Representative image.
Credit: DH Illustration
The quashing of the Electoral Bonds scheme by the Supreme Court is a salutary judgement in four important ways. Firstly, it declared a patently unconstitutional act as ‘unconstitutional’. It may seem trivial to say so, but only a Constitutional Court can do that, and besides, these are difficult times when respect for the Constitution and its spirit, especially from a majoritarian executive with a parliamentary majority cannot exactly be taken for granted.
Secondly, it restored our faith in the highest court’s ability to push against this strong executive and call a sham, a sham. Thirdly, it killed a virus that was injected into our democratic process with great cunning. It was nothing short of subterfuge that amendments to four different Acts (the RBI Act of 1934, the Representation of People Act 1951, the Income Tax Act 1961, the Companies Act 2013, were brought, hiding them in the Finance Bill of 2017 to ensure that the Rajya Sabha, where the BJP did not have the numbers to push them through, could not reject them. And it was the height of political chicanery to claim that Electoral Bonds would bring in greater transparency in political funding when nothing about it was transparent to the country and the voters.
Finally, the SC, with its ruling, has upheld a very fundamental idea of democracy -- the right of citizens to know who is giving how much money to which political party, so that they can make an informed choice at the time of voting. Overall, it’s a moment of triumph for our democracy that is widely seen to be ‘backsliding’.
By this verdict, the SC has exposed the Orwellian double-speak and fake narrative put out that Electoral Bonds were meant to clean up black money from the electoral arena and that it had introduced a system of honest and transparent funding to all political parties. Lest we forget, the Prime Minister had started his claimed war on black money with ‘demonetisation’ in November 2016. While the Prime Minister then kept shifting the goalposts, it was widely speculated that one of the unstated objectives was to demonetise the cash holdings of Akhilesh Yadav and Mayawati just before the UP elections in early 2017. Logically, that would lend a better perspective on Electoral Bonds – while demonetisation removed the stock of political funding that was available with the Opposition, the Electoral Bonds scheme, such as it was designed, would ensure that much of the subsequent political funding would flow only to the ruling party given that while the donors and donations would be invisible to everybody else, the government would know. The same mindset is now in evidence when the I-T Department puts a freeze on the bank accounts of the Congress party. But political vengeance cannot be State policy. It threatens democracy.
Be that as it may, how successful was the removal of black money from the economy? In 2018, the RBI reported that 99.3 per cent of the demonetised bank notes, or Rs 15.3 lakh crore of the Rs 15.41 lakh crore that was demonetised, were deposited with the banking system. Arun Shourie, a former BJP minister, called demonetisation itself the “biggest money laundering exercise since Independence”. Moreover, as per RBI data, in October 2022, currency in circulation had increased to Rs 30.88 lakh crore, up from Rs 17.7 lakh crore at the time of demonetisation – with cash in the economy growing faster than the GDP.
Post-2019 elections, Reuters estimated that $8.6 billion, or about Rs 60,000 crore was spent by all political parties during those elections, with the BJP alone accounting for half of it. The BJP’s income through Electoral Bonds in 2019-20 was Rs 3,623 crore. Even assuming that Electoral Bonds were a ‘transparent’ way of funding political parties, as claimed by the BJP, was the rest of the money it spent on the 2019 elections all ‘black money’? And considering that this was less than two years after demonetisation, then how come there was still so much unaccounted money in the system?
With 543 Lok Sabha seats, the average expenditure per constituency was Rs 129 crore – a staggering 150 times or so above the Rs 70 lakh expenditure permitted by the Election Commission. The funds received through Electoral Bonds by all parties was only 10-12 per cent of the total money spent by them. Does that not mean that the BJP remains the highest mobiliser of both ‘white’ and ‘black’ money? Would the BJP also say whether it incurred expenditure to ‘incentivise’ MPs and MLAs to switch sides before and after elections, especially in states where it lost the popular mandate.
All this is not to decry the enormous significance of the SC verdict. The SC has clearly established three cardinal principles here. The citizen is the primary sovereign in a democracy. Secondly, the political parties are only vehicles that mediate between him and the State by offering policy options and choice of representatives. They have only delegated powers, and the representatives cannot abrogate to themselves the power to raise funds for their use without the voter’s knowledge. The voter must know who is paying the party that he chooses, for that alone indicates where that party’s primary loyalty lies – whether with the voter or with the donor.
This verdict no doubt strengthens our democracy and is a significant push back against authoritarian tendencies and deceitful policies. When every constitutional body is being systematically weakened or their powers eroded, the Supreme Court has provided a flicker of hope in these dark times.
Today, when political leaders are venerated as avatars of God, the SC has reminded them of the constitutional limits that must apply to even God, and that arbitrary exercise of power is not permissible. The verdict also puts a serious doubt on the moral legitimacy of the ruling party that benefitted so much from this dubious scheme of Electoral Bonds for over five years.
(The writer is a former Cabinet Secretariat official)