09 April, 2021

8 Min Read

Why should the electoral bonds scheme go?

Why should the electoral bonds scheme go?


  • For the last three years, electoral bonds have been the dominant method of political party funding in India.
  • In their design and operation, they allow for limitless and anonymous corporate donations to political parties.
  • For this reason, they are deeply destructive of democracy, and violate core principles of the Indian Constitution.

A blow against democracy

  • No right to know: And there is no piece of information more important than the knowledge of who funds political parties.
    • Citizens are in the dark about the source of money: it is then impossible to ever know — or assess — whether a government policy is nothing more than a quid pro quo to benefit its funders.
    • The Indian Supreme Court has long held — and rightly so — that the “right to know”, especially in the context of elections, is an integral part of the right to freedom of expression under the Indian Constitution.
  • Role of money: It is equally important that if a democracy is to thrive, the role of money in influencing politics ought to be limited.
    • In many advanced countries, for example, elections are funded publicly, and principles of parity ensure that there is not too great a resource gap between the ruling party and the opposition to provide a level playing field to all parties.
  • Against One vote- One Value: The electoral bonds scheme effectively allows well-resourced corporations to buy politicians by paying immense sums of money.
    • This defeats the entire purpose of democracy, which as B.R. Ambedkar memorably pointed out, was not just to guarantee one person, one vote, but one vote one value.
  • Misuse of power: Since the donations are routed through the State Bank of India, it is possible for the government to find out who is donating to which party, but not for the political opposition to know.
    • This, in turn, means that every donor is aware that the central government can trace their donations back to them.
    • Statistics bear this out: while we do not know who has donated to whom, we do know that a vast majority of the immensely vast sums donated through multiple electoral cycles over the last three years, have gone to the ruling party, i.e. the Bharatiya Janata Party.

Gaps in government’s defence

  • The government has attempted to justify the electoral bonds scheme by arguing that its purpose is to prevent the flow of black money into elections.
    • The journalist Nitin Sethi has already debunked this rationale in a detailed 10-part investigative report, which has also highlighted reservations within the government as well as by the Election Commission of India to the electoral bonds scheme.
  • Indeed, as the electoral bonds scheme allows even foreign donations to political parties (which can often be made through shell companies) the prospects of institutional corruption (including by foreign sources) increases with the electoral bonds scheme, instead of decreasing.
  • It is important to be clear that the objections to the electoral bonds scheme, highlighted above, are not objections rooted in political morality, or in public policy.
    • They are constitutional objections.

The judiciary needs to act

  • Role of Judiciary: One of the most critical functions of an independent judiciary in a functioning democracy is to referee the fundamentals of the democratic process.
    • And since the government itself cannot — in good faith — regulate the process that it itself is subject to every five years, the courts remain the only independent body that can adequately umpire and enforce the ground rules of democracy.

Role of elections: Governments derive their legitimacy from elections, and it is elections that grant governments the mandate to pursue their policy goals, without undue interference from courts.


  • It is for this reason that courts must be particularly sensitive to and cognisant of laws and rules that seek to skew the democratic process and the level playing field, and that seek to entrench one-party rule over multi-party democracy.
  • There is little doubt that in intent and in effect, the electoral bonds scheme is guilty of both. Thus, it deserves to be struck down by the courts as unconstitutional.

Source: TH

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