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Introduction

In the landscape of political financing, electoral bonds emerged as a revolutionary tool in India, promising a new era of transparency and accountability. Launched in 2018, these instruments were touted to cleanse the murky waters of political donations, allowing for white money to flow into the electoral process while protecting donor identities.

The Genesis of Electoral Bonds

Electoral bonds were conceived as financial promissory notes, enabling individuals and corporations to donate to political parties anonymously. The anonymity was defended as a shield against potential victimization of donors by political rivals. However, this feature soon became the crux of a heated debate.

The Controversy Unravels

The anonymity clause, while protecting donors, raised alarms about the transparency of political funding. Critics argued that shielding donor identities could lead to a lack of accountability, where the electorate remained in the dark about the financial backers of their elected representatives.

The Donors and Their Contributions

As the Supreme Court lifted the veil of anonymity, the magnitude of donations came to light. Corporations and individuals had poured in substantial amounts through electoral bonds, with some donations running into hundreds of crores. The top donors included prominent industrial houses and business magnates, reflecting a deep intertwining of business and politics.

The electoral bonds scheme has seen a diverse range of donors contributing to various political parties in India. Here's a detailed look at the donors, their contributions, and the timing of these contributions:

Donor Contributions and Parties

  • Megha Engineering & Infrastructures Ltd. was a significant donor, contributing notably to the BJP.
  • Future Gaming and Hotel Services emerged as one of the significant buyers with electoral bonds worth over Rs 1,350 crore.
  • Vedanta Ltd and Bharti Airtel's three firms made substantial contributions with bonds worth Rs 398 crore and Rs 246 crore, respectively.
  • Lakshmi Niwas Mittal purchased Rs 35 crore worth of bonds.
  • Spicejet and IndiGo were also among the corporate purchasers.

Dates of Contributions

  • The contributions spanned several years, with the State Bank of India disclosing that a total of 22,217 electoral bonds were bought between April 1, 2019, and February 15, 2024.
  • The dates of purchase and encashment were meticulously recorded, with the Election Commission of India (ECI) releasing the data following the Supreme Court's directive.

Correlation with Election Dates

  • There was a noticeable pattern where the sale of electoral bonds increased around the time of elections.
  • For instance, during the Lok Sabha elections of 2019, a surge in bond purchases was observed between April 12, 2019, and May 10, 2019, coinciding with the election period.
  • Similarly, during state elections in Haryana, Maharashtra, Jharkhand, and Delhi, there were increased purchases and encashments of electoral bonds just before and during the polls.

The data released by the ECI, as mandated by the Supreme Court, has brought to light the scale and timing of contributions through electoral bonds, revealing a pattern that suggests a correlation between bond purchases and election cycles. This has sparked discussions on the influence of such contributions on the democratic process and the need for transparency in political funding.

The Quid Pro Quo Allegations

The anonymity of electoral bonds raised suspicions of a potential quid pro quo. Were policy decisions being influenced by hefty donations? The data released by the Election Commission sparked a nationwide discussion on the integrity of political decision-making processes.

The allegations of quid pro quo in relation to electoral bonds stem from concerns about the potential for undisclosed financial contributions to influence political decisions and policy-making. Here's a detailed explanation:

Anonymity and Influence

  • The anonymity provided by electoral bonds allowed corporations and individuals to donate large sums of money to political parties without disclosure.
  • This lack of transparency raised suspicions that donors could be rewarded with favorable policies, contracts, or other forms of preferential treatment.

Corporations and Electoral Bonds

Electoral bonds have been a controversial financial instrument that allowed corporations to donate to political parties anonymously.

The anonymity of these bonds raised concerns about the potential for quid pro quo arrangements, where companies could receive favorable treatment in return for their donations.

Specific Cases and Allegations

There have been instances where the timing of electoral bond purchases by corporations coincided with the awarding of government contracts.

For example, a builder in Maharashtra was alleged to have received a significant deal to build under the Awas Yojna scheme around the same time they purchased electoral bonds.

Megha Engineering & Infrastructures Ltd. has been involved in several large-scale projects, such as water projects, highway constructions, and power plants, which have been critical for infrastructure development.

Future Gaming, primarily known for its gaming equipment, does not appear to have direct links to government contracts or benefits from electoral bond donations as per the available data.

Coincidence or Correlation?

Investigations and reports have suggested that there might be a correlation between the purchase of electoral bonds and the awarding of government contracts to the donors.

The Supreme Court of India, in striking down the electoral bond scheme, highlighted the need for transparency in political donations, emphasizing that voters have a right to know who funds political parties.

The Aftermath

Following the Supreme Court’s ruling, there has been a push for more transparency in political funding, and the details of electoral bond transactions have been made public.

This transparency is expected to shed more light on the relationship between political donations and government contracts.

It’s important to note that while there have been allegations and concerns regarding the potential for quid pro quo, the exact nature of any benefits received by corporations in exchange for electoral bond donations would require further legal and investigative scrutiny to establish any direct causality. The recent developments and the Supreme Court’s decision are steps towards ensuring more transparency in the political funding process in India.

Supreme Court's Observations

  • The Supreme Court of India, in its verdict declaring electoral bonds unconstitutional, noted that the scheme violated the Right to Information and freedom of speech.
  • The court emphasized that the electoral bond scheme could lead to economic inequality influencing political engagement and potentially result in quid pro quo arrangements.

Political Funding and Governance

  • The possibility of quid pro quo arises when there is a perception that political donations could be exchanged for benefits from the party in power.
  • The concern is that large donations could unduly influence the political process, undermining the integrity of democratic governance.

Public Reaction and Legal Scrutiny

  • The public and legal scrutiny intensified after the Supreme Court's ruling, leading to calls for a more transparent political funding system.
  • The demand for accountability and the right to know who funds political parties has been at the forefront of the debate on electoral bonds.

The quid pro quo allegations highlight the need for a balance between donor privacy and public transparency in political funding. The Supreme Court's decision reflects the ongoing concern over the potential for corruption and the influence of money in politics.

The Supreme Court Intervenes

The apex court's decision to strike down the electoral bond scheme marked a watershed moment. It underscored the fundamental right of voters to know who funds political parties, thereby upholding the principles of transparency and accountability in a democracy.

The Supreme Court of India’s intervention in the matter of electoral bonds has been a significant development in ensuring transparency in political funding. Here’s a detailed explanation of the intervention and the rationale behind it:

Supreme Court’s Intervention

On February 15, 2024, the Supreme Court delivered a landmark judgment declaring the electoral bonds scheme unconstitutional.

The Court found that the scheme violated the right to information under Article 19(1)(a) of the Constitution, which is essential for voters to exercise their freedom to vote effectively.

The Court also held that the amendments introduced by the Finance Act 2017, which allowed for the scheme, were arbitrary and violative of Article 14 of the Constitution.

Shift from Opaque to Unconstitutional

Electoral bonds were introduced with the intent to protect donor identities and encourage legitimate funding to political parties.

However, the anonymity provided by the bonds led to concerns about the potential for corruption and undue influence in politics.

The Supreme Court’s review highlighted that the opacity of the scheme was against the fundamental principles of transparency and accountability in a democracy.

The Unconventional Lens

The Supreme Court took an unconventional approach by prioritizing the citizens’ right to information over the privacy of donors.

The Court emphasized that transparency in political funding cannot be achieved by granting absolute t electoral process. The decision to strike down the electoral bonds scheme reflects the Court’s commitment to ensuring that the democratic process remains free from the influence of undisclosed financial contributions.

Conclusion

The scrapping of electoral bonds may not be the end of the journey towards transparent political funding, but it is a significant leap forward. As India grapples with the challenges of electoral financing, the quest for a system that balances donor privacy with public transparency continues.

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