The court judgement, which reintroduces caps on corporate donations and emphasises transparency in political funding, is a turning point in Indian democracy.

By Ashok Bhan

In a historic judgement, the Supreme Court of India, by a constitutional bench of five eminent judges headed by the Chief Justice of India, has unanimously overturned the Centre’s electoral bond scheme. The scheme, which allowed anonymous political donations, was ruled unconstitutional by the court and as violatative of the right to information enshrined in Article 19(1)(a) of the Constitution.

The system of electoral bonds, which had been in place for seven years, allowed individuals and companies to support political parties without disclosing their identity or limiting donations. This lack of transparency raised concerns from opposition parties and civil society groups, who argued that it compromised the public's right to know the sources of political funding.

Chief Justice DY Chandrachud, speaking on behalf of the court, highlighted the significance of the judgement by emphasising how political donations can have an undue influence on policy making. The court recognised the detrimental impact of an "additional layer of opacity" in the electoral process, especially when substantial sums of money flow into political coffers from undisclosed sources.

The judgement comes at the right time to preserve the purity of elections and democracy itself, as emphasised by the Kashmir Policy and Strategy Group. By cancelling the electoral bonds system, the court aims to curb political mischief and restore accountability in the election funding process.

The electoral bonds system allowed individuals and companies to buy bonds from the State Bank of India and donate them to political parties, concealing their identity. Despite the government's argument that this mechanism curbed the influence of "black money'," critics claimed that it perpetuated opacity and facilitated potential quid pro quo arrangements.

According to the Association for Democratic Reforms (ADR), a significant portion of political donations totalling several billion rupees were channelled through electoral bonds. The dominance of corporate donations with a clear bias in favour of certain political parties gave rise to concerns about the undue influence of large corporations on political decisions.

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