Authored by Ms. Shruti Singh, Assistant Professor of Political Science, Kalinga University and Faculty Editor at The Society For Constitutional Law Discussion.
Introduction
In recent years, electoral funding has become a topic of significant discussion and debate in India. A key mechanism introduced to address transparency and accountability in electoral funding is the electoral bond system. Introduced in 2017, electoral bonds were hailed as a major reform to bring transparency to political funding[1]. However, the implementation and impact of electoral bonds have been subject to scrutiny and criticism. Some critics of the bonds have even termed the bonds as a constitutional challenge by actively calling out the lack of transparency and accountability in political donations[2].
Understanding Electoral Bonds
Electoral bonds essentially are a form of promissory note which can be purchased by individuals and organizations from authorized banks. These bonds can then be donated to political parties of such individual’s preference. A key feature of electoral bonds is the anonymity the donors are provided with, as the identity of the donor is divulged neither to the public nor the receiving political party. According to provisions of the Electoral Bond Scheme[3] of 2018, such bonds could be purchased by anyone categorized as a citizen of India, either alone or in collaboration with other individuals.
The Intended Purpose of Electoral Bonds
The primary objective behind introducing the electoral bonds was to bring about transparency and accountability in political funding. It was argued that by allowing donations through banking channels, the system would become more transparent, reducing the black money usage in political funding. Moreover, the anonymity provided by electoral bonds was viewed as a way to protect donors from potential backlash or reprisals. Supporters of the electoral bonds scheme have gone as far out to appreciate the confidentiality provided to citizens to vote with their money, discreetly so a free exercise of political preferences could be secured without the fear of harassment, threats, ostracization or denials of licenses or permissions merely on the basis of said political preference[4].
The Real Picture: Criticisms and Concerns
Despite the intended purpose, the electoral bonds have faced criticism on several fronts. One major concern is the lack of transparency in the system. Since the donors’ identity is not disclosed, there is no way for either the general public or even the regulatory authorities to know who is funding political parties. This raises questions about the indelible influence of corporate entities and wealthy individuals on the political process.[5]
Another criticism is that electoral bonds have not succeeded in curbing the black money usage in political funding. Critics argue that since the donors’ identity is not publicly disclosed, there is no way to ensure that the funds being donated are legitimate owing to the lack of transparency in the process of donating. Moreover, the lack of disclosure requirements for political parties further exacerbates this issue.
Furthermore, there are concerns about the effect of electoral bonds on political accountability. Since the identity of donors is not disclosed, there is zero to no accountability for political parties to their donors or the public. This raises questions about the influence of donors on policy decisions and the overall democratic process.
The Legal Battle Over Electoral Bonds
The scheme of electoral bonds has also been challenged in the courts. In 2019, the Supreme Court of India heard a petition challenging the legality of electoral bonds. The petitioners argued that electoral bonds violate the principles of transparency and accountability in electoral funding. However, the Supreme Court upheld the validity of electoral bonds, stating that they were a legitimate tool to bring transparency to political funding. However, the Supreme Court overruled its previous stance in its February judgment[6] this year, when the bench struck down the Electoral Bonds Scheme as unconstitutional by declaring how holding anonymous electoral bonds held the potential to violate the Fundamental Right to Information, of citizens, as under the Article 19(1)[7] of the Constitution of India.
Conclusion
In conclusion, while electoral bonds were brought about with the intention of ushering transparency and accountability to political funding, their implementation has been marred by criticisms and concerns. The lack of transparency in the system, coupled with concerns about the prominent influence of corporate entities and wealthy individuals, raises questions about the impact of electoral bonds on the democratic process. Moving forward, it is essential to address these concerns and ensure that electoral funding is transparent and accountable to the public. Therefore the Supreme Court decision in this regard is indeed laudable because it exemplifies its commitment to not merely uphold constitutional sovereignty but also protect the citizens’ fundamental right to information strengthening the transparency and accountability a viable democracy stands for.
References
Narayan, V. A., & Sindhu, J. (2020). A Case for Judicial Review of Legislative Process in India? Verfassung Und Recht in Übersee / Law and Politics in Africa, Asia and Latin America, 53(4), 358–410. https://www.jstor.org/stable/27284023
Ministry of Finance, Government of India (2017), Introduction of the Electoral Bond Scheme. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://dea.gov.in/sites/default/files/Electoral%20Bonds_Press%20RELEASE_2-1-2018.pdf
Ministry of Finance, Government of India (2018). Electoral Bond Scheme 2018. Press Information Bureau. https://pib.gov.in/Pressreleaseshare.aspx?PRID=1571421
Rai, S., & Burman, A. (2023). Analyzing the Benefits of Electoral Bonds| John Rawls on a Fair Society. Carnegie India. https://carnegieindia.org/2023/11/17/analyzing-benefits-of-electoral-bonds-%7C-john-rawls-on-fair-society-pub-91044
Sahoo, N. (2019). How Electoral Bonds Distort India’s Democracy. Observer Research Foundation. https://www.orfonline.org/expert-speak/how-electoral-bonds-distorts-indias-democracy-49344
ADR v/s Union of India & Ors., No. 880 of 2017. https://main.sci.gov.in/supremecourt/2017/27935/27935_2017_1_1501_50573_Judgement_15-Feb-2024.pdf
India. (1950) The Constitution Of India.
This post was originally published on Kalinga+.