• UGI USER
  • Feb 16, 2024
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UNBONDED (THE ELECTORAL BONDS VERDICT IS A BLOW FOR FREEDOM OF EXPRESSION)

Syllabus:

GS 2 : Governance

  • Important Aspects of Governance, Transparency & Accountability and institutional and other measures.

Why in the News?

  • The recent verdict on electoral bonds by the Supreme Court of India marks a significant moment in the realm of political funding and transparency.
  • The decision to strike down the Electoral Bond Scheme (EBS) has far-reaching implications for democracy and governance.
  • This editorial delves into the impact of the verdict on freedom of expression, transparency in political funding, and the broader implications for electoral democracy.

Understanding Electoral Bonds

What are Electoral Bonds?

  • Introduced by the Finance Bill 2017 and notified on January 29, 2018.
  • Allows individuals or entities to purchase bonds from State Bank Of India (SBI) in denominations of Rs 1,000 to Rs 1 crore.
  • Donors can donate bonds to any registered political party while keeping their identity confidential.
  • Bonds are valid for 15 days from the date of issue.
  • Eligibility : Political parties must have secured at least 1% of votes in the last general election to receive electoral bonds.
Source: Quint

Concerns Related to the Electoral Bond Scheme:

Contradiction of Basic Idea:

  • Critics argue that the scheme fails to bring transparency to election funding as intended.
  • Anonymity of electoral bonds benefits the ruling party and undermines transparency.

Possibility of Extortion:

  • Bonds sold via a government-owned bank enable the government to identify donors.
  • This opens the door for potential extortion or victimization of non-supportive donors, favouring the ruling party.

 Blow to Democracy:

  • Amendments exempt political parties from disclosing donations received through electoral bonds.
  • Voters remain unaware of donors and their influence on parties, compromising the democratic process.

 Favouritism towards Rich Corporates:

  • Scheme allows unlimited corporate donations and anonymous financing, benefiting wealthy corporations.
  • Donations enjoy 100% tax exemption, fostering crony capitalism and undermining democratic principles.

Compromising Right to Know:

  • Electoral bond scheme infringes on the right to know, integral to freedom of expression.
  • Amendments to finance acts challenged as unconstitutional and violative of fundamental rights.

 Against Free & Fair Elections:

  • Lack of transparency in electoral bonds allows the government to access donor details.
  • Government leverage over donor information threatens free and fair elections.

 Crony Capitalism:

  • Scheme removes donation limits, enabling well-resourced corporations to influence elections.
  • Facilitates crony capitalism, characterized by close relationships between businesses and government officials.

Why are Electoral Bonds Unconstitutional?

  • Violation of the right to information:
  • Scheme conceals the source of funding from the public, violating Article 19(1)(a).
  • Enables black money, foreign funding, and corporate influence, undermining public interest and national sovereignty.
  • Violation of the principle of equality:
  • Discriminates between political parties based on vote share, favoring ruling and major opposition parties.
  • Excludes smaller and regional parties, creating disparity between donors and voters.
  • Violation of constitutional electoral reforms:
  • Contrary to curbing corruption and criminalization of politics.
  • Conflicts with recommendations for transparency in political funding.
  • In conflict with the Representation of Peoples Act, 1951, requiring disclosure of contributions and expenditure.

About the Supreme Court Verdict: 

  • Upholding Democracy and Transparency
  • The Supreme Court’s decision to strike down the Electoral Bond Scheme is a crucial step towards promoting democracy and transparency in political funding.
  • The court recognized that the scheme violated the Constitution, especially the voters’ right to information.
  • Additionally, the court found the amendment to the Companies Act, which removed the cap on corporate donations without disclosure requirements, to be manifestly arbitrary.
  • Judicial Intervention for Voter Rights and Electoral Purity
  • The verdict is part of a series of judicial interventions aimed at safeguarding voter rights and maintaining the integrity of elections.
  • Previous interventions include introducing the ‘None of the Above’ option on ballots, disclosing candidates’ assets and criminal antecedents, and expediting trials for criminal offenses involving MPs and MLAs.
  • Unexceptionable Reasoning of the Court
  • The court’s reasoning behind striking down the Electoral Bond Scheme is sound and logical.
  • It found that the scheme failed the test of proportionality in curbing the use of ‘black money’ for political funding.
  • The judgement underscores the importance of voters’ access to information about candidates’ backgrounds and extends this principle to corporate donors.

The Problem of Anonymous Donations

  • Anonymous donations, particularly of high value, pose a significant threat to electoral democracy and governance.
  • Such donations often lead to a quid pro quo culture, where donors expect favours from beneficiaries in return for their contributions.
  • The Electoral Bond Scheme (EBS) allowed for the anonymous purchase and donation of electoral bonds to political parties, exacerbating this problem.

Implications and Questions Raised

  • While the verdict may help mitigate the influence of donors on governance through monetary power, questions remain about the validity of the scheme.
  • The delay in deciding the scheme’s validity or staying the issuance of bonds raises concerns about the potential impact of thousands of crores of rupees given to parties.
  • The lack of transparency surrounding the utilization of funds under the scheme highlights the need for interim measures to prevent undue influence in policymaking and electoral campaigns.

Way Forward: 

  • Effective Regulation: Implement robust regulations to govern political financing and prevent corruption.
  • Bold Reforms: Introduce reforms to enhance accountability and transparency in governance.
  • Voter Awareness: Encourage voters to demand awareness campaigns and reject candidates involved in corrupt practices.
  • Strengthen Democracy: By addressing loopholes in laws and promoting transparency, democracy can thrive and serve the interests of the people.

 Conclusion

In conclusion, the Supreme Court’s verdict on electoral bonds is a significant milestone in the quest for transparency and accountability in political funding. By striking down the Electoral Bond Scheme, the court has reaffirmed its commitment to upholding democracy and safeguarding voter rights. However, questions persist about the efficacy of interim measures and the potential impact of anonymous donations on governance and electoral integrity.

Source: 

https://www.thehindu.com/opinion/editorial/unbonded-on-the-striking-down-of-the-electoral-bond-scheme-by-the-supreme-court/article67849827.ece#:~:text=The%20electoral%20bonds%20verdict%20is%20a%20blow%20for%20freedom%20of%20expression&text=Anonymous%20donations%20of%20high%20value,culture%20involving%20donors%20and%20beneficiaries.

Mains Pracitce Question:

Discuss the recent Supreme Court verdict on the Electoral Bond Scheme and its implications for democracy and governance in India.