Supreme Court strikes down Electoral Bonds Scheme!

Supreme Court strikes down Electoral Bonds Scheme: ‘unconstitutional’ ‘undemocratic’

KAKALI DAS

The Supreme Court has struck down electoral bonds, effectively declaring them “unconstitutional”, “undemocratic” – as they infringe upon the citizen’s Right To Know. It’s important to recall that the Right to Information is enshrined as a fundamental right in our legal framework.

If you’re familiar with Indian affairs, you’re likely aware of this longstanding issue. Opposition parties expressed discontent with electoral bonds, while the government staunchly defended them, citing them as a positive step forward.

The Supreme Court resolved the issue, with a bench of five judges unanimously striking down the electoral bonds.

“The Electoral Bonds scheme violates Freedom of Speech and Expression under Article 19(1) (a) of the Constitution.” – Chief Justice, DY Chandrachud

Supreme Court strikes down Electoral Bonds Scheme: ‘unconstitutional’ ‘undemocratic’

What are Electoral Bonds?

Electoral Bonds are a concept introduced in the 2017 budget. The government aimed to address the lack of transparency in political funding, citing concerns about the influx of black money. As a solution, they introduced these bonds.

Here’s how it worked: If you wanted to donate to a political party, you could visit any branch of the State Bank of India (SBI), which has numerous branches nationwide. The bank would sell you these bonds, available in various denominations ranging from ₹1,000 to ₹10,00,00,000. You could purchase as many bonds as you desired, and your personal details wouldn’t appear on them.

Essentially, the donations were anonymous. Companies could also purchase electoral bonds, following the same principle of complete anonymity in donations. After purchase, the amount was deposited into the party’s account. If not encashed within 15 days, the money would be directed to a relief fund. That’s the basic operation of the bonds.

How much did they raise?

Since 2018, they have raised almost ₹16,000 crore rupees, roughly equivalent to $1.9 billion dollars. Out of this sum, the ruling BJP received 60% of the funds, while the main opposition Congress party received 10%.

Why were opposition parties against it?

Opposition parties opposed electoral bonds for two main reasons: A) The absence of donation limits allowed companies to contribute unlimited amounts, which many parties found concerning. B) They raised concerns about the involvement of the State Bank of India (SBI), a state-run bank, suggesting that the ruling party could potentially access donor information. This could lead to policy-making influenced by donor identities or provide concessions to top donors.

Why did the court strike it down?

The court struck down electoral bonds because petition claim that they violated a fundamental right in India: the right to information. Voters lacked transparency regarding who donated to which party and in what amount, which petitioners deemed a violation.

However, the government rejected these claims. Their case revolved around two primary arguments: 1) Electoral bonds could potentially curb black money, justifying a restriction on the right to information, and 2) protecting donor privacy, as individuals or companies may prefer to remain anonymous in their political contributions. However, the courts dismissed these arguments by the government stating that the bonds infringed upon the right to information, leading to their annulment.

Chief Justice DY Chandrachud highlighted that financial contributions to political parties serve either to support the party or to reap benefits upon assuming power. This implies that individuals or entities supporting a party expect favourable decisions and laws in return for their financial support. Therefore, as citizens, it’s crucial for us to be aware of who is financing our political parties in order to make informed decisions.

What happens next?

Following the court’s orders, the State Bank of India and the Election Commission must take action. The bank is required to provide donor details to the poll body, including the date of bond purchase, buyer names, amounts, and the respective allocations to political parties. Subsequently, the Election Commission will publish all this information.

This must be accomplished before the 13^th of March, which is the deadline set by the Supreme Court. So, there’s less than a month remaining for these directives to be fulfilled.

The timing of this verdict is crucial, especially with general elections scheduled for this summer and the peak donation season underway. With electoral bonds invalidated, political funding will revert to previous methods: all donations exceeding ₹20,000 must be declared. Additionally, the donation cap is reinstated, allowing companies to contribute up to 7.5% of their average profits, but no more than that.

How does this compare to donation rules elsewhere in the world?

Donation regulations vary from country to country. In the UK, while there are limits on individual contributions to candidates, there are no limits on donations to political parties, and these contributions do not have to be declared.

In the US, individuals can contribute up to $3,300 to a candidate and $41,300 to a party. Additionally, there are “super PACs,” political action committees that function as independent campaign funds. These super PACs allow unlimited donations, which are then used to support campaigns indirectly, such as funding attack ads against rival candidates.

In Germany, donation regulations are more stringent. Individuals can only donate to political parties, not to candidates directly. Additionally, any contribution exceeding $12,000 must be disclosed.

Certainly, the unfolding Electoral Bonds saga appears far from over. With the Supreme Court set to delve into the matter within the next three weeks, it’s akin to opening a Pandora’s box full of Worms. We can anticipate a deluge of revelations that may implicate numerous individuals and political entities.

It’s highly probable that these influential figures will exert considerable effort to prevent the box from being opened and to keep the information under wraps.

16-02-2024

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