Electoral bonds were a recent phenomenon in Indian political funding. Introduced in 2017, they aimed to cleanse campaign financing by offering a bearer instrument for anonymous donations to political parties. However, the concept faced immense criticism and ultimately met its demise in February 2024 with the Supreme Court ruling it unconstitutional.
What were Electoral Bonds?
Electoral bonds functioned like bearer bonds – a monetary instrument where ownership is established solely by possession. Donors could purchase these bonds from designated State Bank of India (SBI) branches and anonymously donate them to registered political parties. Parties could then encash them at designated branches.
Transparency Concerns:
The primary criticism of electoral bonds stemmed from the anonymity they provided. This essentially shielded the identity of donors, raising concerns about:
- Undue Influence: Anonymous donations could potentially allow corporations, foreign entities, or individuals with vested interests to influence political parties without public scrutiny.
- Lack of Accountability: Without donor information, it became impossible to track the source of funds, hindering investigations into potential money laundering or other malpractices.
Supreme Court’s Verdict:
The Supreme Court, acknowledging the anonymity issue, declared electoral bonds unconstitutional on February 15, 2024. The verdict emphasized the right to know the source of funds received by political parties, highlighting the crucial aspect of transparency in maintaining a fair electoral process.
Current Situation:
Following the Supreme Court’s ruling, the electoral bond scheme stands abolished. The Election Commission of India (ECI) has removed the relevant information from its website [Disclosure of Electoral Bonds].
Looking Ahead:
The abolition of electoral bonds necessitates the exploration of alternative funding mechanisms that prioritize transparency. Potential solutions include:
- Increased Public Funding: The government could allocate a higher budget for political parties, reducing their dependence on private donations.
- Regulation of Corporate Donations: Stricter regulations can be implemented to ensure transparency in corporate funding of political campaigns.
- Individual Contribution Limits: Setting limitations on individual donations can help prevent excessive influence from any single source.
