India: Top Court Strikes Down Electoral Bonds Scheme

Facts

• India's Supreme Court on Thursday struck down an anonymous electoral funding scheme introduced by Prime Minister Narendra Modi's government in 2018, calling it 'unconstitutional' and a violation of the right to information.¹
• Under the scheme, individuals or firms could anonymously buy the State Bank of India's tax-exempted electoral bonds and donate them to political parties, which could then cash in these bonds.²
• Political parties and activists had challenged the scheme — alleging it was problematic for transparency, harmed democracy, and was unfair to the opposition.³
• The five-judge Constitution Bench also directed the State Bank of India to stop issuing electoral bonds and submit details of all purchases since April 12, 2019, to the Election Commission of India.⁴
• Chief Justice Justice DY Chandrachud stated that it was essential for the voters to know about the funding of political parties 'for the effective exercise of the choice of voting,' adding unlimited corporate funding violated the principles of free and fair elections.⁵
• However, the Modi government had defended the scheme, claiming that it would remove unaccounted money from entering elections.⁶

Sources: ¹BBC News, ²Al Jazeera, ³Moneycontrol, ⁴The Indian Express, ⁵Livelaw and ⁶Bloomberg.

Narratives

• Pro-establishment narrative, as provided by Carnegie India. Simply put, it's almost impossible in India to donate to a particular political party and not expect its rivals to act against the donor. Often, the repercussions can be deadly. Confidentiality becomes key in such situations. It's also incorrect to presume that only companies use the electoral bonds scheme — there's data to show the categories of donors are diverse. Most importantly, the scheme undercuts the importance of cash in political donations, plugging the gap for unaccounted funds to seep into electoral politics.
• Establishment-critical narrative, as provided by Archive. It's almost self-evident that in Indian elections, winnability is connected to financial power. Under the construct of electoral bonds, the BJP government has created a system where the voter can't know who has funded a party. There can't be a more promising gateway for corruption. Between March 2018 and July 2019, an overwhelming 91% of the donations made this way were by private companies and wealthy individuals. Who do you think the recipient's favorite will be when it comes to the rich versus the poor?

Predictions