Introduction
A secret donation system promised to clean up elections. Instead, it sparked outrage and a Supreme Court showdown. Was it a genius plan or a recipe for disaster? Dive in to the shadowy world of Electoral Bonds and see why some call it democracy’s darkest secret.
The Rise of Electoral Bonds
In the union budget of 2017-18, the Indian government introduced a new financial instrument called the “electoral bond” to facilitate political funding. Many people consider these bonds a way to curb black money transactions and provide a legitimate channel for corporate donations to political parties. However, controversy has since mired the scheme, with many now labeling it the “biggest scam in democratic India.”
Understanding Electoral Bonds
Individuals can purchase electoral bonds from authorized State Bank of India (SBI) branches, which are similar to gift cards or coupons.. Any individual or company can buy these bonds in multiples of ₹1,000, ₹10,000, ₹1 lakh, and ₹1 crore. The key features of these bonds are:
*Â Â They can only be redeemed by political parties that have secured a minimum of 1% of the votes in the previous election.
*Â Â The donor’s identity is kept anonymous, as the bonds do not carry the name of the purchaser.
*Â Â There is no limit on the number of bonds that can be purchased or the amount that can be donated.
The Rationale Behind Electoral Bonds
The government’s primary argument for introducing electoral bonds was to curb the flow of black money in political funding. Before this, people often made political donations in cash, which made it difficult to trace the source of the funds. The electoral bond scheme aimed to establish a legitimate, digital channel for corporate donations, thus reducing the dependence on untraceable cash transactions.
The Controversy Surrounding Electoral Bonds
Despite the government’s intentions, the electoral bond scheme has been the subject of intense debate and legal challenges. The Supreme Court of India ultimately declared the scheme unconstitutional, citing three key reasons:
1\. Violation of the Right to Information
The court ruled that the anonymity provided to donors through the electoral bond scheme went against the fundamental right to information of Indian citizens. By hiding the details of donors and the parties that redeemed the bonds from the public, the scheme violated transparency in the electoral process.
2\. Potential for Quid Pro Quo Arrangements
The court expressed concerns about the potential for “quid pro quo” (something for something) arrangements between political parties and corporate donors. The theory is that political parties could use the anonymity of the bonds to extort funds from businesses, promising favorable treatment in exchange for donations. While investigative agencies like the Enforcement Directorate (ED) have not conclusively proven a direct correlation between the electoral bond purchases and actions but the court acknowledged the possibility of such arrangements.
3\. Unlimited Corporate Donations and the Threat to Democracy
Prior to the introduction of electoral bonds, companies were limited to donating up to 7.5% of their average net profits over the past three years to political parties. The electoral bond scheme removed this cap, allowing for unlimited corporate donations. Many viewed this as a threat to the fairness of elections, as it could allow larger, well-funded parties and corporations to dominate the political landscape, potentially drowning out the voices of smaller parties and individual citizens.
The Broader Implications
The controversy surrounding electoral bonds has raised concerns about the integrity of India’s democratic process. Critics argue that the scheme has the potential to allow foreign entities to influence Indian elections by channeling funds through anonymous donations. Additionally, the disproportionate share of electoral bond purchases by larger corporations and the potential connections to investigations by agencies like the ED have fueled accusations of a “quid pro quo” arrangement between businesses and political parties.
While the government has defended the electoral bond scheme as a means to curb black money and provide a legitimate channel for political funding, the Supreme Court’s ruling and the ongoing debate have highlighted the need for greater transparency and accountability in the financing of India’s elections. As the country continues to grapple with this issue, the future of the electoral bond scheme and its impact on the country’s democratic fabric remain uncertain.
Conclusion
The introduction of the electoral bond scheme in India has been a highly contentious issue, with proponents arguing for its benefits in curbing black money and critics decrying it as a threat to the country’s democratic foundations. The Supreme Court’s ruling against the scheme has further heightened the debate, underscoring the need for a more transparent and equitable system of political funding in India. As the country navigates this complex landscape, the future of the electoral bond scheme and its implications for the integrity of India’s democracy remain a critical issue for policymakers, civil society, and the electorate to grapple with.
References:
https://www.eci.gov.in/disclosure-of-electoral-bonds
Link to my other case study:
https://geocrit.com/Japan’s-lost-decade