Author: Cheshta Singh ,Agra college Faculty Of Law
To the Point
Political funding is one of the most critical yet controversial aspects of a democratic system. In India, concerns regarding black money, corruption, and lack of transparency in political donations have existed for decades. To address these issues, the Government of India introduced the Electoral Bonds Scheme in 2018 as a new mechanism for political contributions. The scheme allowed individuals and corporate entities to donate to political parties through bearer bonds purchased from authorised banks, primarily the State Bank of India.
While the stated objective of the scheme was to cleanse political funding by promoting donations through formal banking channels, it simultaneously introduced a system of donor anonymity. This anonymity prevented voters from knowing the identity of contributors funding political parties, thereby raising serious concerns regarding democratic accountability, transparency, and electoral fairness. The scheme sparked intense political debate and legal scrutiny, ultimately culminating in judicial intervention by the Supreme Court of India.
This article critically examines the Electoral Bonds Scheme from a constitutional and political perspective, focusing on its impact on democratic principles, voters’ rights, and the balance of power in electoral politics.
Use of Legal Jargon
The legal discourse surrounding electoral bonds engages multiple constitutional and statutory concepts. These include Article 19(1)(a) of the Constitution of India, which guarantees freedom of speech and expression and has been judicially interpreted to include the right to information. The scheme also implicates the principle of free and fair elections, a recognised component of the basic structure doctrine.
Other relevant legal terms include manifest arbitrariness, constitutional morality, electoral equality, corporate political financing, quid pro quo arrangements, anonymity of donors, and state accountability. Amendments made to various statutes through the Finance Acts also raise questions concerning legislative overreach and procedural impropriety in bypassing detailed parliamentary scrutiny.
The Proof
The Electoral Bonds Scheme was introduced through the Finance Act, 2017, and implemented in 2018. It involved amendments to several key legislations, including the Representation of the People Act, 1951, the Income Tax Act, 1961, and the Companies Act, 2013. These amendments collectively removed earlier safeguards that required political parties to disclose the identity of donors contributing above a specified threshold.
One of the most significant changes was the removal of the cap on corporate donations. Prior to the amendment, companies could donate only a limited percentage of their average net profits to political parties. The revised framework allowed unlimited corporate contributions, including from loss-making and newly incorporated companies, raising concerns about shell companies and indirect influence over public policy.
Empirical data released during judicial proceedings demonstrated that a substantial portion of electoral bond contributions flowed to ruling political parties, both at the central and state levels. This raised apprehensions regarding the unequal access to financial resources and the creation of an uneven electoral playing field. Additionally, while donor identities remained hidden from the public, the banking system and the state retained access to this information, leading to fears of selective disclosure and political victimisation.
Abstract
The Electoral Bonds Scheme represents a significant shift in India’s political funding architecture. Introduced with the intention of eliminating black money from electoral politics, the scheme sought to formalise political donations through regulated banking instruments. However, the design of the scheme prioritised donor anonymity at the cost of transparency and public accountability.
This article analyses the constitutional validity of the Electoral Bonds Scheme, examining whether the restriction imposed on the voter’s right to information can be justified in a democratic society. It also evaluates the political consequences of opaque funding mechanisms and the role of the judiciary in safeguarding constitutional values. The article argues that transparency in political financing is indispensable for the proper functioning of democracy and informed electoral participation.
Case Laws
Association for Democratic Reforms v. Union of India (2002)
The Supreme Court held that the right to know the antecedents of electoral candidates forms part of the fundamental right to freedom of speech and expression under Article 19(1)(a). The judgment emphasised that informed voting is the foundation of a healthy democracy.
People’s Union for Civil Liberties v. Union of India (2003)
The Court reaffirmed that the right to information regarding electoral matters is essential for voters to make informed choices. Any restriction on such information must satisfy the test of reasonableness.
State of West Bengal v. Committee for Protection of Democratic Rights (2010)
The Supreme Court recognised democracy as a basic feature of the Constitution, underscoring the importance of transparency, accountability, and rule of law in governance.
Electoral Bonds Case (2024)
In a landmark judgment, the Supreme Court struck down the Electoral Bonds Scheme as unconstitutional. The Court held that donor anonymity violates the voter’s right to information and undermines free and fair elections. It observed that political equality cannot be sustained when financial influence operates in secrecy.
Conclusion
The Electoral Bonds Scheme highlights the complex relationship between political finance, transparency, and democratic accountability. While the objective of curbing black money in elections is undoubtedly legitimate, the means adopted must conform to constitutional principles. The scheme’s emphasis on anonymity compromised the voter’s right to know and distorted the level playing field essential for electoral democracy.
The Supreme Court’s intervention reaffirmed the primacy of transparency in political funding and reinforced the notion that democracy extends beyond periodic elections. It encompasses informed participation, accountability of political actors, and public trust in institutions. Moving forward, any reform in political funding must balance privacy concerns with the overarching need for openness and disclosure to preserve the democratic fabric of the nation.
FAQS
Q1. What was the primary objective of the Electoral Bonds Scheme?
The scheme aimed to reduce black money in politics by encouraging political donations through formal banking channels.
Q2. Why did the Electoral Bonds Scheme face constitutional challenges?
It allowed anonymous political donations, thereby restricting the voter’s right to information and undermining transparency in elections.
Q3. Which constitutional provision was most affected by the scheme?
Article 19(1)(a) of the Constitution, which includes the right to information as part of freedom of speech and expression.
Q4. How did the scheme affect electoral equality?
Disproportionate allocation of funds to ruling parties created an uneven playing field, affecting fair political competition.
Q5. What is the significance of striking down the Electoral Bonds Scheme?
It reaffirmed that transparency and accountability are essential components of free and fair elections in a constitutional democracy.
