The Sentinel
Dipak Kurmi

The labyrinthine nature of Indian elections, involving millions of voters and numerous political parties, places a significant reliance on financial contributions from individuals and corporations.

The labyrinthine nature of Indian elections, involving millions of voters and numerous political parties, places a significant reliance on financial contributions from individuals and corporations. Financing is a critical aspect, and the electoral process often witnesses the circulation of black money. Upon assuming the role of Prime Minister in 2014, Narendra Modi pledged to eradicate the use of illegal funds in politics. In 2017, he introduced Electoral Bonds, purportedly aimed at enhancing transparency in political funding. However, legal challenges ensued, questioning the secrecy clause and alleging violations of fundamental rights. In a recent development, the Supreme Court has ruled against anonymous political donations, potentially posing challenges for political campaigns leading up to the 2024 elections.

In a significant verdict, the Supreme Court declared that “Electoral Bonds” infringe upon citizens’ rights to access government information and contravene Article 19(1)(a) of the Constitution. Chief Justice Chandrachud underscored the crucial role of information about political party funding in enabling effective voter choices, highlighting the significance of open governance. The State Bank of India, owned by the government, has been directed to cease the issuance of these bonds and is obligated to furnish details to the Election Commission of India. This decision, made by a panel of five judges, marks a pivotal development in the legal assessment of electoral financing mechanisms.

The recent development is unfavourable news for numerous political parties, especially the ruling BJP. Beyond the BJP, several other political entities have also reaped benefits from the Electoral Bond system. The judicial scrutiny delved into whether the Electoral Bond scheme violated constitutional norms, hindered voters from accessing crucial information, facilitated covert donations, safeguarded donors’ privacy, and posed a threat to democratic processes. In the past, political parties were obligated to disclose the identities of donors contributing more than 20,000 rupees. However, the introduction of electoral bonds allowed political parties to report receiving funds without divulging the donors’ identities, spanning amounts from 1,000 to 10 million rupees.

Ensuring transparency in political funding is imperative for public awareness. One major critique revolves around the difficulty in tracing the origins of funds when purchasing electoral bonds, creating challenges in identifying the true source of financial contributions. Recent data from the Association for Democratic Reforms (ADR) reveals that between 2017 and 2022, corporations donated a total of Rs 3,299.85 crore. The Bharatiya Janata Party (BJP) emerged as the largest beneficiary, receiving the lion’s share of this amount. Specifically, the BJP received Rs 3,299.85 crore, while the Congress party received Rs 406.45 crore, the Nationalist Congress Party (NCP) received Rs 109.5 crore, the Communist Party of India (Marxist) (CPI-M) received Rs 29.1 crore, and the All India Trinamool Congress (AITC) received Rs 49.7 crore through Electoral Bonds.

According to the report by the Association for Democratic Reforms (ADR), the non-disclosure of information regarding political contributions is deemed unjustifiable. It asserts that taxpayers have a rightful need to be informed about the sources of funding for political parties. The absence of transparency gives rise to concerns regarding accountability. Furthermore, taxpayers’ funds are utilised in the production of bonds, while the State Bank of India (SBI) gains profits from their sales.

Insisting on the right of taxpayers to be informed about the origins of political funding, the argument emphasizes the imperative for increased transparency, casting doubt on the accountability of the process. The utilization of taxpayers’ money in the printing of bonds, coupled with the State Bank of India (SBI) benefiting from their sales, is perceived as inequitable. It is deemed crucial for the public and opposition parties to be acquainted with the source of these donations, despite the government having access to donor details from SBI. Notably, in the parliamentary arena, the government proceeded with the launch of the Electoral Bond Scheme, disregarding cautionary advice from major central agencies and opposition Members of Parliament. The Bonds bill was subsequently passed as a money bill.

The Ministry of Law previously underscored the necessity for the bond scheme to align with the Representation of Peoples Act, 1951, a point that faced opposition from the Election Commission of India (ECI). Despite the registration of 2,858 political parties with the ECI, a minuscule percentage, merely 2.17%, currently holds official recognition.

While certain political parties may abstain from electoral participation, others could potentially engage in money-laundering activities. The 2019 elections witnessed a historic surge as political parties received an unprecedented Rs 2,760.20 crore in anonymous donations through Electoral Bonds, marking the highest amount received during 2017-18 and 2018-19. Over the period from 2017–18 to 2020–21, a total of 19 political parties redeemed Electoral Bonds amounting to approximately Rs 6.5 thousand crore. Notably, the expenditure for the last six Lok Sabha elections surged nearly sixfold, escalating from Rs 9,000 to over Rs 55,000 crore in 2019. From 2018 to March 2022, the Bharatiya Janata Party (BJP) garnered 57% of the total donations, while the Congress Party secured only 10%.

Anticipations are high that the government will respect the verdict of the highest court, a departure from previous instances where such compliance was lacking. With the court having pronounced its judgement, the onus now lies on the authorities to implement and uphold the decision.

The Bharatiya Janata Party (BJP) expresses concerns regarding donor confidentiality and retrospective disclosure, asserting that the court’s directive will not impact their prospects in the forthcoming April-May elections as they strive for a third term for Prime Minister Modi. To mitigate the undue influence of financial contributions in future elections, it becomes imperative to implement regulations governing donations, establish spending limits, explore options for public funding, and enhance disclosure mechanisms. The government is actively considering electoral reforms, and a thorough reconsideration of available reports can guide informed decision-making. Embracing necessary changes is crucial for enhancing the overall efficacy of the election system.

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