Bolo Toh Jaane — Audi Alteram Partem: Re, Electoral Bond Scheme

#BoloTohJaane — An initiative of The Sangyan and curated by Adv. Abhishek Kumar, to break the ‘spiral of silence’, based on the principle of ‘Audi Alteram Partem’ (“hear the other side”) and understanding of “let’s agree to disagree and respect each other’s ‘right to be wrong’”.

Let the śāstrārtha continue.

Audi Alteram Partem: Re, Electoral Bond Scheme — A Perceived Scam

Visual Description [Alt Text]: On a wall-themed background with red bricks and a brownish wooden platform at the centre with The Sangyan’s logo and the following texts: #HaveYourSay and linktr.ee/sangyan (at the top), Audi Alteram Partem: Re, Electoral Bond Scheme (in the centre), and #BoloTohJaane, शास्त्रार्थ/sāsträrtha, and The Point of View Wall (at the bottom).

In essence, the Supreme Court of India in the Electoral Bond Scheme case, struck down the Electoral Bonds, citing violations of the voters’ right to information and potential quid pro quo (favours in return for funding). This sounds fine, right? Indeed, but does this decision improve the status quo concerning political finance in India? In my limited understanding, this judgment rather than helping the cause of curbing black money and ensuring transparency and accountability in political funding, damages the very goal.

Arun Jaitley proposed the scheme while presenting the Union Budget for the 2017–18 fiscal year and stated that the scheme was “an effort to cleanse the system of funding of political parties” by providing an alternative to cash donations (the primary mode of political funding).

Section 7 (4) and (5) of the Electoral Bond Scheme provided for “The information furnished by the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency.” and “(5) A non-Know Your Customer compliant application or an application not meeting the requirements of the scheme shall be rejected.” These provisions do provide certain safeguards for transparency and accountability in political funding as per the procedure prescribed by the law. Electoral bond transactions have a footprint/trail with it mentioned in the balance sheet of both the donor as well as the receiving political parties.

When the scheme was introduced, all major political parties encashed the electoral bonds and benefitted from the scheme. The argument that the party in government disproportionately benefitted from the scheme doesn’t hold true as the absolute number doesn’t hold legitimacy. To understand, let’s explore using the thought experiment of India being the fifth-largest economy and above Switzerland, but that doesn’t mean India is better off when compared to Switzerland economically as the better parameter to compare the two economies is per capita income wherein India still is a developing nation while Switzerland is a developed counterpart. Similarly, when assessing the funding from the electoral bond scheme, it must be taken into account while putting the context of the number of MPs and MPLs of every political party and certain regional political parties received more per public representative through electoral bonds when compared to even national parties. Indeed, the scheme doesn’t perfectly qualify the test of least restrictive means and is flawed yet was a better step as it’s not that corporate giants like Tata, Reliance, and Adani, didn’t do any political funding — but probably preferred other avenues to carry out the political funding.

The Election Commission of India opposed the Electoral Bond Scheme, citing concerns about transparency in political finance and concerns regarding how the scheme could prevent information regarding foreign funding from coming out, “which could lead to Indian policies being influenced by foreign companies.” This is a valid concern that must be addressed by envisioning innovative mechanisms given the complex ownership and management of corporate companies.

The apex court struck down the electoral bond scheme primarily on the grounds of transparency, which though in principle does hold ground but we need to be pragmatic enough to understand good is not the enemy of ideal. The Electoral Bond Scheme is definitely not perfect but is indeed an upgrade on the situation of political funding before the introduction of the scheme and at present after the Supreme Court of India’s decision, wherein the political finance will return to the black money vulnerable cash deposits.

This decision also harms India’s Sovereign Guarantee of Anonymity to ensure there’s no political vendetta against the donors if and when they contribute or fail to contribute to certain political parties. The retroactive effect (when a law or decision comes into effect from a date before it was approved) of disclosure of electoral bond buyers (privacy of donors) damages the sovereign guarantee of the state having multiple order impacts, including rule of law and business confidence.

In conclusion, much like the NJAC verdict over the appointment of judges and the Collegium system, the apex court has done more damage than good. It should have chosen the path of strucking down certain specific provisions of contentions (and that too with proactive effect) rather than the whole act or scheme as the case may be. Remember, perfect isn’t the enemy of good! Rather than curbing the black money in political funding, it’ll harm the endeavour of ensuring transparency and accountability and actually result in promoting black money in political finance.

Moreover, the same rationale of transparency and accountability shall apply to the judiciary that fails to walk the talk when it comes to transparency and accountability, be it with respect to the Collegium system of appointment of judges by the judges themselves (which too is a violation of the citizen’s right to information about the grounds of selection/rejection and potential quid pro quo) and the declaration of assets of the judges which continues to remain unknown. PS, do check out the Assets of Hon’ble Judges of the Supreme Court of India
[https://main.sci.gov.in/assets-judges] Surprised, right? And yes, your internet connection is working fine.

Now the ball is back to the turf of the Parliament of India to discuss, deliberate, draft, and legislate another law and policy framework that’s an upgradation to the previous electoral bond scheme and takes into account the concerns raised by the Election Commission of India, Supreme Court of India and We The People of the Republic of India, in order to ensure transparency and accountability in political funding while upholding the rule of law, privacy concerns, and confidence of businesses.

References

Electoral Bond Scheme 2018 Gazette Notification №20 dated 02nd January 2018 [https://www.scobserver.in/wp-content/uploads/2021/10/Electoral-Bonds-Scheme-2018.pdf]

Association for Democratic Reforms & Anr. vs Union of India & Ors.; 2024 INSC 113; (Electoral Bond Scheme Judgment) [https://main.sci.gov.in/supremecourt/2017/27935/27935_2017_1_1501_50573_Judgement_15-Feb-2024.pdf]

Constitutionality of the Electoral Bond Scheme — Electoral Bond Scheme Case Brief [https://www.scobserver.in/cases/association-for-democratic-reforms-electoral-bonds-case-background/]

SC strikes down electoral bonds: Full timeline and scheme explained [https://www.business-standard.com/elections/lok-sabha-election/sc-strikes-down-electoral-bonds-full-timeline-and-scheme-explained-124021500665_1.html]

Electoral bonds data | Retrospective ‘who paid whom’ order has grave impact: Industry bodies [https://indianexpress.com/article/india/electoral-bonds-data-retrospective-who-paid-whom-order-has-grave-impact-industry-bodies-9221593/]

Authored and Curated by

Adv. Abhishek Kumar

Founder, The Sangyan and Curator, ‘Build Forward Better’ Campaign