Nagpur Stock：Free and Fair Elections after Electoral Bonds

In a historic decision in the case of Association for Democratic Reforms and Anr v Union of India and Ors, the Supreme Court has declared the electoral bonds scheme “unconstitutional and manifestly arbitrary” in a judgment delivered on 15 February 2024. This scheme, which guaranteed complete anonymity to donors of political parties, along with significant legal changes that permitted unlimited donations to political parties, has now been struck down. The five-judge bench, led by the Chief Justice of India, determined that the government’s modifications to key legislative acts, such as the Representation of the People Act, 1951, the Companies Act, 2013, and the Income Tax Act, 1961, infringed upon the constitutional right of voters to be informed about the sources of political financing as guaranteed under Article 19(1)(a) of the Constitution.

The Court’s decision mandated that the State Bank of India (SBI) discloses full information on the electoral bonds bought between 12 April 2019 and 15 February 2024. This included the purchase dates, buyer identities, bond denominations, and specifics of bonds cashed in by political parties, with encashment dates and bond values. The SBI was instructed to furnish these details to the Court by 6 March 2024. However, the SBI sought more time until 30 June 2024 to divulge these details to the Election Commission of India (ECI)Nagpur Stock. This plea for postponement was submitted just two days prior to the original 6 March deadline set by the Court. However, the Supreme Court dismissed the SBI’s plea for an extension and ordered it to provide the details of electoral bonds to the ECI by 12 March 2024. Several civil society organisations and opposition parties have contended that the reason the SBI had sought this extension till June 2024 was to ensure that the murky details of political donations and potential kickbacks are not disclosed to the public before the upcoming general elections, scheduled between April and May 2024.

The functioning of India’s electoral democracy is increasingly characterised by the prominence of money as a tool for seizing and maintaining political power. When a lack of transparency in political financing is widespread, the immediate hurdle for non-ruling parties and forces is to maintain their political viability in an unevenly competitive environment. Under these conditions, the probability of success for any oppositional and genuinely transformative political discourse is significantly diminished, thus violating the principles of free and fair elections.Varanasi Investment

Even before the introduction of the electoral bonds scheme, it could be observed that the funding for political parties was sourced from contributors who preferred to remain anonymous, thus avoiding any form of legal accountability and public scrutiny. The ruling parties, for their part, seem to hide the undisclosed information about whether their governance and policies are influenced by the vested interests of their political donors.

It needs to be pointed out how there has been a stark contrast in the stance taken by civil society organisations and the ruling parties regarding the openness of political financing in IndiaKanpur Investment. Civil society groups have turned to the courts to demand greater clarity in the otherwise opaque realm of political donations. However, following the Supreme Court judgment, data about the extent and source of donations under the electoral bonds scheme, along with indications of potential quid pro quo from the ruling party in favour of certain companies and industrialists, have brought the close link between money and political power into full public viewAhmedabad Stock. It is troubling to note that political parties have participated in elections since 2019 on the back of a financing scheme that has now been declared illegal. Data also show how the bulk of donations under this scheme went to the ruling party, while several parties reportedly received zero donations via electoral bonds. Such discrepancy in anonymised funding showcases the utterly unfair and uneven grounds of political competition in India. However, the critique of the scheme by most of the opposition parties is blunted by the fact that they too have participated in this opaque system and received funding through bonds. If they had followed the lead of the left parties—which were unsurprisingly party to the judicial case—that flatly refused to receive funding through electoral bonds, then their claim to question the ruling party would have had a greater moral force.

The long-drawn judicial case on electoral bonds clearly shows how regulatory bodies, including the ECI, and political parties, especially the ruling party, seem to prioritise the interests of a small class of corporate donors over the concerns of the nearly 97 crore eligible voters in India. For a nation that boasts of being the largest democracy in the world, the alarming extent of the dominance of corporate interests over the procedural aspects of elections and substantive aspects of governance should serve as a wake-up call regarding the condition of the quality of our demo­cracy. If the electoral process is controlled by dhan bal (money power), then that inevitably leads to the diminishing of jan bal (people’s power).

Of course, it would be naïve or duplicitous to suggest that the contradiction between dhan and jan is of recent times; surely, it has always existed at the core of electoral democracies not only in India but worldwide. However, the possibility of the resolution of this contradiction in favour of jan bal has diminished increasingly over the last three–four decades. The clout of money power has effectively foreclosed the possibility of those lacking dhan bal succeeding in the electoral fray, as hinted by the union finance minister a few days ago. This contributes to popular disenchantment with and withdrawal from active party politics and such depoliticisation is inimical to a thriving democracy.

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