by India’s Supreme Court on Thursday struck down a controversial fundraising mechanism that allowed individuals and corporations to make anonymous political donations, a system that was widely seen as an advantage for Prime Minister Narendra Modi’s ruling party.
Although the ruling came just months before the country’s next general election, likely too early to affect its outcome, activists said it could bring more liability to campaign finance in the future.
The decision on “electoral bonds”, as the fundraising instruments are known, came six years after the Modi government introduced them. According to political analysts, his ruling Bharatiya Janata Party raised huge sums of money during that period (both from electoral bonds and other means), money that it has used to defeat its rivals in elections and drown out the voices of the opposition generally.
Under the disputed fundraising system, the government-owned State Bank of India, India’s largest commercial bank, issued paper bonds that could be purchased in exchange for donations to a political party of the donor’s choice. They range from just $12 to more than $120,000, with no limit on the number of bonds a donor can purchase.
Although the purchases were anonymous in the sense that they were not publicly reported, the federally run State Bank of India knew the identity of each buyer.
“This decision was made with the laudable objective of bringing transparency to the electoral system. We respect the court order,” Ravi Shankar Prasad, leader of the ruling party, said of the Supreme Court ruling. “We will give an appropriate response after studying the entire sentence.”
In their 232-page ruling, the justices wrote that they wondered how elected representatives could be held accountable to the electorate if “corporations, which bring with them enormous finances and engage in quid pro quo agreements with parties, are allowed contribute unlimited amounts. “
In other words, the Supreme Court did not take seriously the idea that corporate donors were giving money to politicians simply out of a sense of civic duty. “The motive for the companies’ political contributions is as clear as daylight,” its judges wrote. However, “the integrity of the electoral process is fundamental to sustaining the democratic form of government.”
During court hearings, Prashant Bhushan, one of the lawyers who brought the case against the government, told judges that around 99 percent of the bonds issued ended up in the hands of the ruling party and its allies.
In its ruling on Thursday, the five-judge court declared the entire system unconstitutional and ordered the State Bank of India to stop issuing further bonds. He also ordered that all funds received by political parties since April 2019 through the bonds be reported to the country’s federal electoral commission.
For decades, some Indians have clamored for transparency in campaign finance, as their elections have become more expensive. By some estimates, Indian elections now cost even more than competitive elections in the United States.
Police often confiscate large amounts of cash, liquor and other incentives from candidates and parties, which must be distributed to voters before elections. Political observers say politicians who spend the most money to win elections tend to become corrupt the fastest as they look for the first opportunity to finance their future campaigns.
In 2017, when the Modi government introduced the electoral bond system, its finance minister argued that it was necessary to bring transparency to campaign financing. Opposition politicians and other critics noted that the nature of the system seemed best designed to benefit politicians already in power.
In a recent report, the Association for Democratic Reforms or ADR., a nonprofit organization working to clean up Indian elections, said individuals and companies had bought about $2 billion in electoral bonds as of last November, and that Modi’s party alone had received about $2 billion. 90 percent of the corporate portion of these donations in the previous fiscal year.
Jagdeep S. Chokkar, a member of the ADR and one of the petitioners before the Supreme Court, said the ruling would prevent further damage like that caused to the electoral system in recent years and should help level the political playing field in the country. future.
“The plan had the potential to give an additional advantage to whichever ruling party was in power. And it has the potential to suffocate the funding of all opposition political parties,” by giving the government the power to surreptitiously monitor the fundraising efforts of its rivals. “That mischief has been eliminated,” Chokkar said.
