Tatsat Chronicle Magazine

Bonds Of Disempowerment

The Supreme Court’s decision to declare the electoral bonds unconstitutional underlines the importance of a people’s right to know about the relationship that exists between a political party and its funders. Any other position on this issue is essentially anti-democratic
March 26, 2024
Bonds

Suddenly, electoral bonds (EBs) which have been in active use in polls for years to fund political parties and enable them to meet their needs or expenses during election campaigns have turned sour. Now they stand scrapped or banned for what seems to be all time to come.

In February, the Supreme Court struck down the bonds, calling them unconstitutional. Soon, rival political parties vying to win the coming general election have begun interpreting the bonds in a way such that one party could score over another by shifting the blame for reaping huge sums through the EBs. These bonds, which promised anonymity for the buyers, or donors, were used as an instrument for making donations to political parties by both companies and individuals.

But the question that begs an answer is much bigger. Is it the companies or individuals making donations or the political parties accepting them alone that have a stake in these controversial bonds, or do the people of the country too deserve to know about use or abuse of this tool of political financing that was in play for six years since 2018?

This is all the more because the bonds have turned out to be bad in law, though a large section of the political class had been going all out in flaunting them as a fair, transparent and clean instrument for political financing. The public was also made to believe it to be so, until a citizen petition was moved and the Supreme Court intervened.

The Court detected a number of infirmities in the bond scheme and held it unlawful. Among other things, the scheme, in the court’s view, violated the people’s right to know who gave how much to political parties. This is a right that draws strength and sustenance from Article 19 (1) of the Constitution. The apex court ruled that rights enshrined under Article 19 (1) cannot be curtailed by any other provision or law.

In its judgment of February 15, a Constitution bench of the top court led by Chief Justice D.Y. Chandrachud pointed out, “Section 182(3) [of the Companies Act] as amended by the Finance Act 2017 mandates the disclosure of total contributions made to political parties. This requirement would ensure that the money which is contributed to political parties is accounted for.

“However, the deletion of the mandate of disclosing the particulars of contributions violates the right to information of the voter since they would not possess information about the political party to which the contribution was made which, as we have held above, is necessary to identify corruption and PART F 123 quid pro quo transactions in governance. Such information is also necessary for exercising an informed vote.”

What the Court meant is that the Companies Act warranted disclosure of donations made to political parties to shareholders of the company making such donations. But this was amended in 2017 to make donations made by companies through electoral bonds exempt from disclosure. The bonds could be purchased by donors from the State Bank of India (SBI) during specified periods in the year and redeemed or encashed by parties within 15 days of being issued by the bank.

Like the Companies Act, changes were also made in the Income or Direct Tax laws to keep electoral bonds safe from disclosure of the identity of the purchaser and the party that was the beneficiary.

The justification was that, in case of a change of government after the polls, the donor companies would not be targetted by the new government.

Provision was made for disclosure of the identity of donors by the SBI in case this was warranted through the orders of a competent court or when disclosure became necessary before law enforcing agencies. This was an exception made to justify the introduction of bonds as an instrument of political funding rather than a norm to ensure a fair degree of transparency from the people’s point of view.

The Court, while striking down the bonds, noted that the secrecy around the donor and receiver was detrimental to the voters’ right to know “who is funding whom and why”. The judgment calls this a violation of voters’ right to information. It also notes that this opens the door to corruption through quid pro quo.

Since the evening of March 14, when the first disclosures about the purchasers and beneficiaries of the bonds emerged — posted on the Election Commission of India’s website, based on the data provided by the SBI on the Court’s orders — numerous instances of a likely quid pro quo have emerged.

Union Finance Minister Nirmala Sitharaman has denied any connection between the bonds received by the ruling party and reprieves or benefits that were enjoyed by the donors. But, obviously, no government would admit to a quid pro quo.

The sums involved are huge — which would never have become known to the public if the Court had not intervened in the way it has. The Supreme Court rose to defend and uphold the right to information of the people, the voters, which is a pre-condition for democracy.

This is more so since most governments prefer to conceal more than they reveal. There is an intrinsic contradiction in the nature of the relationship between political power and information. Stymying the flow of information to the people is essential for building political narratives at the cost of empowerment. The empowerment of any society begins, grows, moves or progresses by easy, fair and equitable access to knowledge of public affairs, including public finances.

The last of these is most important since it is the lower strata of society that suffers the most from such opacity. The higher rungs or the elite are in any case better equipped and positioned to make informed choices and lobby in accordance with what would be best for them.

So, the revelations being made in the wake of the historic judgment of February 15 could well lead to a new awakening for the populace. Especially as most of them hope for a better and more meaningful future.

Abid Shah

He is a senior journalist, who has worked with the Statesman for many decades and reported on politics, social development, agriculture and political movements.