Unraveling the Electoral Bonds Case: Transparency versus Secrecy in Indian Politics

The Supreme Court delivered a groundbreaking verdict on Today, declaring the electoral bonds scheme as “unconstitutional“. Characterizing the disclosure of funding to political parties as fundamental for making informed electoral decisions, the apex court unequivocally affirmed that the scheme contravenes the Right to Information enshrined in Section 19(1)(a). A verdict was announced by a five-judge Constitution bench headed by Chief Justice DY Chandrachud, accompanied by Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra.

In recent years, the issue of electoral bonds has emerged as a contentious topic in Indian politics, sparking debates on transparency, accountability, and the influence of money in elections. Introduced in 2018, the financial program stipulated that only political parties registered under Section 29A of the Representation of the People Act, 1951, and garnering at least 1% of votes in the preceding Lok Sabha or state legislative assembly elections qualify for electoral bond reception.

The concept of electoral bonds was introduced with the intention of promoting clean and transparent political funding. Under this scheme, individuals and corporate entities can purchase bonds from specified branches of authorized banks and donate them to the political party of their choice. The identity of the donor remains anonymous, ostensibly shielding them from any potential reprisals or pressure.

Proponents of electoral bonds contend that the anonymity provided by the scheme encourages greater participation in the political process and reduces the influence of black money in elections. However, unlike traditional forms of political funding, where contributions are disclosed to the Election Commission and made publicly available, the identity of donors who contribute through electoral bonds remains confidential. This opacity, critics argue, undermines the principles of accountability and openness in the democratic process. In the fiscal year 2022-23, the BJP reportedly garnered close to ₹1300 crore via electoral bonds, a figure approximately seven times higher than the amount received by the Congress through the same means during that time frame.

Political parties play a crucial role in the political process. Knowing about their funding helps voters make informed choices. Economic inequality affects people’s involvement in politics. Access to information can sway policymaking and lead to favors exchanged between parties. The Electoral Bonds scheme violates the right to information under Article 19(a).

 CJI Chandrachud,” said, “The Constitution doesn’t ignore potential misuse; the double proportionality standard must be applied. Clause 7(4) of the scheme favors informational privacy as it provides anonymity to contributors, but no nexus to balancing measures was observed.” CJI : There’s a possibility that contributions above ₹ 20,000 might be mere support, not for favors. The Union of India failed to prove that Clause 7(4) is the least restrictive way to limit the right to information. Amending Section 29(1)(c) of the RPA and IT Act is deemed unconstitutional. The Electoral Bonds scheme is invalidated as unconstitutional.

CJI’s Directives on Electoral Bonds

1. The Electoral Bonds Scheme, along with the provision to Section 29(1)(c) as amended by Section 139 of the Income Tax Act and Section 13(b) as amended by the Finance Act 2015, is found to violate Article 19(1)(a).
2. The issuing bank is instructed to cease the issuance of electoral bonds immediately.
3. The State Bank of India (SBI) is directed to provide details of political parties receiving electoral bonds, including purchase particulars such as date, purchaser name, and denomination, to the Election Commission of India (ECI) by March 6. Additionally, SBI is mandated to disclose details of parties receiving contributions via Electoral Bonds, along with specifics of each encashed bond.
4. By March 13, the ECI is tasked with publishing the provided information on its official website.
5. Electoral Bonds not utilized by political parties are to be returned and refunded to the purchasers.

The Supreme Court’s ruling reflects a commitment to safeguarding the constitutional principles of equality and fairness. By invalidating the electoral bonds scheme, which facilitated anonymous and untraceable donations to political parties, the court has taken a decisive stand against the potential for undue influence and corruption in the political sphere.

By Kashish Jain