On February 15, 2024, the Supreme Court of India delivered a landmark verdict, striking down the Electoral Bonds introduced by the government in 2017. This scheme allowed anonymous donations to political parties through bearer bonds, raising concerns about transparency and potential for undue influence.
The court, in a unanimous decision, ruled that the anonymity offered by electoral bonds violated the fundamental right to information under Article 19(1)(a) of the Constitution. This lack of transparency, they argued, hindered voters’ informed decision-making and could lead to quid pro quo arrangements between donors and recipients. More on the case
How Will It Affect Indian Political Parties?
All political parties will be affected by the ban, as they lose access to anonymous funding. However, the impact is likely to be felt more acutely by parties that heavily relied on such contributions.
While data on exact amounts received by individual parties through electoral bonds is unavailable, the BJP was reportedly the biggest beneficiary, accounting for nearly half of all funds collected since the scheme’s inception. The ban might therefore restrict their access to a sizable funding source.
Origins and Prior System
The concept of electoral bonds was introduced by the BJP government in 2017. Before that, political parties primarily received funds through direct cash donations, donations from individuals and companies, and party membership fees. This system lacked transparency and raised concerns about the influence of money in politics.
The scheme faced opposition from various sections, including the Election Commission of India, civil society groups, and some political parties. They argued that anonymity fostered corruption and undermined electoral democracy. The Communist Party of India (CPI) was a vocal critic of electoral bonds and welcomed the Supreme Court’s decision on February, 15, 2024. They termed it a victory for transparency and democracy.
What’s Next for Political Funding?
The BJP is exploring alternative fundraising methods, such as increased focus on individual donations and membership fees. They may also propose legislative changes to address the court’s concerns and revive the scheme in a modified form.
The ban on electoral bonds will undoubtedly impact party funding for the upcoming Lok Sabha elections. Its full extent remains to be seen, but it could level the playing field somewhat and encourage greater transparency in political financing.