The Electoral Bond Scheme was introduced with the Finance Bill 2017 and notified on January 29, 2018. It allows for anonymous donations to political parties through bearer bonds to increase transparency in political funding.
Its features include: 1) denominations from Rs 1000 to Rs 1 crore, 2) validity for 15 days, 3) purchase from SBI branches, 4) redemption within 15 days by political parties securing over 1% of votes, and 5) the bonds can be purchased by citizens, companies, etc., and 6) are issued in January, April, July, and October.
Recently,Supreme Court in the Association for Democratic Reforms & Anr. v. Union of India (UoI) & Ors., unanimously struck down the Electoral Bonds (EB) Scheme. The SC also struck down the amendments to several Acts (like RoPA, 1951; IT Act, 1961; Companies Act, 2013) that were undertaken to facilitate the Electoral Bond Scheme.
Rationale behind invalidation: Donor anonymity violated citizens’ right to information about political party funding
- Scheme violates the Right to Information under Article 19(1)(a) which guarantees the freedom of speech and expression.
- Money in politics creates unequal access to legislators and potential quid pro quo situations, leading to economic and political inequality. Transparency in political party funding is crucial for informed voting decisions.
- Disproportionate Restrictions: Curbing black money is neither a valid restriction under Article 19(2) nor does it pass the Test of Proportionality, as established in the Puttaswamy case (2017).
- SC also struck down amended Companies Act’s Section 182(3) allowing unlimited political contributions by companies, violating Article 14.
- Already alternatives like electronic transfers and Electoral Trusts were available
- Scheme provides for “selective anonymity” and “selective confidentiality” as the details of electoral bonds are available with the State Bank of India (SBI) and can also be accessed by the law enforcement agencies.
Significance of judgement
- Institution of ‘Hierarchy of Rights’: Prioritized voter’s right to information (Article 19(1)(a)) over donor anonymity.
- Applied “double proportionality” test, balancing right to information and right to privacy.
- SC mandates state to adopt “least restrictive” measures on fundamental rights, while exercising its legislative functions.
- It reaffirms the ‘definite’ and ‘structured’ proportionality test from the Puttaswamy case, guarding against arbitrary actions that could violate rights under the pretext of a ‘legitimate State interest’. Further, The Supreme Court can examine the State’s definition of ‘legitimate state interest’, behind any legislative action.
- Reaffirmed Right to Information as cardinal virtue of democracy : Voters have a right to information essential for exercising their freedom to vote
Thus, by striking down the electoral bonds scheme and reinstating key legal provisions, the court emphasizes the primacy of transparency and accountability in electoral financing.
Recently the High-level Committee on Simultaneous Elections, constituted under the chairmanship of Shri Ram Nath Kovind, has proposed simultaneous elections for Lok Sabha, state Assemblies, and local bodies in India.
Desirability of simultaneous elections:
- Cost Savings: Estimated savings of ₹4,000 crore for Central government and reduced campaign expenses for political parties.
- Governance Efficiency: Avoidance of ‘permanent campaign’ mode hindering policy making.
- Timely Policy Decisions: Election code of conduct delays key policy decisions.
- Efficient Resource Utilization:
- Reduced deployment of police and para-military forces.
- Key law enforcement personnel can focus on critical functions.
- Social Cohesion: reduce the divisive impact of regionalism, casteism, and communalism in mobilising voters.
- Reduction in Political Corruption:Frequent elections necessitate continuous fundraising.
- Mitigation of Horse Trading: Specific election periods minimize chances of horse-trading.
- Control over Freebies: Fewer elections lead to better financial management for state governments.
- Simplified Electoral Process:Using uniform electoral rolls across all elections saves time and money
- Enhanced Voter Engagement: Voter fatigue, resulting from frequent elections at different levels, can be alleviated by consolidating polls into a single event.
Challenges in its adoption:
- Federal Character Concerns: National issues overshadow regional ones, disadvantaging regional parties.
- Accountability: Elections serve as a periodic feedback mechanism for policies and governance. Simultaneous elections would limit this feedback to a 5-year cycle.
- Constitutional Amendments: substantial amendments to Articles 83, 85, 172, and 174 would be necessary, affecting the duration and dissolution of legislative houses .
- Security Implications: During simultaneous elections, deploying large security forces for election duty may weaken national security by diverting resources from border protection.
- Logistical Challenge: The Election Commission has to deploy ~30 Lakh EVMs and VVPAT machines to implement ONOE.
Way Forward: Simultaneous elections are beneficial for governance, cost-saving, and reducing corruption. The government should build consensus among political parties for successful implementation and then adopt panel recommendations with suitable amendments.
