The Flawed Verdict

The recent decision by the Supreme Court of India to strike down the Electoral Bonds Scheme, designed to curtail political parties’ reliance on black money by channelling funds exclusively through banks, has stirred widespread debate. While the media, intellectuals, and even opposition parties—ironically major beneficiaries of the scheme—have hailed the verdict, we contend that the judgment is profoundly flawed, to say in legal parlance it is ‘Clearly Erroneous’. Let’s delve into the reasons behind this assertion.

An Alternative to the Black Money

Prior to the implementation of the Electoral Bonds Scheme, political parties, both ruling and opposition, primarily received donations in cash, synonymous with black money. The Electoral Bonds Scheme presented a viable alternative to this practice. As per information disclosed by the Election Commission, since its inception in 2018, political parties have garnered donations totalling ₹16,000 crores through electoral bonds—a significant shift towards transparent financial transactions facilitated through banks. Critics of the scheme cannot refute the fact that funds routed through banks cannot be deemed as black money. Without the Electoral Bonds Scheme, these parties would have likely received the same ₹16,000 crores in unaccounted cash, perpetuating the cycle of corruption. The anonymity guaranteed by the scheme encourages donors who eschew black money practices to contribute via bonds. However, the Supreme Court’s decision has compelled some potential donors—who intended to contribute via cheques—to resort to illegal means like the Hawala method, exacerbating the inflow of black money into political coffers. It is regrettable that the Court’s ruling dismantles a well-intentioned effort to stem the tide of black money in political financing.

Electoral Bonds Donation: More for BJP, Less for Opposition?

An analysis of audited political party accounts for the fiscal year 2022-23 reveals the extent of donations received through the Electoral Bonds Scheme. As per the data available in the image below notably, parties such as Trinamool Congress (TMC) has received 97.5% of its total donations through the Electoral Bonds; 86.31% by the DMK; Odisha’s Biju Janata Dal [BJD] 84%; Telangana’s Bharat Rashtriya Party [BRS] 72%; In Andhra, YSR Congress Party 69.6%; BJP 55% and Congress got 38% through EB Scheme. Surprisingly, even the parties opposed to the BJP which introduced the EB scheme got donations through Electoral Bonds instead of black money. The TMC which got 96.8% through bonds in 2021-22, got 97.5% in 2022-23, it was not a fall, instead a rise comparatively. In 2022-23, BJP received ₹1,294 crore through Bonds. Secondly BRS got ₹529 crore through bonds. The table shows that Trinamool is in 3rd place with ₹325 crore, DMK is in 4th place with ₹185 crore, Congress is in 5th place with ₹171 crore and BJD is in 6th place with ₹152 crore.

Based on the data in the court verdict, ₹16,518 crore has been donated to parties through bonds since the introduction of the EB scheme, out of which ₹6,566 crore has been given to the BJP, ₹1,123 crore to the Congress, ₹1,092 crore to the TMC, ₹775 crore to the BJD, ₹617 crore to the DMK and ₹384 crore to the BRS.

However, the apparent dominance of the BJP in bond donations as per the aforesaid numbers belies a deeper reality. The proportional analysis reveals that smaller parties like TMC, DMK, BJD, and BRS have received significant sums relative to their political presence. Let us see that in detail. 

The fact that BJP got 39.75% of the total donation from Electoral Bonds is only in appearance. TMC which is predominantly functioning only in West Bengal has only 42 parliamentary constituencies. If TMC got ₹1,092 crores, the BJP, which contested in 437 constituencies in the 2019 elections, is 10 times more the size of TMC. Only if BJP gets ₹11,362 crores via EB donation, both BJP and Trinamool can be considered as equal. It can be said that the DMK, which has 40 parliamentary seats, received ₹617 crores via bonds as an equal to the amount received by the BJP. Similar to TMC, ₹775 crore received by BJD in Odisha where there are only 21 MP constituencies, can be said is equal to BJP which contested in 437 seats, if BJP had got more than ₹16,000 crores. ₹384 crore for Telangana based BRS with 14 MP seats, is equal to nearly ₹12,000 crore against BJP which contested 437 seats. So the fact that BJP got more is just an appearance and not a reality. 

₹1,123 crore received by Congress which contested in 428 seats in 2019 elections is less only. Why did Congress get less? If the influential TMC, BJD and DMK could receive a substantial amount of donations through Bonds, like how it shows the sign of their influence, the decline in donations to the Congress will only reflect its decline. The argument that since other opposition parties are in power in the states, they get more from Bonds than the Congress is also wrong. Because those parties are in power in their respective states. From 2018 to 2023, Congress was in power in states like Punjab, Rajasthan, Himachal, MP, Chhattisgarh, Karnataka, Maharashtra, Telangana, and even today it is in power in states like Karnataka and Telangana. There is no difference between the BJP and other opposition parties [except the Congress] in terms of funding through Bonds. Why only Congress is getting less funds from Bonds? This is because the influential state leaders in Congress keep funds in their own hands rather than giving them to the party. The seizure of hundreds of crores of rupees in cash from Congress leaders confirms it. The fact that the Congress has less donations than the BJP cannot be said to be a drawback of the Bonds scheme.

Erroneous decision

The Supreme Court’s decision to nullify the Electoral Bonds Scheme rests on three main contentions: lack of transparency, violation of voters’ right to information, and potential undisclosed incentives to donors. However, these objections fail to recognize the scheme’s merits in mitigating black money influx and fostering financial accountability. Unlike cash transactions, electoral bonds ensure traceability and accountability, offering insights into party finances. 

The very premise of the court’s decision rests on the lack of transparency within the Electoral Bonds Scheme, which serves as the cornerstone for the other objections raised against it. However, adopting a narrow perspective on the intricate dynamics of politics fails to grasp its inherent complexities. Consider, for instance, the Supreme Court’s insistence on transparency across all domains. Yet, elected judges are mandated to disclose details of their assets solely to the Chief Justice, with no obligation for public disclosure. While this approach has its shortcomings, it acknowledges the existence of underlying truths. Similarly, in the case of the Electoral Bonds Scheme, the Court had a golden opportunity, indeed an imperative, to mandate revisions. It could have, indeed ‘must’ have, given directions to the State Bank of India, the issuer of bonds, to furnish details of donors to the Election Commission, thereby ensuring greater transparency and accountability.

The Court’s failure to acknowledge the scheme’s role in curbing cash-based transactions may inadvertently exacerbate the flow of black money into politics. By discarding a potentially rectifiable scheme, the Court has unwittingly opened the floodgates to a resurgence of black money in elections. The Court’s decision to annul the Electoral Bonds Scheme represents a regressive step that jeopardizes the integrity of electoral financing. It is imperative for stakeholders to recognize the scheme’s inherent benefits and explore avenues for reform rather than succumbing to a myopic view of political realities. We firmly believe that this verdict has inadvertently opened the Tsunami-gates to a resurgence of black money, reversing the progress made in curbing its influence through the Electoral Bonds Scheme.

Note to the Reader: This article originally appeared in Thuglak Tamil Weekly Magazine. It was translated in English by Shri Venkateshwaran from Thuglak Digital for

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