Power Play: Unveiling the Secrets of Electoral Bonds

Electoral bonds were introduced in the political system of India in 2018 by the government as a means to promote transparency and accountability in political funding. The aim was to replace cash donations with a more traceable and accountable system, thereby reducing the influence of black money in elections. However, concerns have been raised about the timing of their introduction, just before major elections, which has led to questions about the government's intentions and potential manipulation of the system for political gains. The government amended four Acts to implement the Electoral Bond Scheme via the Finance Acts of 2016 and 2017. These acts include the Representation of the People Act of 1951 (RPA), the Companies Act of 2013, the Income Tax Act of 1961, and the Foreign Contributions Regulation Act of 2010 (FCRA), implemented by the Finance Acts of 2016 and 2017. Prior to this system, political parties were required to make all donations of more than Rs 20,000 public. Furthermore, no corporate entity was permitted to make donations over 7.5% of its total profit or 10% of revenue. The BJP government has bent the law for their unlawful, corrupt, and illicit activities.

The purpose of electoral bonds is to bring about transparency in political funding by eliminating the use of cash donations. By channeling political contributions through authorized banks, the government aims to ensure that the source of funds can be traced and accounted for, thereby reducing the influence of black money in elections. Additionally, electoral bonds provide a legal and accountable means for individuals and organizations to support their preferred political parties. Some proponents argue that electoral bonds have the potential to bring transparency to political funding by ensuring that contributions are traceable and accounted for. They believe that this system could help curb the influence of black money in elections, ultimately leading to a more fair and democratic process. However, the effectiveness of electoral bonds in achieving these goals are questionable because of the concerns about loopholes and potential misuse of the system. 

Electoral bonds have been criticized for potentially favoring the ruling party in elections. This is because there is no cap on the amount of money that can be donated through electoral bonds, allowing wealthy individuals and corporations to exert disproportionate influence on the political process potentially. This could create an uneven playing field and undermine the principle of equal representation in a democracy. Additionally, there are concerns that the ruling party may have more access to information about who is donating through electoral bonds, giving them an advantage in targeting their campaign efforts. In 2022–2023 the ruling BJP received about ₹1,300 crore through electoral bonds, seven times more than the Indian National Congress received through the same mechanism. In the 2022–23 fiscal year, the BJP received ₹2120 crore in total donations, with electoral bonds accounting for 61% of the total, according to the party's annual audited report filed with the Election Commission. Let’s not forget the elephant in the room: transparency- or rather the lack, thereof. Electoral bonds shroud the source of funds in secrecy. Who is pulling the strings behind the scenes? Your guess is as good as mine! 

On February 15, the Supreme Court issued its much-awaited decision in the electoral bonds case, ruling that anonymous electoral bonds violate the right to information under Article 19(1)(a) of the Constitution of India. As a result, the scheme was found unconstitutional. The petitioners, including the ADR, the Communist Party of India, and INC leader Jaya Thakur, argue that the anonymity of electoral bonds undermines transparency in political funding and encroaches upon voters' right to information. They also claim that the scheme facilitates contributions through shell companies, raising concerns about accountability and integrity in electoral finance. The court also questioned the rationale behind the scheme's selective anonymity and the potential to institutionalize kickbacks for political parties. The bench ordered the Election Commission of India to provide details of political party contributions via electoral bonds up to September 30.

In conclusion, the Supreme Court’s decision on February 15 represents a significant victory for the Indian National Congress and its allies in the fight for transparency and accountability in political financing.

-Aditya Alia