Author: Harshit student of Uttar Pradesh State Institute Of Forensic Science, Lucknow
To the Point
By enabling contributors to purchase bonds from the State Bank of India and distribute them to officially recognized political parties without publicly revealing their identities, the Electoral Bonds Scheme sought to simplify political contributions. However, the program legitimized large, opaque financial contributions to political parties by safeguarding the donors anonymity and lifting previous restrictions on corporate donations. Quid-pro-quo agreements between corporations and political organizations were made possible by it, which also reduced transparency and avoided public scrutiny. In a historic decision in 2024, the Supreme Court declared that the plan went against both the right to information and the idea of free and fair elections.
Use of Legal Jargon
Due to its impact on the public’s right to information under Article 19(1)(a) of the Indian Constitution the Electoral Bonds Scheme raised legal issues. Citizens are able to learn about the actions of their government thanks to this right. Additionally, the plan violated the principle of a Level Playing Field which states that every political party should have an equal opportunity to win elections. The law did not require Rajya Sabha approval because it was passed as a Money Bill under Article 110. However, it was legally dubious to make such a significant change with a Money Bill. The court also examined whether the government had adhered to the Doctrine of Proportionality and the Principle of Transparency which stipulate that government actions must be just and reasonable.
The Proof
When the Electoral Bonds Scheme was introduced in 2018, it opened the door for individuals and companies to make anonymous donations to political parties. This shift came about through changes to several laws, including the Companies Act and the Representation of the People Act.
Prior to this scheme, companies were limited to donating just 7.5% of their profits and were required to disclose which party they supported. However, with the new rules, companies could contribute unlimited amounts without having to reveal their identities. Even newly established or shell companies were able to participate in this system.
Both the Election Commission and the Reserve Bank of India raised alarms, warning that this lack of transparency could lead to potential abuses. Yet, the scheme persisted. From 2018 to 2023, bonds worth over ₹12,000 crore were sold, with nearly 95% of the donations funneled to the ruling party. This sparked significant concerns regarding fairness in the political landscape.
In 2024, the Supreme Court declared the scheme unconstitutional, stating that it infringed on the public’s right to know who was financing political parties. The Court mandated that all information about bond buyers and recipients be made public.
Abstract
In a democracy, free and fair elections are crucial. They allow people to choose their leaders without bias. However, in India elections are often swayed by money. Political parties and candidates spend heavily on campaigns, advertisements, and events. To increase the transparency of political donations the Indian government introduced the Electoral Bonds Scheme in 2018. The goal was to eliminate black money from elections. Unfortunately, rather than promoting transparency, the scheme made it easier for wealthy individuals and large companies to donate substantial amounts to political parties without revealing their identities. In 2024, the Supreme Court of India declared the scheme illegal. This article explains the scheme in simple terms, outlines the legal issues, describes the Supreme Court ruling and suggests ways to enhance transparency in political funding
Case Laws
1. Association for Democratic Reforms v. Union of India (2024) – The Supreme Court ruled that the Electoral Bonds Scheme was unconstitutional. It stated that the scheme took away the public’s right to know who was funding political parties.
2. People’s Union for Civil Liberties v. Union of India (2003) – In this case, the Supreme Court declared that voters have a right to know candidates’ backgrounds including their financial and criminal records.
3. K.S. Puttaswamy v. Union of India (2017) – The Court stated that the government must follow rules of fairness and reasonableness when it uses people’s data or keeps information secret.
4. State of Uttar Pradesh v. Raj Narain (1975) – This case affirmed that people have a right to know how public officials act especially during elections.
Conclusion
The Electoral Bonds Scheme aimed to improve transparency in political funding and reduce black money. In reality, it did the opposite. The scheme allowed for unlimited and anonymous donations primarily from corporations by which there are raising serious concerns about fairness in elections. It favored the ruling party and kept the public unaware of who was funding political campaigns.The Supreme Court’s 2024 judgment correctly noted that the scheme violated citizens’ right to know which is an essential aspect of free and fair elections. This judgment is a significant step towards strengthening electoral democracy in India. To protect the integrity of Indian democracy, political funding must be transparent, fair, and accountable. The law should establish clear limits on donations, require disclosure of donor identities and give the Election Commission the power to monitor political financing closely. Only then can we ensure that the influence of money does not drown out the voice of the average voter and that elections truly represent the will of the people.
FAQS
Q1: What are electoral bonds?
They are special documents that individuals or companies can buy from a government bank to donate to political parties while keeping their identity secret.
Q2: Why were electoral bonds criticized?
They allowed secret donations and removed limits which makes it easier for wealthy individuals and companies to sway political parties.
Q3: What did the Supreme Court say?
The Court stated that the scheme violated the Constitution because it denied the public’s right to know about political donations.
Q4: What is a Money Bill?
A Money Bill is a kind of law that requires approval only from the Lok Sabha not the Rajya Sabha. The Electoral Bonds law was passed this way which many believe was unjust.
Q5: What should be done next?
India needs better laws for political donations that are transparent, fair, and easy for the public to understand.
