policy or intervention (for example the sale of state properties). So, they pay up to receive the benefits and governments provide these in return for political donations. “A bulk of funds provided through the electoral bonds to the BJP [was in the form of] kickbacks and commissions. They are also given to earn goodwill for future favours”, so corporates cannot be seen as just “innocent victims of extortion”.[11]

Following social, economic and environmental regulations that force companies to not excessively abuse common people and the environment costs money and can affect a company’s competitive standing, nationally and/or globally. So, they flout the laws. This creates a fear of potential or actual government action. They provide protection money in the form of political financing to avoid being penalized.

Indeed, “Raids are conducted by the central agencies which [have] led to coughing out of ‘bond purchases’ leading to the subsequent silence of these agencies. For them, the purchase and donation of bonds was an avenue for escaping hostile action of these agencies” (Basu, 2024).[12] “Malpractices by corporates, real or imagined, are utilized to raid, investigate and attach funds and properties. Owners of such companies are then found to buy electoral bonds and make generous contributions to the ruling party at the centre. There are two aspects to such extraction of funds — one is the crime of extortion through illegal threats and blackmail, in which governmental agencies are complicit; the other is those who have actually broken the law and committed serious malpractices are allowed to get away with bribes being paid” (People’s Democracy, 2024).[13] Thus the political regime — which is a part of the state — provides protection to illegal commercial operations in the form of a protection racket “which is often a part of a wholly criminal enterprise — where illegalities committed by businesses such as mining or real estate development, like expropriating people’s land, or laundering illegally obtained profits, are protected by the regime from legitimate law enforcement action” (Thakurta and Dasgupta, 2024).[14]

There are specific examples of the nexus between corporates and the ruling party at the centre. One would be the reduction of corporate taxes since 2017 (see Figure 2 below) and the simultaneous, gradual increase of taxes on fuel, etc. This has resulted in shifting the tax burden from corporates onto the people. Companies are paying the ruling party a small part of what they would pay as taxes to avoid paying their fair share of the taxes.

Figure 2: Corporate tax breaks by the Indian government

Source: Sivagnanaselvam, 2021.[15]

Assuming a similar growth of corporate tax revenue as previous years (~15%), the central government, by slashing corporate taxes, has potentially lost Rs 6.27 lakh crore (or, Rs 6.27 trillion) during 2019-20 and 2020-21 only when the EBS happened to be in effect. In other words, lenient taxation policies such as these have directly added to the profitability of the top 100+ companies. And (many of) these companies may have generously bought the electoral bonds — as what some BJP leaders call “gifts”. Other examples of corporate influence are the “monetisation” of public assets — where extremely lucrative Indian assets are given away at a throw away price, at a loss to the exchequer — or the passing of the widely criticised farm bills (Sivagnanaselvam, 2021, Op. cit.). 

Prashant Bhusan argues there is circumstantial evidence pointing to illicit kickbacks funnelled through electoral bonds from corporations to the ruling political parties in exchange for lucrative favours. One particular corporation, amid reports of financial crunch, made hefty donations through the EBS and was subsequently declared to be the preferred bidder for several mining licences.[16] Many companies have funded the ruling parties through electoral bonds and other mechanisms to save themselves from being prosecuted for violating quality controls and norms for production.[17]

35 pharmaceutical companies in India have contributed nearly Rs 1000 crores through electoral bonds. Of these, at least seven companies were being investigated for poor quality drugs when they purchased the bonds (Basu, 2024, Op. cit.).

Drug regulation is just one aspect where the industry seeks concession from the government. Firms could also be looking for cheap lands, tax exemptions, favorable policies, or removal of price caps (ibid.).

With the two mechanisms (raid and red-carpet) in place, and given corporates’ financial ties with the ruling parties, and especially the BJP, corporates make a large amount of extra money directly (through lucrative contracts, buying state-enterprises, etc.) and get tax-breaks and loan write-offs from government-owned banks, which amounts to making money. So they benefit doubly. Indeed, the “quid pro quo arrangements” between parties and donors lead to policy capture, where decisions over policies are directed away from the public interest towards particular interests, and undermine electoral democracy and governance, as Professor Hasan (2024), a retired Professor of Political Studies, says.[18] A former top government official explains the relevant mechanisms:

The relationship between business houses and political parties represents a two-way bond, with the former dictating terms to the latter to adopt “business-friendly policies”, a euphemism for twisting policies and laws to suit their interests, even if they hurt the public interest or even the national interest, and the latter taking corporate help to fund electioneering to be able to continue in power. In other words, a democratic system that the people inherited at the time of Independence gradually degenerated into a “corporatocracy”, which the framers of the Constitution would never have even dreamt of![19]

This is new India’s ‘new democracy’. It is democracy more in name and less in practice and content. It is on sale to the highest corporate bidders.

That the EBS was a pro-corporate and anti-democratic — and therefore anti-people — scheme is evident from the fact that “After being involved in various quid pro quo deals, the corporates do not want any exposure of their underhand dealings” (People’s Democracy, 2024, Op. cit.). The same corporates beat their drums about the little money they throw towards “charity”. Consider how the three main national-level capitalist associations — the Federation of Indian Chambers of Commerce and Industry (FICCI), the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) — tried to file an application in the Supreme Court “to stop the disclosure of the unique identification numbers of the electoral bonds” on the ground that such disclosure would amount to “the breach of confidentiality agreements” and therefore “would undermine the rule of law and present grave implications for the industries interests” (People’s Democracy, 2024, Op. cit.). The Supreme Court, however, refused to entertain the application.

It is clear why corporates make discrete political donations. Why do parties need corporate money? All political parties are more or less pro-corporates and do little to significantly alleviate people’s suffering by ensuring the provision of decent employment and public services such as subsidized healthcare and education. So, when elections come, political parties try to manufacture support from people by diverting their attention from the failure of the government. This is done through advertisements, bribing, use of coercion, fomenting religion-sectarian conflicts, all of which need money. Elections in India are therefore as expensive as elections in the US, while India’s per capita income is a fraction of the US’. As elections become expensive, politicians become more dependent on corporate financing. This dependence of political parties on the super-rich for funding has skewed elections in favour of those who control the economy (Sivagnanaselvam, 2021, Op. cit.). The state, the affairs of which are managed by the leaders of the ruling party, plays an active role in furthering the interests of their corporate donors, often at the expense of common taxpayers, thus increasing economic inequality between corporates and the common people.

The BJP government not only introduced the EBS. It also defended it in court by contending that the right of a buyer to purchase electoral bonds without having to disclose their political preferences ensured an individual’s right to privacy. As if to echo the US Supreme Court’s view in Buckley v. Valeo (1976), in which the court said that a restriction on spending for political communication necessarily reduced the quantity of expression, the Indian government told the Indian Supreme Court that “anonymous political donations” were a part of “the concept of secret ballot” and that “donating money to one’s preferred party is a form of political self-expression that lies at the heart of privacy”.[20] Can a government’s view be more pro-corporate than this? That the Supreme Court refused to accept the government’s defense of the EBS is another matter, which is to be welcomed.

Anti-people character of the EBS and political inequality

Corporate political donation as a cause of common people’s suffering

Ultimately, apart from nature, the labour of common people (those who work for a wage or salary, and independent small-scale producers, including farmers) is the source of wealth. Capitalists and CEOs may go to work every day and get a “salary” but the primary source of their income is their control over property. Common people give a part of their gross income — in the form of taxes — to the state, which is run by political parties. Using tax money, political parties give contracts (for construction of roads, airports, etc.) to corporates who receive a large amount of money. They also receive other benefits. These include tax breaks and write-off of loans owed to government banks and the sale of public sector firms at below-market prices. These last resources could be used for the wellbeing of common people.[21] Benefits also include protection against punitive action for violating environmental and social-economic laws (for example, laws concerning wages and working conditions) by coercive organs of the state managed by the ruling parties. These benefits to corporates mean common people are alienated from a part of their own legitimate income (that is, when the wage received is less than what they should receive, or when they forcefully lose access to land). With government assistance, corporates make super-profits (above-average profits). They use a part of this profit — or a part of the anticipated super-profit — to issue electoral bonds to political parties. Political parties use corporate money to distract attention from the failure of the government and allied corporates to meet the needs of the people and weaken common people’s opposition to those failures. As Noor (2024) says, electoral bonds, benefits to corporates, and political parties form a system within which people’s tax-money circulates.[22]

Consider, for example, how the EBS has allowed the continuation of profit-making activities of drugs, construction and mining and other such companies that not only puts a lot of money in corporates’ hands but also compromises environmental quality and people’s health and lives. Many of these companies have donated money to ruling parties to buy their peace, as noted earlier.[23] Construction and mining companies which engage in substandard practices — whereby workers die in their workplaces, in tunnels, mines, etc., or people are harmed due to the degradation of the environment — are protected from legal action because they have given money to the ruling party. These companies continue to make millions and inflict damage on the people and the environment.

It should also be noted that prior to the EBS, two policies introduced by the pro-corporate government — demonetization and the Goods and Services Tax (GST) — had broken the back of the relatively small-scale businesses. These policies helped major political donors consolidate their market share at the cost of these businesses (Venu, 2024).[24]

Political inequality

Corporate financing of parties, including the financing of elections through the EBS and other such mechanisms, contributes to increasing corporate control over economic life. There are two ways in which monopolistic control happens (Marx, 1887: 438-439).[25] One is that a corporate makes profit/super-profit, a part of which is reinvested to make the business bigger. Another is that corporates eat up smaller-scale businesses. A pro-corporate government such as the BJP contributes to both of these mechanisms, and therefore to people’s suffering. More broadly, economic inequality leads to political inequality.

Political inequality exists in two forms. One is between corporates, including family-owned subsidiaries, and common people. Another is between parties: that is between parties of big businesses (mainstream parties) and left parties, and among mainstream parties, some of which may be slightly more conciliatory towards common people than others.

Let me talk about the first political inequality: between corporates and common people. One may accept for a minute that apart from chasing money, corporates are also political animals with an interest in the promotion of democracy. However, if corporates’ intention are to promote/sustain political democracy, why do they not usually fund left parties, workers’ and farmers’ organizations, and progressive civil society associations, all of which fight to defend democracy and promote transparency (whether these organizations would accept such funding is a different matter). In fact, the BJP government, which is the government of, by and for the corporates, attacks these organizations as those that divide the nation (‘tukde tukde gang’) and as anti-national, when the BJP government itself divides the nation along religious lines and is anti-national, acting in the interest of corporates. Why do corporates not speak up when the democratic rights of common people, including minorities, are crushed? The answer is that making money in an endless manner is the business of the big business. That sets a limit within which they may engage in “political activities”. Usually, their political activities — such as donating money to political parties — are less political and more economic. As India’s Supreme Court Chief Justice said: “contributions made by companies are purely business transactions, made with the intent of securing benefits in return” (quoted in The Wire, 2024).[26] Therefore,

The ability of a company to influence the electoral process through political contributions is much higher when compared to that of an individual. A company has a much graver influence on the political process, both in terms of the quantum of money contributed to political parties and the purpose of making such contributions. (ibid.).

The Supreme Court has correctly drawn attention to the relation between economic inequality and political inequality and therefore to the political-social role of money.[27] It said: “Economic inequality leads to differing levels of political engagement because of the deep association between money and politics. At a primary level, political contributions give a ‘seat at the table’ to the contributor. That is, it enhances access to legislators. This access also translates into influence over policymaking.” (ibid.)

The second form of political inequality is among political parties. It is through political parties that the interests and opinions of different segments of society are represented. A level playing field contributes to democratic elections, other things being equal. Political competition between mainstream and left parties, and among mainstream parties, enhances the democratic content of political life, and common people benefit from such competition. To the extent that there are progressive elements in non-BJP parties — the elements that defend people’s secular-democratic rights and livelihood, however modestly and inadequately — it is through these parties, and especially left parties, that common people express their political opinion and economic interests.

Yet, there is enormous inequality between political parties, and especially between the BJP and its opposition, which has taken the form of The Indian National Developmental Inclusive Alliance (or INDIA), an alliance of 28 parties to contest the 2024 Lok Sabha elections in April-May 2024. Given the race to the bottom that the BJP has initiated (the race being the use of money to shape electoral results), corporate funding of elections, including via secretive EBS, makes it very difficult for parties such as the Indian National Congress (INC) to fight elections. The political inequality is especially stark between left parties and the rest. The capitalist system boasts of competition while monopolization is the rule of life in economics as in politics. The majority of secretive donations have been received by the BJP — the far right, pro-corporate party — which won merely 31% of vote in 2014 when it came to power (Figs 3-4).

Figure 3: BJP’s monopoly over corporate funding

Source: Sarkar (2024).[28]

Figure 4: Growing income disparity between two main national parties

Source: Sarkar (2024, Op cit.).

Conclusion: Corporate funding, democracy, and (‘crony’) capitalism

Nothing exists in isolation. The EBS, or more generally, the secretive funding by corporates of their favoured political parties, definitely does not exist in isolation. It is part of a larger system, the other parts of which are: the Reserve Bank of India, the state-owned banking system (SBI) which managed the EBS, the parliament, the Election Commission of India, the Supreme Court, a silenced media, and coercive state agencies, such as the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI).

The EBS signifies and has been possible because of a large degree of impairment of India’s apex institutions.[29] While the Reserve Bank of India, the Election Commission of India, and even the Parliament expressed serious reservations about the EBS prior to its introduction, their voice was suppressed by an extremely powerful executive, backed by a party with a brute majority gained at the 2014 national election on the basis of money and muscle power and a divisive Hindu-majoritarian agenda. Even the Supreme Court, which rightly values the principle of judicial review, failed to stop the introduction of the EBS and its 6-year existence. People say by striking down electoral bonds, the Supreme Court has defended democracy. Yes and no. By allowing neoliberal capitalism and increasing corporate control over the economy, the collective wisdom of the court has, intentionally or not, created conditions for undemocratic things such as corporate funding, including the EBS. It should be noted that there is limited scope for a judicial review by the Supreme Court in policy matters, and especially economic policy matters (even if the manner in which a decision is taken by the government can always be examined by it, as the court itself has said). By not stopping the politics of hatred and demolition of minorities’ place of worship, which are sadly means of getting votes, the Court and judiciary has allowed a majoritarian party to be in power, which then plays its pro-corporate game.

Democracy, in its original meaning, is the power of the people and of the poor (who happened to be the majority). And to the extent that India has had a democratic system, there is a big threat to it. Indeed, even if voter turnouts are high, “the poor are increasingly left out of the electoral process in terms of their actual ability to shape electoral results to the extent that they had some…” (Sivagnanaselvam, 2021, Op. cit.).[30] This signifies the political alienation of the poor, the majority.

The opaque system of financing of political parties, including via the EBS, is not just the quid pro quo between corporates and ruling parties, especially the BJP. It is also a part of the broader anti-secular fascistic agenda, which requires the resources that such an opaque system provides. Indeed, the fascistic project of building a Hindu Rashtra certainly needs money (as well as the support of all the strongmen scattered across the nation) — and the opaque political funding provides the money (Thakurta and Dasgupta, 2024). It is not surprising that the EBS was introduced by the BJP, which as a far right, pro-business, pro-corporate, authoritarian, anti-secular, demagogic party is truly anti-national (where the nation = nation of the poor, workers and peasants, the majority), and is supported by its ideological parent, RSS (Rashtriya Swayamsevak Sangh), which has defended the EBS as an “experiment”.

Disparity among political parties in terms of access to funds creates political inequality, especially between mainstream parties and progressive parties that fight for the political and economic rights of common people. This affects electoral democracy by tilting public policy towards the interests of the super-rich while ignoring the interests of the majority, particularly the poor/near-poor.[31]

Many say the corporate donations made through EBS are evidence of crony capitalism, where a regime favours certain capitalists over others because of reciprocal ties between them and the regime. Much of the criticism of the EBS is from the standpoint of crony capitalism, in which the BJP has monopolized corporate funding. These are not un-important considerations. But the main problem is capitalism per se. You cannot have capitalism and not have crony capitalism or neoliberal capitalism, etc. One must ask: what is it about the BJP and the Congress that make them rely on corporate funding and not on funding from workers and peasants? Why are billions needed to fight elections? What is being bought with the money? Why do corporates not fund Communist parties, urban workers’ unions and farmers’ unions?

When capitalism is “sliced” up into “crony capitalism” or “neoliberal capitalism”, this capitalism or that capitalism, there is potentially an underlying agenda: a better form of capitalism is possible and people’s energy should be directed at just that. One can use, say, “crony capitalism” as a concept to highlight a specific and contemporary aspect of capitalism (how a government favors only/mainly its friends in the capitalist class). But should the masses and their leaders lose sleep over the fact that certain corporate friends of the government are treated favourably and not other corporates? Is non-crony capitalism better than crony capitalism? What is it about the state as such that has allowed crony capitalism to exist? And can there be an actually existing capitalist state without “instrumentalist” ties between capitalists and the state? (Das, 2022, Op. cit.).

For the masses, there are more important concerns than the issue of crony capitalism. Ultimately, if not in the proximate situation, the contradiction between BJP and its non-left opposition is not a fundamental one, even if it is crucial; after all, many elements of BJP’s opposition (INDIA) have partnered with the BJP and support corporates. Ultimately, and when the masses really rise in revolt against the capitalist system, there is nothing in the political landscape, including crony capitalism, that would stop the ruling party in a bourgeois democracy from extending a degree of protection to another bourgeois party, “while the proletariat” along with its organizations and parties, “on all serious, profound and fundamental issues, gets martial law or pogroms” (Lenin, 1918a).[32] While the bourgeoisie exercises its political dominance “through the introduction of the representative system which rests on [formal] bourgeois equality before the law and the recognition of free competition”, the working class is excluded from effective control over the state.

It is the case that the greater the inequality between working class and the propertied class, the more excluded the working masses will be from the exercise of political power. This happens because as inequality between the amount of social product that goes to the working class and property owners rises, the state becomes more authoritarian — suppressing the democratic rights of the masses — to preserve the privileges of the capitalist class. The EBS, which exemplifies corporate economic and political influence, does not make the state more undemocratic, but the undemocratic nature of the capitalist state is effected through electoral bonds and other similar methods of corporate political funding.

The EBS saga, and other things happening in India, shed light on the nature of democracy and capitalism. There is no doubt that bourgeois democracy is “a great historical advance in comparison with medievalism” (Lenin, 1918a, Op. cit.). Marxists in fact “demand the extension of … bourgeois democracy” as a tool for working class organization, in order to prepare the people for revolution for the purpose of overthrowing …the exploiters” (Lenin, 1918b)[33] (italics in original). However, there are strict limits to what the democratic form can deliver, with or without corporate funding.

And when democracy does exist, and to the extent that it does exist, it is, ultimately, “for an insignificant minority”, it is “for the rich – that is the democracy of capitalist society” (Lenin, 1917).[34] This is exemplified by, for example, corporate funding, including through EBS in India, and various other pro-corporate actions of the state. Democracy “always remains, and under capitalism is bound to remain, restricted, truncated, false and hypocritical, a paradise for the rich and a snare and deception for the exploited, for the poor” (Lenin, 1918a, Op. cit.). Democracy effectively means dictatorship of the bourgeoisie as a whole. I can work for employer E1 today and E2 tomorrow. But that does not mean I am not a wage slave. Similarly, I can vote for this faction of the ruling class or this party of the bourgeois class. But that does not mean I am not a political slave — a slave to capitalist politics and to the state. Left politics is 100 times more secular, more democratic, more pro-people, more pro-environment and yet look at their vote percentage as opposed to that of the BJP and Congress. It is miniscule even if left politics, in spite of its various inadequacies, represents the common people better than any non-left party, including, obviously, the far right BJP.[35] Why? What does this fact say about political equality between corporates supported by non-left parties, and the masses?

The bourgeoisie is an exploiting class. It talks about democracy, but “at every step”, it erects “thousands of barriers to prevent the oppressed people from taking part in politics” (Lenin, 1918).[36] It must. Poverty of the masses is one:

Owing to the conditions of capitalist exploitation, the modern wage slaves are so crushed by want and poverty that “they cannot be bothered with democracy”, “cannot be bothered with politics”; in the ordinary, peaceful course of events, the majority of the population is debarred from participation in public and political life (Lenin, 1917, Op. cit.).

Often acute poverty of the masses leads them to vote for a party that is extremely anti-people, if such a party throws them some crumbs (a few kilos of grain, a small consumer item, a few rupees). Poor people may avoid the worst forms of destitution in the short term but come to be enslaved to a reactionary political party for years. The ignorance of the masses partly manufactured by the corporate media — which is also increasingly infected with post-truth politics where there is an effective difference between lies and the truth [37] — is another barrier to their democratic participation. The ideas of the different fractions of the ruling class are the ideas that often shape our thinking, and these ideas are disseminated by the media owned by the ruling class.[38] There is then the violence inflicted by the political system, which is nowadays being supplemented by the violence committed by bigoted fascistic foot-soldiers (the informal police). As well, there is administrative coercion by investigative and other such agencies, of which the absence of a level playing field for left parties is one expression.[39]

What is to be done then? There must be public funding of elections, and this must be made possible by an increase in corporate taxes. Corporate funding for political parties must be banned. The dictum of “one person one vote” must be reinstated in favour of the current “one Rupee one vote” regime (Sivagnanaselvam, 2021, Op. cit.). Mixing religion with politics must be completely disallowed and there must be no state funding for any party that mixes religion with politics. Left parties must develop a strong worker-peasant alliance to cooperatively mobilize the masses for deepening democracy in the economy and in politics, as part of their fight for socialist democracy (Das, 2023).[40] There is no alternative to this.

Raju J Das is a Professor at York University. Information about his work is available at


[1] This is a slightly revised text of an online talk delivered on March 30, 2024, at a national seminar entitled, “Electoral bonds and cronyism in India: Implications for democracy”, at the Public Policy Research Institute (PPRI), Thiruvanathapuram (Kerala), on the kind invitation by Professor Mohanakumar, the Director of PPRI.

[2] Association for Democratic Reforms. 2021. “Electoral bonds and opacity in political funding”

[3] “Everybody is now understanding that [the EBS] is not only the biggest scam in India but is the biggest scam in the world”, says Dr. Prabhakar, a political economist Quoted in: Business Standard. 2024. “Electoral bond biggest scam in the world, will cost BJP heavily”

[4] Banerjee, N. 2023. “Electoral bonds promoting crony capitalism”. Shillong Times.

[5] Bharti, N., Chancel, L. Piketty, T. and Somanchi, A. 2024. “Income and wealth inequality in India, 1922-2023: the rise of the billionaire raj”

[6] Supreme Court Observer. 2019. “Petitioners argue that the Scheme is a vehicle for foreign political funding”

[7] Basu, N. 2024. “Travails of a Chaukidaar: Fraud and Deception of Electoral Bonds”. People’s Democracy.

[8] Association for Democratic Reforms (2021). “Electoral bonds and opacity in political funding”

[9] Das, R. 2022. Marx’s Capital, Capitalism and Limits to the State: Theoretical Considerations. London: Routledge.

[10] Bhusan, P. 2024. “Fear of ED, CBI, bribe for contracts… bonds a tripartite conspiracy” Bhusan adds that 41 companies facing probe by investigating agencies of the government had donated Rs 2,471 crore to the BJP through bonds. According to him, 33 groups of companies that purchased the bonds got 172 major contracts and project approvals from the Indian Government. “They (the companies) have got a total of Rs 3.7 lakh crore in projects and contracts, in exchange for Rs 1,751 crore electoral bond donations to the BJP.”

[11] People’s Democracy. 2024. “Hindutva-Corporate Nexus Revealed”

[12] Basu, N. 2024. “Unraveling of Electoral Bonds and its Criminal Underpinnings”. People’s Democracy.

[13] People’s Democracy. 2024. “Hindutva-Corporate Nexus Revealed”

[14] Thakurta, P. and Dasgupta, A. 2024. “The totalitarian project behind the electoral bonds scheme”, The Frontline.

[15] Sivagnanaselvam, D. 2021. “Electoral Bonds Are a Threat to Indian Democracy”

[16] Citizens for Justice and Peace. 2024. “Landmark Ruling: Supreme Court declares Electoral Bond Scheme unconstitutional in unanimous decision, citing violation of right to information” “The UK-based Vedanta groups contributed Rs. 255 million to Janhit Electoral Trust in FY 2018-19 and all of its donations went to the BJP. Sterlite Copper is a subsidiary organization of Vedanta Groups based in the Tuticorin area of Tamil Nadu where it has been causing severe environmental harm. In protests against the corporation, the Police which intervened on the side of Sterlite, shot dead 13 protesters while injuring many more” (Pankaj and Mogha, 2021). Pankaj, J. and Mogha, S. 2021. “The corporate-government nexus in Indian politics: an analysis of corporate backed electoral trusts”

[17] The Week. 2024. “Electoral Bonds scheme worst corruption scam state funding of polls needed Yechury”

[18] Hasan, Z. 2024. “The SC's Electoral Bonds Judgement Affirms the Primacy of the Vote Over the Note”, The Wire.

[19] Sarma, A. 2024. “The sordid story of the unholy Bond: Blood money, ransom, or outright bribe?”

[20] Vermani, E. 2024. “‘Part of Secret Ballot’: How the Modi Govt Backed Electoral Bonds in the Supreme Court”, The Wire.

[21] As noted earlier, the reduction of corporate taxes has resulted in a loss of potential revenue, a part of which could have been used for people’s wellbeing. So, lost corporate tax affects the common people.

[22] Noor, A. 2024. “The A to Z of The Electoral Bonds Issue: Why You Should Care as An Indian Voter”

[23] The Week. 2024. “Electoral Bonds scheme worst corruption scam state funding of polls needed Yechury”

[24] Venu, M. 2024. “‘Quid-Pro-Quo’: How Revealing Electoral Bonds Will Clear Questions of ‘Len-Den’”, The Wire.

[25] Marx, K. 1887. Capital Vol 1.

[26] The Wire. 2024. “Electoral Bonds Scheme Violative of Voter’s Right to Information: Top Quotes From the Supreme Court”

[27] See Das, R. 2020. “The social power of money and the neoliberal capitalist model of development”, LINKS International Journal of Socialist Renewal.

[28] Sarkar, S. 2024. “What Needs to Be Disclosed by March 31: 5 Charts to Gauge the Cash Flow Through Electoral Bonds”

[29] Vaishnav, M. 2019. “The electoral bonds: the safeguards of Indian democracy are collapsing”

[30] One of the processes that express such alienation is NOTA votes — votes for None of The Above. In the 2014 and 2019 Indian general elections, about 1.04% of voters chose to vote NOTA, while in some states, it was as high as 2%. Firstpost. 2019. “Lok Sabha Election Results 2019: Most NOTA votes were cast in Bihar; Maharashtra recorded 4,86,902 such votes with Palghar topping the list”

[31] Hasan, Z. 2024. “The SC's Electoral Bonds Judgement Affirms the Primacy of the Vote Over the Note”

[32] Lenin, V. 1918a. Bourgeois and Proletarian Democracy

[33] Lenin, V. 1918b. The Soviet constitution.

[34] Lenin, V. 1917. The state and revolution.

[35] On the Indian left parties in relation to the other parties, see: Das, R. 2020. Critical Reflections on Economics and Politics in India: A Class Theory Perspective. Leiden/Boston: Brill.

[36] Lenin, V. 1918. The soviet constitution.

[37] On post-truth politics, see: Das, R. 2023. Contradictions of Capitalist Society and Culture: Dialectics of Love and Lying. Leiden/Boston: Brill.

[38] “The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it.” Marx, K. and Engels, F. 1968. German Ideology.

[39] For a detailed discussion on the nature of democracy and barriers to masses’ democratic participation in the capitalist class society, where the working masses are fundamentally alienated from state power as a part of their class-existence, see Das, R. 2017. Marxist Class Theory for a Skeptical World. Leiden/Boston: Brill, Chapter 9.

[40] Das, R. 2023. “On the worker-peasant alliance in India (and other countries of the Global South)”, LINKS International Journal of Socialist Renewal.