In a landmark verdict, the Supreme Court scrapped an opaque, election funding system, calling it “unconstitutional”. Opposition leaders say the apex court’s judgement is a setback for ruling Bharatiya Janata Party, whose government introduced the electoral bonds scheme seven years ago and which battled long and hard in the top court to defend the funding mechanism.
However, a senior political analyst said that the ban on the sale of electoral bonds is unlikely to have any major impact on the funding of political parties.
BJP itself has insisted that the court order will not affect its chances in the coming elections in which Modi is aiming to secure a third straight term in office.
Electoral bonds, introduced in 2017, allowed individuals and companies to donate money to political parties anonymously and without any limits. A five-judge bench, headed by Chief Justice D Y Chandrachud, observed that the “political contributions give a seat at the table to the contributor” and that “this access also translates into influence over policymaking”.
The top court described the scheme as ‘unconstitutional’. It also directed the state-run State Bank of India (SBI) to halt issuing the bonds, furnish identity details of those who bought them, and provide information about bonds redeemed by each political party. The information will be made public on the website of the Election Commission of India. The SBI is the only organisation authorised to issue the bonds under the scheme.
The release of that information, because of the court order, could give nearly one billion Indian voters their first look at the donors who secretly shelled out billions of dollars to political parties since 2017, and open up scrutiny of the potential benefits they secured in return.
“This judgement essentially upheld the need for transparency in the funding of political parties and reinforced that people’s right to know in a democracy overrides any anonymity,” Anjali Bhardwaj, co-convener of the National Campaign for People’s Right to Information said.
In all, the SBI has sold electoral bonds worth $20.3bn, including the latest tranche in January this year. The BJP received nearly 55 percent of these total donations.
“The ruling party has received huge amounts of money which it used in the last national election in 2019. It has been a travesty of the parliamentary democracy that has been corporatized in India by anonymous donations,” said Brinda Karat, a senior leader of the Communist Party of India (Marxist), said.
The left-wing party, currently in power in the southern Indian state of Kerala, was among petitioners before the Supreme Court who had demanded that electoral bonds be declared illegal. It was also the only major party to formally decide that it would not accept any donations through these bonds.
Pramod Tiwari, a Congress party MP and the deputy leader of the opposition in the upper house of India’s parliament, described the court verdict as a milestone moment for the country.
Ravi Shankar Prasad, a BJP leader and MP, took a swipe at opposition claims that electoral bonds were responsible for giving the party a dramatic edge over its rivals.
“As for a level playing field, the question is whether you are in the field or outside it. People decide whether you are in the field,” he said.
In all, political parties spent $8.7bn on India’s last national election in 2019, according to the New Delhi-based Centre for Media Studies, and analysts expect 2024 to eclipse that figure comfortably.
The timing of the judgement at least prevents the parties from accepting bonds in another tranche before the national election, Batra added. “The political parties need to become more transparent about funding and uphold internal democracy.”
Venkatesh Nayak, the director of the Commonwealth Human Rights Initiative, said his organisation’s research found that after the introduction of electoral bonds, opaque donations became more and more prevalent. Now, he said, institutions like India’s central bank, the Reserve Bank of India (RBI), and the Election Commission of India (ECI) “need to stand up to the occasion”.
Both the RBI and the ECI had initially expressed reservations about the electoral bonds scheme but had then, in effect, accepted it.
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