India’s Supreme Court dealt a significant blow to the country’s political landscape on Thursday by overturning a seven-year-old election funding system known as Electoral Bonds. This system, allowing individuals and companies to make anonymous donations to political parties without limit, was deemed “unconstitutional” by the court.
The decision marks a setback for Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP), which has been the primary beneficiary of the scheme introduced in 2017. The court’s ruling follows challenges from opposition members and civil society groups, arguing that Electoral Bonds impeded transparency in political funding.
Under the now-defunct system, individuals and companies could purchase bonds from the state-run State Bank of India (SBI) and donate them to political parties. According to the Association for Democratic Reforms (ADR), donations through Electoral Bonds amounted to a staggering 165.18 billion rupees ($1.99 billion) up to November 2023.
A five-judge bench led by Chief Justice D.Y. Chandrachud emphasized the undue influence of political contributions, stating that they granted contributors significant access and sway over policymaking. Consequently, the court declared the scheme unconstitutional and prohibited the issuance of new bonds.
Responding to the ruling, BJP spokesperson Gopal Krishna Agarwal affirmed the party’s commitment to electoral funding reforms and pledged compliance with the court’s decision. The reinstatement of corporate donation limits underscores the court’s recognition of the disproportionate influence wielded by companies in the electoral process.
The court directed the State Bank of India to cease issuing Electoral Bonds, disclose the identities of bond purchasers, and furnish information regarding bonds redeemed by each political party. Despite the Modi government’s defense of the policy as a measure to curb cash-based political funding, the court’s decision highlights the imperative for transparency and accountability in the electoral arena.
Notably, since the inception of Electoral Bonds, the BJP received a significant portion of the funds, surpassing 65.66 billion rupee