The Supreme Court’s recent decision to strike down the electoral bonds scheme marks a significant development in India’s electoral landscape, with far-reaching implications for political funding and transparency. The ruling, delivered by a constitutional bench comprising Chief Justice DY Chandrachud and other justices, underscores the court’s commitment to upholding democratic principles and protecting citizens’ rights.
The electoral bonds scheme, introduced in the 2017 Union Budget by then-Finance Minister Arun Jaitley, was intended to reform political funding by providing a transparent and legitimate mechanism for donations to political parties. However, since its inception, the scheme has been subject to scrutiny and criticism, particularly regarding its lack of transparency and potential for misuse.
The court’s decision to strike down the electoral bonds scheme stems from its finding that several associated amendments to key laws, including the Representation of the People Act, Income Tax Act, and Companies Act, are unconstitutional. The court held that these amendments violated citizens’ right to information under Article 19(1)(a) of the Constitution, as they enabled anonymous contributions to political parties, thereby undermining transparency and accountability in the electoral process.
One of the key provisions challenged in the electoral bonds scheme was the anonymity of donors, which critics argued facilitated unchecked corporate influence in politics and opened the door to quid pro quo arrangements. The court concurred with these concerns, noting that the scheme failed to address the risk of corruption and undue influence posed by anonymous donations.
Furthermore, the court found that the government’s assertion that electoral bonds were necessary to tackle black money in politics was not justified. While the government argued that electoral bonds would help curb illicit cash donations to political parties, the court emphasized that there are other effective mechanisms available for curbing black money, and that the goal of combating corruption did not justify infringing on citizens’ right to information.
In its unanimous decision, the court directed the State Bank of India, the sole issuer of electoral bonds, to cease issuing bonds and submit details of all bonds purchased since April 12, 2019, to the Election Commission of India (ECI). This directive aims to ensure transparency and accountability by providing the ECI with information on the purchasers of electoral bonds, including the date of purchase, name of the purchaser, and denomination of the bond.
Moreover, the court ordered that electoral bonds within the validity period but not yet encashed by political parties must be returned to the purchaser, with the issuing bank refunding the amount. This measure seeks to prevent political parties from benefiting from anonymous donations and reinforces the principle of transparency in political funding.
The court’s ruling is expected to have significant implications for political parties, particularly with general elections on the horizon. It underscores the importance of transparency and accountability in political funding and sends a clear message that the rights of citizens cannot be compromised in the pursuit of electoral reforms.
In response to the court’s decision, legal experts have noted that while there are no direct legal consequences for political parties regarding previously encashed electoral bonds, valid bonds that have not been encashed must be promptly returned. Additionally, the ruling does not bar political funding altogether but rather eliminates anonymity under the electoral bond scheme, allowing for greater transparency and accountability.
Looking ahead, the government may explore legal avenues for redressal, such as review or curative petitions, or consider introducing new legislation that aligns with the principles outlined in the court’s decision. However, it is essential that any future reforms prioritize transparency and uphold the integrity of India’s electoral process.
Overall, the Supreme Court’s decision to strike down the electoral bonds scheme represents a significant victory for democracy and underscores the importance of protecting citizens’ rights in the electoral process. By upholding transparency and accountability, the court has taken a crucial step towards strengthening India’s democratic institutions and safeguarding the integrity of its electoral system.