A victory for democratic principles

By striking down the Electoral Bonds scheme as unconstitutional, the Supreme Court has delivered a victory to the people of India on a core principle of electoral democracy — that the voter has the right to, and should, know who is funding political parties and their election machines. All the criticism and apprehensions about the Electoral Bonds scheme that have been voiced have been validated by the Supreme Court, which has comprehensively struck it down in a unanimous five-judge bench verdict. The court has declared the scheme violative of the right to information under Article 19(1)(a) of the Constitution. The arguments advanced by the government in defence of the scheme have all been found untenable by the court. The Narendra Modi government had introduced the Electoral Bonds scheme in the 2017 Union Budget, passing it off as part of the Finance Bill with the claim that it would enhance transparency in political funding. It has since been the instrument through which the ruling BJP has collected the lion’s share of over Rs 13,000 crore donated by companies and rich individuals anonymously. The amendments that were made to the Income Tax Act, the Representation of Peoples Act and the Companies Act to enable the unlimited anonymous donations to political parties, while giving tax exemption to both donor and receiving party, have been held to be unconstitutional.

The lack of transparency was the main criticism about the bonds and the court has now found it valid. In a democracy, people have the right to know who makes contributions to which political parties because parties function in the public realm. They form governments and frame public policy. Even when they are in the Opposition, they represent public opinion and influence policy. The court has recognised this by stating that financial support to political parties can lead to quid pro quo arrangements. People need to know whether the policies and decisions made by governments are in public interest or are linked to donations by private parties to the ruling party. The denial of that information violates the principle of transparency to voters that is key to electoral democracy. This has been raised in public fora, but the government had chosen to remain deaf. The court also dismissed the argument that the scheme helped to curb black money in politics.  

The scheme was also inherently built and designed to give advantage to the ruling BJP over the Opposition in receiving funds. While the government could possibly access information about the donors and donations through the SBI, the Opposition could not. Though the ruling party usually has an advantage in political donations, the heavily lopsided nature of the donations shows the unfair advantage the BJP has enjoyed. The court has directed the SBI to stop issuing Electoral Bonds, and to disclose all details of donations made so far to the Election Commission, which has been directed to publish the same on its website by March 31. It is a historic judgement which affirms the need for transparency and fair play in a democracy. While the judgement may or may not impact the fortunes of political parties in the coming Lok Sabha elections, the moral authority of the Modi government has been brought into question.