Author: Swosti Singh Napit, Symbiosis Law School, Pune
To the point
The government, led by the BJP, established electoral bonds in 2017, which enable people and companies to donate money, restricted only by amount, to political parties in an anonymous manner. The State Bank of India (SBI) would sell such interest-free and tax-free bonds to donors who would transfer them to any person who could get the cash back. The BJP said that this system would introduce clean money into politics and retain the anonymity of donors.
The government, led by the BJP, established electoral bonds in 2017, which enable people and companies to donate money, restricted only by amount, to political parties in an anonymous manner. The State Bank of India (SBI) would sell such interest-free and tax-free bonds to donors who would transfer them to any person who could get the cash back. The BJP said that this system would introduce clean money into politics and retain the anonymity of donors.
However, seven years down the line, the plan has boomeranged. Rather than transparency, it has come up with a black box that provides secrecy about who funds political parties to the people. It has been the worst of all because it has provided the BJP with a huge lead. According to reports, these bonds had seen the ruling party take an overwhelming 90 percent of all corporate donations, reaching close to 2 billion dollars by the end of 2023. Opponents, such as the electoral reformers, including the ADR (which contested the scheme in court), claim that this system harms and does not aid democracy since it deprives the larger voter population of information and instead benefits those who are in positions of power.
The significance of these Electoral bonds has happened to be the opposite of democratic props, which breed on transparency: securing and giving an advantage to big money and guaranteeing the discrepancy of the playing field.
Analysis of the SC verdict
The fact that the Supreme Court recently overturned the Electoral Bonds Scheme as being unconstitutional and arbitrary is not only a legal contribution but a decisive act that can save the soul of Indian democracy. The scheme had been far too long to enable political parties to take unbounded amounts of money in secret with no oversight. This decision reinstates the supremacy of the people by repeating one of the basic truths that transparency is a requirement of a vibrant democracy.
The main reason why the scheme was struck down by the Court was that it contravened Article 14 of the Constitution, which provided equality before the law. It was often observed that Political parties get money that the citizens are not often informed about who gave it and for what reasons, and this leads to an imbalance of power. The opposition parties and the citizens are left in the dark, and the rich donors and ruling parties prosper in closed doors. This closed system enables the money to intervene in policy, abdicates the little voter, and corrupts the trust of the people.
The critics have branded the scheme to legalise corruption, since they believe that it kept the origin of mammoth political donations a secret. The Supreme Court did the same. It is rightfully labeled such a scheme as arbitrary, that is, it lacked guidelines and was not at all fair. Why is it important that a political party know who gave them money and the rest of society does not? Why must there be a possibility of information being accessed even by the ruling party but not by the election authorities themselves?
This is not only a case of overthrowing an imperfect law. It is a powerful statement that an open nation lives based on clean elections. The voice of the people cannot be drowned out by money. Political allocations should be transparent since political secrets are the mortal enemies of accountability.
The proof
About 16,500 crore of the electoral bonds were sold in India between 2018 and 2024, with the vast majority of them, more than 6000 crore or 55 percent, landing with the BJP party, as per the Election Commission and Supreme Court filings.The most shocking thing is that there are at least 33 companies that were operating at very heavy losses, as the net loss of all these companies together was above 84000 crore; however, they donated 582 crore bonds. In these donations, the BJP received almost 75 percent of the cash directly. It was also strange that firms like Future Gaming and Megha Engineering donated huge amounts of money, 1,368 crore and 966 crore, within a few months after being raided by central authorities like the Enforcement Directorate and the Income Tax Department. Later on, many of these companies won huge government contracts, some of which exceeded 1.3 lakh crore chaise, and thus the issue of quid pro quo contracts came into the picture. Also, 55 companies were identified to have contributed over 7.5 percent of their profits. This is illegal until the change in the law in 2017, whereby the cap was removed to allow unlimited donations by corporations. These were supported by facts provided by the Election Commission, Association for Democratic Reforms (ADR), Supreme Court documents, and various investigative news media.
ConclusionÂ
The judgment on the electoral bonds made by the apex court in itself has become a launch pad for the democratic path of India. It highlighted how excessive political funding, even with a hand of secrecy, can damage the ability of a competitive marketplace and bring concentrated power into the hands of a small group of people. The Court has just sent a strong reminder that I have no democratic right to keep things secret; this is a constitutional right. The people should be given the authority to know who their rulers take money on their behalf so that they can vote wisely and gain power and accountability. In the future, any political donation system should create the right balance between the privacy of donors and public trust. The decision is not only a decision against a single bad plan; it is a cry to reconstitute political financing with fairness, openness, and integrity as its pillars.
FAQS
What are electoral bonds, and for what purpose have they been created?
Electoral bonds are a valid means of raising money, introduced in 2017 to enable collecting anonymous political party money through banks. According to the government, they would curb the black money in political financing and also become transparent.
What is the reason the Supreme Court has struck down the electoral bonds scheme?
The Supreme Court has held that the scheme contravened the right of the citizens to know the source of funding for the political parties, which affected free and fair elections. The anonymity promoted corruption and biased parties in power, which contravened the constitution.
What were the impacts of the electoral bonds on Indian politics?
Electoral bonds, instead of enhancing transparency, facilitated opacity as all the donors would be beyond the reach of the government and the opposition parties, and anonymity would be provided to the donations made by corporations.
What implications will the verdict have on the political funding of the future in India?
The ruling establishes a need for a new approach that promotes donor confidentiality and accountability. The aspect of political funding should be transparent to the extent that it does not cause corruption, but it does not jeopardize the rights of the genuine donors.
What are the advantages of transparency in political funding as far as democracy is concerned?
Transparency will mean that everybody is informed who is supporting the candidates, so they will not be able to have undue influence by corporations or special interests. It assists in keeping public trust in elections and keeps politicians on notice.
