Electoral Bonds Scheme: SC on Transparency
The Electoral Bonds Scheme, introduced in 2018, was designed to facilitate funding of political parties through banking channels, purportedly to cleanse political financing. Under the scheme, donors can buy bonds from specified banks and donate anonymously to registered political parties, with the aim of reducing cash donations and promoting transparency. However, the anonymity feature and lack of public disclosure of donors’ identities have raised significant concerns, leading to Supreme Court scrutiny.
The Supreme Court has emphasized that while political parties require funding to function in a democracy, such funding must balance with the constitutional mandate of transparency and accountability under Articles 14, 19(1)(a), and 324. Key issues under SC examination include:
- Transparency vs Anonymity – Critics argue that anonymous donations undermine electoral transparency, allowing undue corporate influence, hidden funding, and potential policy capture. The SC has highlighted the need for public scrutiny to ensure free and fair elections.
- Information Disclosure – While the Reserve Bank of India maintains donor details, the current scheme does not make this information publicly available. The Court has questioned whether limited access to authorities alone satisfies the principle of transparency essential for democratic accountability.
- Equal Opportunity and Fair Play – The SC has examined whether secretive funding advantages certain parties or candidates, potentially distorting the level playing field in elections. This implicates Article 14’s equality principle.
- Legislative Competence and Oversight – The Court considers whether Parliament’s enactment of the scheme adequately balances donor privacy, party funding needs, and electoral transparency, and whether regulatory safeguards and monitoring mechanisms are sufficient.
- Judicial Guidelines – Pending final adjudication, the SC has issued interim directions to the Election Commission, mandating careful monitoring of donations and ensuring that scheme provisions do not compromise free and fair elections.
The debate centers on whether electoral bonds promote clean funding or whether they create opacity that shields large donors from public scrutiny. Judicial scrutiny reflects a constitutional tension between donor confidentiality, party funding needs, and voter right to know.
In conclusion, the Supreme Court’s examination of the Electoral Bonds Scheme underscores the need for transparency, accountability, and safeguards against misuse, while recognizing the practical necessity of party funding. Ensuring robust oversight, partial disclosure to authorities, and monitoring by the Election Commission can help balance democratic funding needs with electoral integrity, making political financing both lawful and publicly accountable.