Analysis: Why the SC judgment on electoral bonds is a bigger blow to all opposition parties

Impact of SC's electoral bonds judgment to be felt across all parties

The Supreme Court (SC), in a judgment on February 15, termed the electoral bonds scheme “unconstitutional.” The order hits the electoral financing of parties, coming as it does months before the general elections.

The BJP received Rs 5,271.97 crore via electoral bonds between 2017-22, while the Congress received Rs 952.29 crore. More than 57 percent of the funds raised through these bonds have gone to the BJP.

The budget for fighting an election in India runs into thousands of crores. A big chunk of this is unaccounted for, raised in cash from different sources. According to a study by the New Delhi-based Centre for Media Studies, the 2019 polls cost a whopping Rs 50,000 crore, which is more than what was spent in the US Presidential elections. The Election Commission (EC) states that a candidate can spend between Rs 50 and 70 lakh for contesting a Lok Sabha Election. For assembly elections, the ceiling is between Rs 20 and 28 lakh.

While a big chunk of the bonds benefitted the BJP, it probably makes for a fraction of the costs associated with elections. Significantly, the bonds are available for purchase for a period of 10 days each in the months of January, April, July, and October. The central government can announce an additional period of 30 days at the time of general elections.

The timing of the judgment is crucial, as the last tranche of bonds were issued in January and the next tranche would have come up for sale in April.

In the past few months, several leaders from opposition parties have been raided, including Tejashwi Yadav, the former Deputy Chief Minister of Bihar, Arvind Kejriwal, the Chief Minister of Delhi, AAP leader Raaj Kumar Anand, Aam Aadmi Party Leader Sanjay Singh,  Congress leader Bhupesh Baghel and his associates, on charges of money laundering, irregularities during their tenure in power, corruption charges and so on. Fourteen political parties have moved the SC against what they term the ‘indiscriminate use of agencies’ by the government — i.e., the ED and the CBI.

After the slew of raids that opposition parties have been subject to, cash donations will be difficult to come by for them. That, compounded with the fact that the electoral bonds scheme can no longer be used for raising funds, will only aggravate the situation for them.

Subhash Chandra Garg, former Finance Secretary of India and one of the chief architects of the electoral bonds scheme, told Moneycontrol that “the judgment is flawless and in principle you can’t fault it, but it is completely impractical given the situation of the country. Donations will continue. Electoral bonds had brought in transparency. The judgment has taken us back to the dark ages prior to electoral bonds.”

The judgment prohibits the issuance of fresh bonds, and asks the State Bank of India to disclose the details of the donors along with the amounts to the EC. “What about the privacy of donors? You are violating the legal protection that parliament had created,” said a source in the BJP.

What hurt the scheme was opacity that came with it.

According to a former election commissioner, "The SC order has set aside reasons that why the scheme is unconstitutional- if the scheme was not opaque it would have passed the Supreme Court scrutiny. I don’t think electoral bond is bad but the accompanying amendments on secrecy was provided that compromised on the right to information."

The judgment, some say, turns the clock back on electoral financing, opening the floodgates for dubious ways of bankrolling polls. By law, donations above Rs 20,000 have to be declared and cannot remain anonymous. For the financial year 2022-23, total donations declared by the national parties was Rs 850.438 crore from 12,167 donors.