SC bans Electoral Bond Scheme: How much will the election campaigns affected? How big a blow this is for BJP?

SC bans Electoral Bond Scheme: In the election year, the Supreme Court has given a big decision regarding election donations. Now political parties in India will not be able to take donations through electoral bonds. On February 15, the Constitutional Bench of the Supreme Court declared electoral bonds unconstitutional. 

Electoral bond is a type of promissory note, which is also called bank note. It is used to collect donations above Rs 2000. In 2017, the Indian government used it for the first time to collect election donations. 

The Government of India had argued at that time that the cash system of donations promotes black money, hence the facility of electoral bonds has been started. However, many parties opposed it.

Case pending for 4 years, hearing for 3 days

Association for Democratic Reforms (ADR) had filed a petition in 2019 against electoral bonds. ADR had demanded a ban on it in its petition. ADR said that this bond is a wrong step towards electoral reforms. 

This case remained pending in the Supreme Court for 4 years. The Constitutional Bench heard this in November 2023. This bench included Chief Justice DY Chandrachud, Justice Sanjeev Khanna, Justice BR Gavai, Justice JB Pardiwala and Justice Manoj Mishra. 

The Constitutional Bench of the Supreme Court heard the entire matter for 3 days and reserved its decision on 2 November 2023. The Supreme Court has given its verdict 105 days after completing the hearing. 

The 3 arguments that got the bond banned

1. Electoral bond bribe, due to which the ruling party got more donations

 During the hearing on electoral bond, lawyer Prashant Bhushan appearing for ADR called it a bribe. To prove this, Bhushan also filed a report in the court quoting ADR. In this, the donations received by political parties in the last 5 years were explained in detail. 

According to ADR, BJP received Rs 5271.97 crore from electoral bonds from 2017 to 2022. Congress received only Rs 952.29 crore from electoral bonds during this period. 

Mamata Banerjee’s party Trinamool Congress received Rs 767.88 crore as donations from electoral bonds, while NCP received Rs 63.75 crore as donations. 

During 2017 to 2022, along with the Centre, BJP was in power in states like Bihar, UP, Haryana, Gujarat. During this period, Congress was in power in Rajasthan, Chhattisgarh and Punjab. 

While Mamata’s party was in the government of Bengal, NCP remained in power in Maharashtra for a few years. According to ADR, the party which has been in opposition for the last 5 years, received less than 1 percent donations through electoral bonds.

ADR said that in the election year 2019, BJP received a record donation of Rs 2555 crore from electoral bonds. This year Congress received donations of only Rs 317 crore. 

2. If ED and government can know, then why not the general public?

During the hearing in the Supreme Court, ADR’s lawyer Prashant Bhushan said that according to the arrangements made in this regard, SBI will know who gave the donations. ACBI is under the government. 

Bhushan said that the rules of electoral bonds state that ED can take information about donors from the bank. ED is also under the Centre. 

In such a situation, if ED can know about the electoral bonds. If SBI can know. If the government can know, then why not the common citizen?

3. The voice of the common citizens will be suppressed, which does not mean democracy

The third important argument given in the Supreme Court in its argument was related to the common citizens. During the hearing, senior lawyer Kapil Sibal said – Whoever gives money, the government will also work for him, then what will happen to the common citizens? If this process is transparent, the dominance of the corporate sector will be reduced. 

Prashant Bhushan gave the example of Jayantilal Ranchoddas Koticha vs Tata Iron case in the court. In this case, Justice Chhangla had commented that making political contributions does not serve the interests of a separate legal entity, but rather serves the interests of its agents.

Advocate Nizam Pasha said in his argument that donations are taken from Chinese companies through electoral bonds, but they are not allowed to manufacture them. What kind of rule is this? If there is a ban on manufacturing, then donations from Chinese companies should also be banned.

Bhushan also filed a letter from the Reserve Bank of India in the court in support of this argument, in which it was said that with the introduction of electoral bonds, money from shell companies will be easily available to political parties in the form of donations.

Is this a setback for BJP in the election year?

The Supreme Court’s decision on electoral bonds is being considered as a big blow for the ruling BJP in the election year. There are 3 main reasons for this- 

1. According to ADR, in the year 2019, Bharatiya Janata Party received a record donation of Rs 2555 crore from electoral bonds. This year Congress could get only Rs 317 crore. 

2. According to ADR, Bharatiya Janata Party has received 52 percent of the total donations through electoral bonds. This is equal to the total donations of all the parties. 

3. The Supreme Court has said in its decision that the list of people who have purchased electoral bonds so far should be made public. If the list becomes public in the election year, BJP may come under attack from the opposition. 

2 statements on electoral bonds…

1. Ashok Gehlot, former Chief Minister – Electoral bonds are the biggest scam after independence. BJP is getting more than 95 percent of the money. The government was trying to institutionalize this scandal.

2. Saket Gokhale, Trinamool MP – After the Supreme Court’s decision, it will be interesting to see how many people under the radar of ED and CBI have donated to BJP through electoral bonds.

What is BJP’s stand on electoral bonds?

At the time of bringing electoral bonds, the then Finance Minister Arun Jaitley had presented his stand on behalf of the Bharatiya Janata Party. According to Jaitley, the bond is an important step towards electoral reforms. This will be successful in stopping black money. The government bank has all the information about those who donate through electoral bonds. 

Jaitley had said- Electoral bonds are the only option to stop black money in election expenses. Electoral bonds can be purchased only from banks and deposited in the accounts of notified parties only. If the money is transferred through banks only then it will be ensured that the money comes into the political system only after paying taxes.

In 2023, BJP IT Cell head Amit Malviya had also described electoral bonds as a transparent method.