What is the Electoral Bonds Issue?

Electoral bonds in India have been a subject of intense debate and scrutiny. Introduced in 2017 through the Finance Act, electoral bonds were designed as financial instruments for individuals and corporations to donate to political parties anonymously. The government argued that this system would help curb the flow of black money into political funding by ensuring that all donations were made through the banking system, with the State Bank of India (SBI) as the sole authorized bank to issue these bonds.

However, the anonymity provided to donors raised concerns about transparency and accountability in political funding. Critics argued that without disclosure of donor identities, there could be no way to ascertain if policy decisions were being influenced by big donors. This lack of transparency was seen as a potential threat to the democratic process, as citizens would not have access to information about who was funding political parties and potentially influencing policy-making.

The Supreme Court of India, in a landmark judgment, struck down the electoral bonds scheme as unconstitutional. The Court held that the scheme violated the right to information of citizens, impacting free speech and expression under Article 19 (1) (a) of the Constitution. The Court emphasized that transparency in political funding cannot be achieved by granting absolute exemptions and that information about the funding of political parties is essential for the effective exercise of the choice of voting.

The apex court’s decision was based on several key points:

1. The electoral bonds scheme was violative of the right to information, which is fundamental to free speech and expression.
2. The scheme aided the political party in power, as it allowed for anonymous donations that could not be scrutinized.
3. The amendments made to the Income Tax Act and the Representation of People Act, which had made the donations anonymous, were quashed.
4. The State Bank of India was ordered to stop the issuance of electoral bonds forthwith.
5. The SBI was also directed to furnish details of donations through electoral bonds and the details of the political parties which received the contributions to the Election Commission by March 6, 2024.

The Court’s directive to the Election Commission of India (ECI) to make the information public by March 15, 2024, was a significant step towards ensuring transparency in political funding. The ECI was instructed to publish the details of the political parties that received electoral bonds since 2019 on its official website.

The recent developments, where the Supreme Court reprimanded SBI for not sharing donor names through electoral bonds with the ECI by the deadline, further highlight the judiciary’s tough stand on the issue. The Court rejected SBI’s extension plea and ordered the details to be disclosed by March 12, 2024, warning of contempt if not complied with.

In conclusion, the electoral bonds issue in India has brought to the forefront the need for transparency in political funding. The Supreme Court’s judgment is a testament to the importance of upholding the democratic values of accountability and the right to information. As the country moves forward, it will be crucial to establish systems that ensure that political funding does not become a means to unduly influence policy-making, thereby strengthening the foundations of democracy.