Understanding the Electoral Bond Scheme: A closer look

Madhurjya Saikia

(The writer can be reached at madhurjyatu15@gmail.com)

Political parties play a vital role in India’s democracy, serving as the cornerstone of political representation and governance. They provide a platform for citizens to express their interests and concerns, shaping policies and decisions that impact the nation. Through competition and cooperation, parties offer diverse ideologies and viewpoints, fostering debate and progress. Moreover, they facilitate the selection of leaders, ensuring accountable and responsive governance. In essence, political parties are essential for the functioning of democracy in India, embodying the voice of the people and driving the nation’s development.

The Electoral Bond Scheme in India is a system introduced in 2018 that allows individuals, corporations, or associations to purchase bonds from authorised banks and donate them to political parties anonymously. These bonds are used by parties to receive funds transparently without revealing the donor’s identity, promoting financial integrity in political funding. The scheme aims to curb black money in elections and enhance transparency by channelling donations through banking channels. However, critics argue it lacks transparency as donors remain undisclosed, raising concerns about the potential influence of vested interests in the political process. As the scheme mentions, only the State Bank of India is authorised to issue and encash these bonds. These electoral bonds are purchased anonymously by donors and are valid for 15 days from the issue date. As debt instruments, donors can buy these from a bank, and the political party can then cash them. These can be redeemed only by an eligible party by depositing the same in its designated account maintained with a bank.

Section 29C of the RPA (Representation of the People Act, 1951), as amended by the Finance Act 2017, stipulates that political parties need not disclose financial contributions received through electoral bonds. Section 13A of the IT Act, as amended, says that a political party does not have to maintain a record of contributions received through electoral bonds. Section 182 of the Companies Act 2013 was amended by the Finance Act 2017, by which the earlier requirement of disclosure of particulars of the amount contributed by companies to political parties in their profit and loss accounts was deleted and donors were only required to disclose the amount contributed without disclosing particulars about the political party to which the contribution was made.

Recently, a five-judge Constitution bench headed by the Chief Justice of India stated, The information about funding a political party is essential for a voter to exercise their freedom to vote in an effective  manner.” The Supreme Court on Thursday (February 15) delivered its highly anticipated judgement in the electoral bonds case, holding that anonymous electoral bonds are violative of the right to information under Article 19(1)(a) of the Constitution. Accordingly, the scheme has been struck down as unconstitutional.

Transparency is crucial in democracy because it ensures accountability, fairness, and trust in the government. When actions, decisions, and processes are open and visible to the public, citizens can hold their leaders accountable for their actions. Transparency allows people to understand how their government operates, how decisions are made, and how resources are allocated. It helps prevent corruption by exposing misconduct and unethical behaviour. Moreover, transparency fosters public trust and confidence in democratic institutions, which is essential for the stability and legitimacy of the government. When citizens have access to information, they can participate more effectively in the democratic process, make informed decisions, and engage in meaningful discussions. Overall, transparency promotes a healthy democracy where power is held by the people and the government operates in the best interest of the public. Political parties’ accountability is vital for a healthy democracy. They are entrusted with representing citizens’ interests and making decisions on their behalf. When parties are held accountable, they are transparent about their actions, finances, and policies. This transparency enables citizens to hold them responsible for their promises and actions. Accountability ensures that parties serve the public good rather than their own interests or those of special groups. It fosters trust between citizens and political leaders, enhancing the legitimacy of the democratic process. Ultimately, when parties are accountable, citizens can participate more effectively in democracy, confident that their voices are heard and their concerns addressed.

Article 326 of the Indian Constitution addresses the fundamental right to vote, a cornerstone of democracy. This article lays down the principles of universal adult suffrage, which means that every citizen of India who is above the age of 18 has the right to vote in elections without any discrimination based on factors such as caste, religion, gender, or economic status. Article 326 reflects the democratic ideals of the Indian Constitution, emphasising the importance of popular sovereignty and the power of the people in shaping the governance of the country. It enshrines the principle that the government derives its authority from the consent of the governed and that every citizen has a stake in the decision-making process. In India’s democracy, voters’ choices and information transparency are paramount to ensuring a healthy and vibrant political system. The electorate’s decisions shape the direction of the nation, influencing policies, leadership, and governance. When voters are well-informed about the issues, candidates, and party platforms, they can make informed choices that align with their values and aspirations. Information transparency ensures that voters have access to accurate and comprehensive information about political parties, candidates, and their agendas. This transparency fosters accountability among politicians and parties, as they are held responsible for their actions and promises. Additionally, informed voters contribute to a more engaged and participatory democracy, where citizens actively contribute to the decision-making process. Ultimately, the combination of informed voter choices and information transparency strengthens democracy by promoting accountability, citizen engagement, and responsive governance, leading to a more inclusive and prosperous society.

The importance of voter choices lies in their ability to shape the direction of democracy. Electoral bond scheme reform is crucial for transparency, ensuring voters can make informed decisions. By enhancing accountability and reducing the influence of undisclosed donors, these reforms strengthen democratic principles, fostering trust in the electoral process. Ultimately, empowering voters with transparency and accountability safeguards the integrity of elections and upholds the democratic ideals of representation and fairness.