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Electoral Bond Scheme - UPSC Analysis

  • 30 December, 2020

  • 9 Min Read

Electoral Bond Scheme - UPSC Analysis

Analysis of Electoral Bond Scheme

  • A recent order by the Central Information Commission (CIC) has again revealed the inherent problems surrounding the Electoral Bond Scheme (scheme) of 2018.
  • This order passed in an appeal against the State Bank of India (SBI) has effectively shut the door to seek any details about donors and donees relating to electoral bonds under the Right to Information (RTI) Act.
  • With no other recourse available, the Supreme Court is the only surviving arbiter in adjudicating the vires of electoral bonds.

An illegal scheme

  • The scheme creates banking instruments for a donation of funds to political parties facilitated by the SBI. It conceals the identity of the donors and donees as well as the amount of donation. In effect, the scheme is not transparent, promotes arbitrariness and is therefore illegal.
  • The scheme facilitates undisclosed quid pro quo arrangements between donors, who are likely to be corporates, and political parties.
  • Such an arrangement goes against the best practices of electoral democracy and is repugnant to the freedom of speech and expression.
  • In People’s Union for Civil Liberties v. Union of India (2003), the Supreme Court held that the freedom of speech and expression also contained the fundamental right of a voter to secure information about the candidates who are contesting the election.
  • When the voter is permitted to know if an electoral candidate is facing any cases, should she not be equally entitled to know who is financing the expenses of the party and its candidate?
  • The CIC order has upheld the contention of the SBI that it is not required to furnish the details of donors, donees and donations, under the RTI Act. In doing so, SBI has relied on two grounds provided under Section 8 of the RTI Act, which exempts disclosure of information: that the information sought has been held in a fiduciary capacity and that there was no public interest involved in the application.
  • Both grounds do not stand bare scrutiny of law.
  • It is also trite that any exemption provided under Section 8 should be read only in a very narrow sense. Section 8(2) directs that when public interest outweighs any harm to protected interests, the information sought for may be accessed.
  • This Section begins with a non-obstante clause. Therefore, it overrides the grounds erroneously relied upon by the CIC.


  • The public interest in the present matter is indisputable. The CIC, in an earlier order, deemed political parties to be public authorities under the RTI Act.
  • The funds received by parties from donors would naturally be of interest to voters in order to understand their financing and functioning. Donations by corporate entities would also be of interest to their shareholders and potential shareholders.
  • Therefore, the failure of the CIC in appreciating the present issue as one of high public importance and resorting to technical objections defeats the objects of the RTI Act itself.

The final arbiter

  • The CIC order effectively shuts the door on any RTI requests with regard to electoral bonds and any concomitant information.
  • There is no other recourse but for the Supreme Court to determine the law with regard to the scheme and the interpretation of the CIC. A batch of petitions filed by the Association for Democratic Reforms and the Communist Party of India (Marxist) are sub judice.
  • Therefore, the CIC’s decision, if carried to the Supreme Court on appeal, may also be tagged and heard altogether.
  • It is worth remembering that the writ petitions pending adjudication were filed over three years ago and that the respondents have also filed their pleadings. In its counter affidavit filed before the Supreme Court in 2017, the Election Commission argued the case for “declaration of donation received by political parties and also about the manner in which those funds are expended by them, for better transparency and accountability in the election process”.
  • The public scrutiny of parties and political candidates is an essential and inalienable part of a free and fair democratic process.
  • By suppressing knowledge of political financing, we are breaking the basic bonds of democracy holding the country together.
  • An unsettled law is as dangerous as bad law.
  • The Court must conclusively settle the questions around the constitutionality of electoral bonds.

Source: TH


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