By Venkatasubramanian Srinivasan
On February 15, 2024, a five-judge bench of the Supreme Court of India unanimously nullified the Electoral Bonds Scheme (EBS), citing violations of voters’ rights to information about political funding under Article 19(1)(a) of the Constitution. This decision overturned the amendments made to Section 29C of the Representation of the People Act, Section 182 of the Companies Act, and Section 13A of the Income Tax Act through the Finance Act of 2017, which introduced the EBS as a Money Bill. The original Section 29C mandated public disclosure of political contributions exceeding Rs. 20,000, regardless of the mode of payment. The court highlighted that the EBS, relying on anonymity under Clause 7(4), facilitated unchecked corporate influence in elections and granted political parties full exemption from disclosing contributions received via electoral bonds. Furthermore, it emphasized the distinction between corporate donations and individual contributions, suggesting that not all contributions aimed to sway public policy, and donations for quid pro quo lacked genuine political endorsement.
While the Supreme Court’s ruling is widely respected, the absence of an alternative mechanism leaves room for the continuation of previously criticized methods of election funding, which also failed to uphold voters’ right to information about political financing. Public opinion on the verdict varies, with some wondering whether the court could have advocated for transparency rather than outright scrapping the EBS and whether a more nuanced approach could have addressed its deficiencies while preserving its intended goals of transparency and accountability. To strike a balance between promoting transparency, accountability, and clean money in politics while reducing the influence of illicit funds, the EBS could have been revised to include more comprehensive disclosure requirements, establish independent oversight mechanisms, ensure compliance with transparency standards, and undergo periodic evaluation and review.
The annulment of the EBS by the Supreme Court necessitates policymakers and citizens to explore alternative measures to ensure transparency and integrity in election funding. This could include enhancing the Election Commission of India’s (ECI) role in regulating and overseeing election funding. Despite mandates under various laws and regulations, the effectiveness of both the ECI and the Income Tax Department in enforcing their authority fluctuates due to factors such as regulatory complexity, enforcement challenges, resource constraints, political pressures, legal ambiguities, and inter-agency coordination issues. Acknowledging the efforts of these agencies in upholding electoral integrity, continuous endeavours to enhance transparency, strengthen enforcement mechanisms, and address systemic issues are crucial for improving regulatory oversight of election funding and expenses. Additionally, electoral reforms aimed at empowering regulatory bodies, augmenting their resources, and fostering greater accountability can mitigate underlying challenges.
Some of the alternative measures to ensure transparency and integrity in election funding include:
- Strengthening disclosure requirements for political donations, ensuring that all contributions above a certain threshold are publicly disclosed.
- Implementing caps on individual and corporate donations to political parties or candidates to prevent undue influence.
- Exploring the possibility of public funding for political parties or election campaigns, either through direct subsidies or matching funds for small donations.
- Encouraging grassroots fundraising and crowdfunding campaigns to reduce dependence on large donors.
- Enforcing voluntary spending limits during elections to promote fairness and prevent excessive spending by wealthy candidates.
Ultimately, any alternative system should prioritize transparency, fairness, and accountability in election funding to uphold the integrity of the democratic process.
While systemic challenges and political inertia may induce frustration, citizens and stakeholders can still take actions to promote fairness, transparency, and accountability in the electoral process. These include advocacy, raising awareness, exerting pressure on politicians, utilizing legal avenues, supporting alternative political movements, seeking international assistance, community mobilization, and promoting civic education and voter empowerment. Overcoming obstacles to electoral integrity in environments lacking political will requires collective action and persistence. By collaborating and employing diverse strategies, citizens can contribute to building a more transparent, accountable, and democratic electoral system. It is essential to remain engaged, resilient, and committed to the principles of fairness and justice in the pursuit of electoral reform, recognizing that comprehensive change may necessitate sustained advocacy efforts over the long term. Every step towards electoral integrity, no matter how small, is significant.
[The author is a retired international civil servant of the United Nations, presently Founder & Principal Consultant, India i.e., Bharat Knowledge Exchange, and Founder & CEO, Quill & Juris]
