In February 2024, the Supreme Court of India delivered a landmark judgment declaring the Electoral Bond Scheme unconstitutional, citing violations of citizens’ right to information and the potential for fostering quid pro quo arrangements between corporations and politicians.
Introduced in 2018 by the Government of India, the Electoral Bond Scheme aimed to reform political funding by allowing individuals and corporations to donate to political parties anonymously.
These bonds, available in denominations ranging from ₹1,000 to ₹1 crore, could be purchased from designated branches of the State Bank of India (SBI) and subsequently donated to political parties, which could encash them within a specified period.
The scheme was intended to curb the influence of unaccounted money in politics by channelling donations through formal banking channels.
However, it soon became a subject of intense controversy, raising concerns about transparency, accountability, and the potential for misuse.
Electoral bonds are bearer instruments, similar to promissory notes, that allow individuals and corporations to donate money to political parties. These bonds can be purchased from authorized branches of the State Bank of India (SBI) and are valid for 15 days.
Political parties registered under Section 29A of the Representation of the People Act, 1951, and securing at least 1% of the votes polled in the last general election or state assembly election are eligible to receive donations through electoral bonds.
On February 15, 2024, a five-judge bench of the Supreme Court, led by Chief Justice D.Y. Chandrachud, unanimously struck down the Electoral Bond Scheme.
The Court held that the scheme violated citizens’ right to information under Article 19(1)(a) of the Constitution, as it enabled anonymous donations, thereby preventing voters from knowing the sources of political funding.
The Court emphasized that transparency in political funding is essential for the integrity of the electoral process and that the anonymity provided by the scheme could lead to quid pro quo arrangements, undermining democratic principles.
The court also directed the government to reduce the anonymity associated with electoral bonds by requiring donors to disclose their identity to the Election Commission of India (ECI).
This move was aimed at striking a balance between the donor’s right to privacy and the public’s right to know.
The Supreme Court’s decision has significant implications for political funding in India:
1. Transparency and Accountability:
The judgment mandates that details of donors and the amounts contributed be made public, enhancing transparency and enabling voters to make informed choices.
2. Regulation of Corporate Donations:
The Court’s ruling addresses concerns about unlimited corporate donations influencing policymaking, thereby promoting a more level playing field among political parties.
3. Role of the Election Commission and SBI:
Following the verdict, the Election Commission of India and SBI are required to disclose all donor information, ensuring compliance with the Court’s directives.
The Apex Court’s decision elicited varied responses from across the spectrum including but not limited to Opposition parties, such as the Indian National Congress, who welcomed the judgment, describing the Electoral Bond Scheme as a “scam” and an “extortion racket.”
They argued that the scheme disproportionately benefited the ruling party and compromised the fairness of elections.
Furthermore, Civil Advocacy groups and transparency activists hailed the verdict as a victory for democracy, asserting that it would deter corruption and enhance the integrity of the electoral process.
Also, some corporate entities expressed concerns about potential repercussions, fearing that the disclosure of donor identities might expose them to political retribution or impact their business interests.
Legal experts and scholars have analysed the Supreme Court’s verdict from multiple perspectives:
• Constitutional Validity:
The Court’s decision underscores the importance of the right to information as a fundamental right, reinforcing the principle that voters are entitled to know the sources of political funding.
• Impact on Electoral Integrity:
By striking down the scheme, the Court aimed to prevent the erosion of electoral integrity caused by anonymous and potentially illicit funding, thereby strengthening democratic governance.
• Future of Political Funding:
The judgment calls for the establishment of a more transparent and accountable framework for political donations, prompting discussions on alternative models that balance donor privacy with public interest.
The Hon’ble Supreme Court’s verdict on the Electoral Bond Scheme marks a pivotal moment in India’s democratic journey.
By prioritizing transparency and accountability in political funding, the Court has reinforced the foundational principles of democracy, ensuring that the electoral process remains free, fair, and informed.
Conclusion
As India moves forward, it is imperative to develop robust mechanisms that facilitate legitimate political contributions while safeguarding the public’s right to know, thereby fostering a more transparent and equitable political landscape.
The controversy surrounding electoral bonds has raised important questions about the integrity of political funding in India.
The Supreme Court’s judgment is a step towards addressing these concerns and promoting greater transparency in the system.
However, the issue is far from settled, and further reforms may be needed to ensure that political funding is fair, transparent, and accountable.
For seeking personalised information regarding the legal remedies available contact Ashwarya Sinha at: info@ashwaryasinha.com and office@ashwaryasinha.com
