GS Paper 2
Syllabus: Electoral Funding
Context: The Supreme Court struck down the electoral bonds scheme as unconstitutional, relying on several grounds in its verdict.
What is an Electoral Bond?
The rationale behind the Electoral Bonds Scheme (as per the Government)
- Transparency in political funding.
- Reduced chances of misuse.
- Protection of anonymity for donors.
- Political accountability through submission of details to the Election Commission.
- Reduction of black money in political funding.
Issues Highlighted by SC Against the Electoral Bond Scheme of the government:
| Issues | Justification |
| Violation of Right to Information under Article 19(1)(a) | SC asserted that transparency regarding funding to political parties is crucial for informed electoral decisions, affirming that the scheme infringes upon the right to information as enshrined in Article 19(1)(a)
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| The scheme is also contrary to the recommendations of various committees and commissions that have called for more transparency and disclosure in political funding. | |
| The scheme is also in conflict with the Representation of Peoples Act, 1951, which requires the political parties to disclose their contributions and expenditures. | |
| Lack of proportionality between scheme objectives and restrictions imposed | The restrictions imposed by the electoral bond scheme on the right to information are disproportionate to the objectives of curbing black money in electoral financing and protecting donor privacy. |
| Failure to adopt the least restrictive method to curb black money | The scheme does not represent the least restrictive method for achieving the objective of curbing black money in electoral financing, as there are other less restrictive alternatives available. |
| Infringement on the right to donor privacy | The scheme infringes upon the right to donor privacy by not adequately protecting the anonymity of donors and exposing them to potential harassment or discrimination based on their political affiliations. |
| Concerns over unlimited political contributions by companies | Allowing unlimited political contributions by companies enhances their influence over the political process, potentially leading to preferential treatment and undermining the democratic principles of equality and fairness. |
| Violates Principles of Equality | The electoral bond scheme violates principles of equality by favouring certain political parties, creating disparities between donors and voters, and undermining transparency. |
The Supreme Court also mandated the SBI to disclose details of electoral bonds to the ECI for transparency by March 31, 2024.
Impact of the judgement:
The Supreme Court’s landmark verdict on electoral bonds upholds constitutional rights and values, striking down the scheme as unconstitutional. The judgment will enhance transparency and accountability in political funding, reducing the influence of money and corporate power in politics. It will level the playing field for all political parties, ensuring fair competition and offering genuine choices to voters.
Way forward:
- Implement partial state funding for political parties (Indrajit Gupta Committee)
- Consider a National Electoral Fund (where donors contribute anonymously, and funds are allocated to parties based on their vote share)
- Cap anonymous donations at Rs. 20 crores or 20% of total funding (Law Commission recommendation)
- Enforce a complete ban on cash donations.
- Strengthen auditing of party accounts (Venkatachaliah Committee Report (2002))
- Learn from global best practices, like banning corporate funding (e.g. Brazil and Chile banned corporate donations following corruption scandals associated with corporate funding.)
Mains Links:
Discuss the role of the Election Commission of India in the light of the evolution of the Model Code of Conduct. (UPSC 2022) (10 MARKS)
