INTRODUCTION
The Electoral Bonds were brought into the parliament as a money bill and as a component of the Union Budget in 2017. The aim of bringing this bill was to cleanse the system of political funding in the country.[1] With the help of this bill government tried to keep a tab on the usage of black money for election funds by restricting the cash donations to the parties and through electoral bonds tried to bring all the money into the system hence ensuring the usage of white money. Under this scheme, the bonds were meant to be issued by the State Bank of India and these were considered confidential as “who donated what to whom” can never reach the ears of the general public and even the political parties to whom money is donated.[2] Electoral bonds came with their particular procedure and various salient features and with the aim of cleansing and digitalizing the system, but have into many controversies due to its certain features and functions.
ISSUES WITH THE SCHEME
The primary reason for backlash on the Electoral Bonds Scheme was that it reduced the transparency in the system. Due to anonymous donations only the donor knows how much money he is giving to which political party, and the general public and political parties remain unaware of this information. This also leads to the infringement of the Right to information which is a fundamental right under Article 19 (1) (a) of the Indian Constitution[3]. This even affects the basic notions of democracy as people who voted for the individuals or parties, just got kicked out of the notion of knowing about, for whom their representatives are working, are they still representing the ideas of citizens whom they represent or are they working for big companies ignoring the concerns of the citizens.
The amendments in the Companies Act acted as a cherry on top and worsened the situation even more. Earlier the cap of the amount that can be donated to the political parties by companies was around 7.5% of the average profits of the last 3 years but the new amendment replaced this by permitting unlimited political by companies to political parties irrespective of profits or losses. This might severely affect the decision-making capacity of the government as the relationship between the big industrialists/capitalists and government officials might lead to biased decisions favouring the donors. If this situation persists citizens will be the only recipients of suffering and loss. This also brings the shell companies into the picture which might have the capability of causing irreparable damage to the system. Even the prior condition for companies to disclose in profit and loss account about the political parties to whom they made contributions, was eliminated. This acted as a stone thrown at the transparent shield of the system. The Finance Act, of 2017 even amended the provision for parties and prevented them from specifying contributions that are higher than twenty thousand if it is received by electoral bonds, which was earlier mandated to them.
Another alarming issue was that only the State Bank of India had the power to issue electoral bonds and it being a government bank can lead to leakage of information to the ruling government about the funded amount and sources (who funded it) of all other parties, especially opposition. These might be even farfetched to bias towards companies funding the ruling party and victimization of funders of other parties. This might give humongous but unacceptable leverage to the party that is ruling which can even have a worse impact on the elections disturbing its essence of freeness and fairness.
HONOURABLE SUPREME COURT’S DECISION AND ITS ANALYSIS
After the introduction of this Scheme under the Finance Bill in 2017 it was challenged by an NGO (Association for democratic reforms) in the same year before the Honourable Supreme Court. The case of Association of Democratic Reforms & Anr. V. Union of India[4] was recently heard by 5 five-judge constitution benches with honourable CJI DY Chandrachud, Justice Sanjiv Khanna, Justice BR Gavai, Justice Manoj Mishra, and Justice JB Pardiwala. The honourable court in its verdict found the scheme as an infringement of a fundamental right under Article 19 which is not only restricted to freedom to speak but to know as well. The honourable court found out the difference between the contributions of corporations/companies and common people is quite significant in monetary value (one contributes in huge amount and another in less) as well as in the intent (one seeks to influence politics and another to genuine political support) behind these contributions. Even the honourable court concluded the amendments in the Companies Act as quite arbitrary and authorized the unrestricted influence of giant corporations in the political system. The decision of the honourable 5-judge bench in declaring the Electoral Bonds Scheme unconstitutional can be seen as a correct example of “Justice delayed, but delivered aptly”. Although the decision on the electoral bonds came after 7-8 years it ensured the significance of the judiciary in protecting the citizen’s rights and the role of the judiciary in keeping a check on the legislature and its actions. The main emphasis of the honourable bench, in this case, could be seen as protecting the democracy of the country and ensuring the political and governance system is free from any sort of influence, especially monetary. The honourable court in this case aptly ensured that any type of legislative decisions, schemes, or amendments should not create a way for legalizing what’s wrong. Hence, the decision although came after a lot of waiting but still ensured the citizen’s belief in the judiciary system was intact.
CONCLUSION
The Electoral Bonds Scheme was brought in as a tool to ensure transparency in the system but it turned out to be the stone harming the transparency. Whether the scheme was intentional or just left too many loopholes open, is the question for the critics and supporters for their assumptions, but the thing which is for sure true is that it was an ineffective policy harming the democratic framework of the country irrespective of it being intentional or unintentional. And Supreme Court by declaring the scheme unconstitutional has uplifted the idea of checks and balances among the three organs of the government in the country. In the end, the electoral bonds scheme is buried in history as unconstitutional.
Author(s) Name : Navanshu Pawar (Christ (Deemed to be University), Bangalore)
Reference(s):
[1]Government of India, Ministry of Finance, Introduction of the scheme of electoral bonds, (2018)
[2] Minakshi Sharma, “Electoral Bonds” (2020) <https://loksabhadocs.nic.in/Refinput/New_Reference_Notes/English/27072020_141527_102120474.pdf> accessed 26 March 2024
[3] Constitution of India, 1949 (Ind)
[4]Association of Democratic Reforms & Anr. V. Union of India, 15February 2024
