The recent decision by the Supreme Court to strike down the Electoral Bonds Scheme marks a significant milestone in the realm of electoral finance reform. This move underscores the judiciary’s pivotal role in upholding democratic principles and ensuring transparency in political funding. By deeming the scheme unconstitutional, the court has addressed longstanding concerns regarding the anonymity of donors and the potential for misuse of funds to influence electoral outcomes. This decision heralds a renewed focus on accountability and integrity in the electoral process, signaling a positive step towards restoring public trust in democratic institutions. However, it also raises important questions about the future of campaign finance regulation and the need for robust mechanisms to safeguard the integrity of elections.
Tag: GS – 2 Transparency & Accountability, Government Policies & Interventions, Elections, Issues Arising Out of Design & Implementation of Policies
In News:
The Supreme Court of India struck down the Electoral Bonds Scheme, citing a breach of the right to information.
Introduction
- On February 15, 2024, a significant development unfolded in India’s democratic landscape as the Supreme Court delivered a groundbreaking verdict, striking down the Electoral Bonds Scheme.
- This landmark decision, grounded in upholding the Constitution’s basic structure and democratic principles, addressed various concerns and challenges raised against the scheme.
Electoral Bonds Scheme
- Overview of Electoral Bonds
- Electoral bonds, akin to promissory notes, were introduced in 2018 for political funding in India.
- Purchased from the State Bank of India (SBI), these bonds could be donated to registered political parties for encashment.
- The scheme aimed at enhancing transparency in electoral funding, aligning with the government’s vision of a cashless-digital economy.
- Amendments in 2022
- An additional 15-day period was introduced during general elections for Legislative Assemblies.
- This amendment raised concerns regarding the impact on the electoral process and transparency.
Concerns Raised
- Contradiction of Transparency
- Critics argued that the scheme lacked transparency, with anonymity benefiting the ruling party and posing risks to free and fair elections.
- Potential for Extortion
- The sale of bonds through a government-owned bank raised concerns about the government’s knowledge of funding sources, potentially leading to extortion or bias.
- Compromising Right to Know
- Exemption of political parties from disclosing donations contradicted citizens’ right to know, a vital aspect of a representative democracy.
- Crony Capitalism
- Removal of donation limits facilitated crony capitalism, allowing well-resourced corporations to unduly influence elections.
- ADR Report Findings (2023)
- Analysis revealed skewed ratios of donations, highlighting the dominance of Electoral Bonds in political funding.
- National parties saw a substantial surge in bond donations, raising questions about their influence.
Supreme Court’s Decision
- Violation of Right to Information
- The court held that anonymous political donations under the scheme violated the fundamental right to information, crucial for participatory democracy.
- Proportionality Test
- Relying on a proportionality test, the court emphasized the government’s failure to adopt less restrictive methods to achieve transparency in political funding.
- Privacy vs. Political Contributions
- The court clarified that the right to privacy did not extend to large corporate donations, emphasizing the need for transparency in such contributions.
- Unlimited Corporate Donations
- The court found the amendment allowing unlimited corporate donations manifestly arbitrary, impacting free and fair elections.
- Quashing Amendments
- Amendments to Sections 182 and 29C of relevant acts were quashed, restoring disclosure requirements for political contributions.
Court’s Instructions and Future Suggestions
- Immediate Actions
- The SBI was directed to cease issuing electoral bonds, and details of past bond purchases were to be furnished to the Election Commission.
- Suggestions for Electoral Funding
- Regulation of donations and expenditure limits were proposed to prevent undue influence.
- Public funding options, akin to the German model, were considered for a balanced and fair political financing system.
- Balancing transparency and anonymity, especially for small and large donors, emerged as a crucial consideration.
Conclusion
- February 15, 2024, stands as a historic day, with the Supreme Court’s unanimous decision dismantling the Electoral Bonds Scheme.
- This verdict, founded on constitutional principles, addresses concerns about transparency, privacy, and the impact on democratic processes, signaling a significant stride towards a more accountable and fair electoral financing system in India.
| UPSC Previous Year Questions Prelims (2019) Q. ‘Right to Privacy’ is protected under which Article of the Constitution of India? (a) Article 15 (b) Article 19 (c) Article 21 (d) Article 29 Ans: (c) Mains (2018)Q. The Right to Information Act is not all about citizens’ empowerment alone, it essentially redefines the concept of accountability.” Discuss. |
Source: IE
Frequently Asked Questions (FAQs)
Q: What was the Electoral Bonds Scheme, and why did the Supreme Court strike it down?
A: The Electoral Bonds Scheme was introduced in 2018 to enable anonymous donations to political parties through bonds purchased from authorized banks. The Supreme Court struck it down because it found the scheme to be unconstitutional, citing concerns over transparency and the potential for misuse of funds to influence electoral outcomes.
Q: How did the anonymity of donors under the Electoral Bonds Scheme affect the electoral process?
A: The anonymity of donors allowed for undisclosed contributions to political parties, which raised concerns about transparency and accountability. Without knowing the source of funds, it was difficult to ascertain potential conflicts of interest or undue influence on political decisions.
Q: What implications does the Supreme Court’s decision have on electoral finance reform in India?
A: The Supreme Court’s decision underscores the importance of transparency and accountability in electoral financing. It signals a need for comprehensive reforms to ensure that political funding processes are transparent, free from undue influence, and uphold the principles of democracy.
Q: How will the striking down of the Electoral Bonds Scheme impact political parties and their fundraising activities?
A: Political parties will need to reassess their fundraising strategies and rely on more transparent means of financing. The decision may lead to increased scrutiny of donations and a push for reforms that prioritize transparency and accountability in political fundraising.
Q: What are the next steps following the Supreme Court’s decision to strike down the Electoral Bonds Scheme?
A: Following the Supreme Court’s decision, there may be discussions among policymakers, civil society groups, and political stakeholders to formulate alternative mechanisms for political funding that uphold democratic principles. This could involve drafting new legislation or amending existing laws to address the shortcomings highlighted by the court’s ruling.
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