Foreign Policy
Sumit Ganguly

A recent ruling on campaign finance reflected a judicial independence that will be key to checking Modi’s power if he wins a third term.

In 2018, a year ahead of India’s last national election, the ruling Bharatiya Janata Party (BJP) rolled out a system of so-called electoral bonds—financial instruments that individuals or corporations could purchase in fixed amounts through the State Bank of India and contribute anonymously to a political party to fund its election campaign. Previously, individuals and corporations were required to make donations over a certain amount public.

At the time, the BJP government explained that the bonds scheme would enable both citizens and companies to help finance the electoral process with “clean money.” India’s elections have become prohibitively expensive because of the country’s sheer size, the scale of campaign events, and an increasing reliance on digital means to promote party platforms. India’s 2019 election expenditure was more than $8 billion. This year’s election, which began on April 19 and runs for six weeks, could cost more than $14.4 billion, around the same amount as the 2020 U.S. elections.

The financing for future Indian elections will now look different. In a landmark judgment in February, the Indian Supreme Court weighed in and unanimously struck down the electoral bonds system on the grounds that it violated Indian citizens’ right to information, and the State Bank of India was ordered to cease issuing further bonds. Petitioners including the Association for Democratic Reforms, represented by noted activist lawyer Prashant Bhushan, and the Communist Party of India (Marxist) lodged the case against the government.

The verdict was stunning for a few reasons. It showed that the Indian Supreme Court still retains some independence, even as it has come under growing criticism for its apparent tendency to kowtow to Prime Minister Narendra Modi’s government. It also brought to light just how much prominent conglomerates chose to fund the BJP through the bonds scheme—as well as revealing that a number of companies invested in the bonds were facing scrutiny from federal and state investigative agencies.

Although the Supreme Court judgment likely came too late to affect this year’s election, with much of the funding from the bonds already spent, terminating the electoral bonds system may contribute toward cleaning up India’s campaign finance process. Nevertheless, with the vote now underway, two significant questions linger. Assuming the BJP returns to office as expected, will the government resurrect the electoral bonds system with some transparency? And more broadly, will the Indian Supreme Court maintain the independence it displayed in this case?

At first, the Supreme Court decision seemed like a setback for the ruling BJP, which was by far the largest recipient of the electoral bonds—and thus lost access to some funding on the eve of the election. After the judgment, the court continued to push the State Bank of India to release information related to the details of the donors and the unique alphanumeric codes that linked these donors with beneficiaries. The data ultimately revealed that the BJP’s top 10 donors contributed as much as 35 percent of its total intake of electoral funds. Although there is little question that the Supreme Court deserves credit for the verdict, it is worth noting that the late timing of the judgment meant that it had little or no practical impact on this year’s campaign.

However, the subsequent court-ordered disclosures shed light on the murkiness of the electoral bonds scheme. A host of prominent conglomerates purchased bonds, suggesting an opaque effort to curry favor with both the BJP at the national level and regional parties at the state level. Several companies facing possible investigations into their financial practices were major donors, suggesting they may have sought to avoid further scrutiny under the BJP government, which has weaponized India’s investigative agencies. Opposition parties, political dissidents, and private companies alike have found themselves under the scanner of the country’s tax enforcement authorities.

The verdict’s significance goes beyond campaign financing and this year’s election. It gives hope to many activists in India who have grown concerned about the independence of India’s top court. Historically, the Supreme Court had a reputation for its prickly autonomy. It also became known for innovative if controversial judicial reforms, including the radical provision of public interest litigation, which enabled any Indian citizen to approach the bench via handwritten letter on behalf of the public interest, including in cases in which they were not directly involved; the Supreme Court then had the right to intervene if applicable—as with the electoral bonds case.

Still, in recent years, the Indian Supreme Court lost some of its sheen. In 2020, former Chief Justice of India Ranjan Gogoi, who was widely seen as sympathetic to the first BJP government under Modi, was nominated as a member of the upper house of India’s parliament shortly after his retirement from the bench. The unusual appointment raised serious questions about the court’s independence. Last year, former Supreme Court Justice S. Abdul Nazeer, who delivered the verdict in a case involving the land on which the controversial Ram temple now stands, was appointed governor of the Indian state of Andhra Pradesh.

The current chief justice of India, D.Y. Chandrachud, assumed office in 2022. Legal experts have construed a few judgments that have come under his watch as dubious. First, the court upheld the 2019 repeal of Article 370 of the Indian Constitution, which had long conferred special autonomous status on the Muslim-majority, Indian-administered region of Jammu and Kashmir. This, combined with a previous court judgment to allow the construction of the Ram Mandir on the grounds of the destroyed Babri mosque in Ayodhya to go ahead, left many of India’s 200 million Muslims bereft. Both decisions, based on questionable legal premises, have bolstered the BJP’s nationalist project.

Then, last October, the Supreme Court denied a petition to permit same-sex marriage in India, instead giving in to the government’s plea to set up a committee to examine the subject of granting same-sex couples rights available to heterosexual couples. Yet again, the decision left many Indians disappointed and showed deference to the social sentiments of the conservative government. The decision played into the hands of the BJP, strengthening its stance on what it deems to be traditional Hindu values under assault from liberal notions of modernity.

Given its recent record of largely siding with the BJP government on politically fraught issues, the Supreme Court’s decision on the electoral bonds scheme is momentous, even as it leaves legal experts guessing about the court’s motivations. A single judgment that undermines the ruling party will not immediately restore faith in the Supreme Court’s independence, but the willingness of the court to grasp this nettle on the eve of the national election suggests that it may still be willing to fight for the cherished democratic principle of judicial autonomy.

Other important judgments on the horizon will bear watching. Among other matters, the court is expected to rule on the politically fraught status of the Gyanvapi mosque in Varanasi; the powers of the Enforcement Directorate, a key financial crimes investigative agency; and the religious freedom of women. If the current BJP government does return to power as expected, maintaining the autonomy of the Supreme Court will be of signal importance in checking the possible arbitrary use of power during Modi’s third term.

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