Electoral bond funding has become an inevitable part of elections in the current political landscape. It is a significant aspect of political financing. It is believed to promise transparency and accountability, but on the other hand, there are concerns about transparency. In this article, let’s discuss Electoral bond funding and its implications in the political scenario.
What are electoral bonds?
Electoral bonds are instruments like promissory notes issued by the State Bank of India to enable political donations through banks. Individuals and companies can buy electoral bonds and deposit them in the account of the political party, which can only be encashed by the particular account where it is deposited. These are issued in denominations from ₹1000 to ₹ 10 million and are sold at least 4 times a year. This enables the donor to deposit money anonymously. The access to donor’s information lies with the bank alone. The sole purpose of the bond is to take funds on behalf of political parties and divert it to them.
Transparency Of Electoral Bonds
The decision to issue electoral bonds was made to ensure transparency in political funding. The parties are required to give the details of everyone who contributes more than ₹20000 in cash. However. This mandatory declaration becomes void with the electoral bond. The scenario changed when the Supreme Court ruled that political parties can no longer raise funds anonymously via electoral bonds. The proponents of electoral bonds say that they ensure transparency in political funding because it reduce the cash finding and, thereby, black money ruling the elections. However, electoral funds faced a lot of criticism against it. They argue that the anonymity of donors will cause corporate influence in political elections. This, in turn, raised concerns about the possible misuse of funds. Critics further say that the opacity around the political funding will negatively affect public opinion about the elections and undermine the integrity of elections. To date, more than a dozen trusts have been formed to donate funds to political parties, but the purpose of these trusts is ambiguous.
The Court’s View On Electoral Bonds
The court said that electoral bonds can no longer be counted as a valuable form of political funding and that political donations cannot be made anonymously. The court further viewed anonymity to people who provide large donations as against fundamental rights. Chances of larger corporates receiving quid pro quo benefits in policy decisions and other areas cannot be ruled out. Hence, electoral bonding cannot be counted as a transparent mode of political funding. Removing the need for a disclaimer will adversely impact the foundations of democracy. Judge D.Y. Chandrachud, who pronounced the order on behalf of a five-judge bench, said that the scheme is arbitrary and against the basic principles of India’s constitution. The Supreme Court heralded a new era of transparency by striking down the electoral bond. This is believed to be a landmark in the fight against corruption and unfair influence in elections.
The Impact Of The Ruling On BJP
Since the scheme was introduced in 2018, it has been a primary channel for corporates to donate to political parties. This is going to affect all the political parties across the country. However, it is believed that BJP will be the most adversely affected party as the electoral bond was issued by SBI, which comes under the ruling party. It was believed that the ruling party would receive an unfair advantage of having access to the information about the donor. However, debates are rife on this subject.
In May 2023, an electoral bond sales report procured by RTI shows that 90% of bonds were bought from just 5 cities. The five cities are Mumbai, Kolkata, Hyderabad, New Delhi, and Chennai. Mumbai emerged as the highest contributor, with 26.16% contributions. Bengaluru, the tech capital of India contributed to about 2% only. The New Delhi Branch of SBI is where 65.55% of the donations were encashed. This concentration of funding in a few cities raised eyebrows and brigs about douts on the transparency of political funding. This concentration of funds in a few cities raised a few eyebrows as it indicates that the funds are raised in areas which favor a particular party. Hence, the transparency and authenticity of the sources are yet to be confirmed.
Reports state that in the FY 2022-23, BJP received 13 billion rupees in funding. On the contrary, Congress received only 1.7 billion rupees per the audit reports submitted by the Election Commission of India. Though the court’s ruling will not suddenly shake the party’s stand, observers are keen to see how this will affect the upcoming elections.
The Sum Up
Electoral funds proved to be a complex political, money and power issue. The irony is that proponents and critics of the electoral bonds use transparency as a reason to back their argument. On one hand, it makes it easy to track the source of funds by eliminating cash. On the other hand, it hides the source in the guise of namesake trusts. In light of the ruling by the honorable Supreme Court, the political climate of India is up for a drastic change as the wave of cash flow changes. It is interesting to see if this significant ruling will impact the election results. Of late election campaigns are punctuated by technical developments which need immense cash. Hence, whether the new scenario will maintain the status quo or change the wind is to be seen.
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