The Supreme Court judgement on electoral bonds on Thursday is reminiscent of two apparently contradictory cliches. First, it is too little too late. Secondly, it is also better late than never.
When the then finance minister, the late Arun Jaitely introduced the proposal to have electoral bonds in his budget speech, it took the government 11 months before it was formally fleshed out. Even then, the law that was struck down by the apex court had to be introduced as a money bill, which does not have to be passed by the Rajya Sabha.
The legal challenge, initially by Common Cause (CC) and the Association for Democratic Reforms (ADR), has taken around six years to reach its present denouement.
Why is it too little? Jaitely said the bonds will impart greater transparency to political funding in India. What actually happened was just the opposite. It made political funding more opaque.
As a member of the Governing Council of CC, one of the two original petitioners together with the ADR, I am proud to endorse the view of the CC that “the Electoral Bonds had not only made electoral funding of political parties more opaque, but the scheme had also legitimised high-level corruption at an unprecedented scale by removing funding limits for corporate donors and by opening a backdoor for the funding of Indian elections by foreign interests and lobbyists. “
The Public Interest Litigation petition sought a direction from the Supreme Court to strike down the amendments brought in illegally as part of a money bill in order to bypass the scrutiny of the Upper House of India’s Parliament.
The Finance Act, 2016, allowed foreign companies with subsidiaries in India to fund political parties, effectively exposing India’s democratic political system to corporate lobbyists. The earlier restriction that political donations would not exceed 7.5% of the donating company’s average three-year net profit was done away with. This leads to the absurdity of loss-making companies making donations of any amount of their choice to political parties even out of their capital or reserves.
Between March 2018 and January 2024, electoral bonds worth Rs 16,518.1099 crore were purchased, as per the responses given by the State Bank of India to questions raised under the Right to Information Act by public minded citizens like Commodore Lokesh Batra (retired).
The highest amount of electoral bonds (by amount) totalling Rs 15,631 crore were purchased in the denomination of Rs one crore.
Between 2017-18 and 2022-23, the Bharatiya Janata Party declared donations worth Rs 6,566.125 crore from electoral bonds and the Indian National Congress declared Rs 1,123.3155 crore, according to the audit report of the country’s two largest political parties. Over half (54.7786%) of the total electoral bonds declared by the recognised political parties between 2017-18 and 2022-23, were received by the BJP.
The data for 2023-24 is not available as the audit reports of the political parties are not available on the website of the Election Commission of India. The total amount of donations from the bonds will be higher.
The point to note is that the proceeds from electoral bonds comprise only a fraction of the total money that is spent legally and illegally by political parties and their candidates on election campaigns.
Even if one assumes that the State Bank of India, the Election Commission of India and the government of India all adhere to the directions of the Supreme Court in letter and spirit, the dates for the general elections would probably be known before the end of March. So it would have only a small impact on political funding in the forthcoming general elections.
Nevertheless the Supreme Court’s 15 February judgement is to be welcomed. It is difficult to predict the future but we can only hope that the Narendra Modi government does not choose to issue an ordinance to nullify or reverse the order of the Supreme Court.
One also hopes that the government will not choose to file a review petition or a curative petition before a larger bench comprising more than five judges of the apex court of the country.
