Electoral Bonds Verdict: Constitutional Implications and Impact on Indian Democracy
The Supreme Court of India’s landmark judgment on February 15, 2024, striking down the Electoral Bond Scheme, signifies a pivotal moment for transparency in India’s political financing. Introduced in 2018, the scheme allowed anonymous donations to political parties, heavily criticized for obscuring donor identities. This verdict carries profound constitutional implications for the right to information, governmental transparency, and the future of political funding, crucial for UPSC, SSC, Banking, and other Government Exam preparation.
Understanding Electoral Bonds: A Brief Overview
Electoral Bonds were financial instruments for donating to political parties. Purchased from designated SBI branches, they were then donated anonymously for encashment. Though stated as a measure to curb black money, the scheme’s anonymity fostered opacity, raising concerns about potential quid pro quo arrangements.
Key Provisions of the Electoral Bond Scheme (Abolished)
The defunct Electoral Bond Scheme had distinct operational features:
It functioned as a bearer instrument, ensuring the donor’s identity remained hidden from public scrutiny and political parties.
Available in denominations from Rs. 1,000 to Rs. 1 crore, they facilitated donations of varying sizes.
Only citizens of India or entities incorporated in India were eligible to purchase these bonds.
Bonds were sold for specific ten-day periods quarterly (January, April, July, October), with extended periods during general election years.
Eligible recipients were political parties registered under Section 29A of the Representation of the People Act, 1951, having secured at least 1% of votes in the last election.
The State Bank of India held the exclusive authority for issuing and encashing electoral bonds.
The Supreme Court’s Landmark Verdict (Key Findings)
A five-judge Constitution bench, led by CJI D.Y. Chandrachud, unanimously declared the Electoral Bond Scheme unconstitutional on February 15, 2024.
The court ruled the scheme violated voters’ fundamental Right to Information (Article 19(1)(a)), deeming blanket anonymity disproportionate and detrimental to democratic principles.
It struck down related amendments to the Companies Act, Income Tax Act, and Representation of the People Act that facilitated the scheme’s opacity.
SBI was mandated to immediately cease issuing bonds and disclose all transactional details—including donor names, bond values, and recipient parties—since April 12, 2019, to the Election Commission of India (ECI).
The ECI was subsequently directed to publish this comprehensive data on its official website promptly.
Constitutional Implications of the Verdict
The verdict significantly reinforces core constitutional tenets, shaping future governance:
It affirms the Right to Information (Article 19(1)(a)), establishing citizens’ right to know political funding sources as fundamental for informed electoral choices and accountability.
The judgment underscores transparency as vital for a healthy democracy, preventing corruption and ensuring accountability in governance and policy-making.
It acts as a crucial check on potential quid pro quo arrangements between corporations and political parties, aiming to mitigate crony capitalism and undue influence on policy.
By overturning legislative amendments, the Supreme Court upheld its role as the Constitution’s guardian, ensuring adherence to fundamental rights and the basic structure doctrine.
The ruling strengthens institutions like the Election Commission, empowering them to ensure fairer elections through transparent financial disclosures, enhancing electoral integrity.
Impact on Transparency and Democracy
The abolition of electoral bonds is set to profoundly reshape India’s democratic landscape:
The disclosure of donor and recipient data has brought unprecedented public scrutiny to political funding, unveiling potential conflicts of interest.
It promotes enhanced accountability among political parties, encouraging ethical fundraising and reducing reliance on clandestine funding channels.
By eliminating anonymous large donations, the verdict aims to foster a more level electoral playing field, potentially curbing corporate influence in elections and policy decisions.
The judgment strengthens voter trust, empowering citizens with critical information for more active and meaningful participation in the democratic process.
This necessitates the formulation of new, transparent, and constitutionally compliant mechanisms for political funding, posing a significant legislative challenge.
Way Forward and Future of Election Funding
The verdict necessitates a robust re-evaluation and reform of India’s political funding system:
Parliament must now devise a transparent and equitable framework for political funding, adhering strictly to constitutional principles and international best practices.
Expert bodies like the Election Commission and Law Commission should propose comprehensive electoral finance reforms, exploring options such as state funding of elections or stricter caps on corporate donations.
A broad public debate is crucial to establish a sustainable and transparent funding model, balancing political party needs with public demands for accountability and fairness.
The Election Commission’s role in monitoring and enforcing future funding regulations will be paramount, requiring enhanced powers and resources to ensure strict compliance and prevent loopholes.
Frequently Asked Questions (FAQs)
1. What was the primary reason the Supreme Court struck down electoral bonds?
The Supreme Court found that electoral bonds violated the voters’ fundamental Right to Information under Article 19(1)(a) of the Constitution, as the anonymity of donors undermined transparency in political funding.
2. Which fundamental right was particularly emphasized in the Electoral Bonds verdict?
The verdict heavily emphasized the Right to Information, derived from Article 19(1)(a) (freedom of speech and expression), stating that citizens have a right to know about the funding sources of political parties.
3. What immediate action did the Supreme Court order regarding electoral bonds?
The Supreme Court ordered the State Bank of India (SBI) to immediately cease issuing electoral bonds and to disclose all details of bonds purchased and redeemed to the Election Commission of India.
4. How might the verdict impact future election funding in India?
The verdict mandates the government and legislature to devise a new, constitutionally compliant, and transparent mechanism for political funding, moving away from opaque instruments and increasing accountability.
Stay Updated with Daily Current Affairs 2025
Discover more from Current Affairs World
Subscribe to get the latest posts sent to your email.
