Supreme Court's Historic Ruling, Shedding Light on Political Funding Transparency in India: Explained

The Supreme Court on Monday (11th March) made a historical judgement on the Electoral Bond case, directing the State Bank of India (SBI) to share the details as per the Election Commission's (EC) instructions. 

The SBI had requested to postpone the disclosure of electoral bonds details until June 30, but the apex court has denied the request and directed SBI to provide the required information by the end of business hours on March 12. 

Chief Justice DY Chandrachud noted that the bank's application indicated the availability of the requested information, leading to the dismissal of the extension plea. 

Senior advocate Harish Salve, representing SBI, mentioned the bank's efforts to compile the information, which was initially intended to be confidential. However, Justice Sanjiv Khanna clarified that the bank needs to reveal the details as per the EC's instructions.

In India's history of democratic progress, the matter of political funding has always been a controversial topic, often surrounded by obscurity and ambiguity. The introduction of the electoral bonds scheme in 2018 was seen as a potentially transformative solution, aiming to modernize and simplify the process of political donations. 

However, the provision for donor anonymity within the scheme soon became a subject of criticism, raising concerns about its impact on transparency and accountability in the political arena.

The electoral bonds scheme, which was managed solely by the State Bank of India (SBI), allowed both individuals and corporations to donate to political parties without publicly revealing their identities. While supporters of the scheme argued that it protected the privacy and security of donors, critics contended that it created a shadowy system that was vulnerable to exploitation and misuse. 

They argued that the lack of transparency undermined the essence of democratic governance, where citizens have the right to scrutinize the sources of political funding and hold their representatives accountable.

What was the case?

On February 15, 2024, the Supreme Court of India delivered a historic ruling by striking down the electoral bonds scheme as unconstitutional. Led by Chief Justice DY Chandrachud, a five-judge Constitution bench declared that the scheme violated the fundamental rights outlined in Article 19(1) (a) of the Constitution, particularly the right to information and freedom of speech and expression. 

This landmark decision marked a crucial moment in India's legal and political landscape, signifying a significant triumph for transparency and democratic principles.

The recent directives issued by the Supreme Court have compelled the State Bank of India to disclose the details of political parties that receive electoral bonds. This is a significant step towards ensuring transparency in the Indian political system and upholding the pillars of democracy. 

The ruling is a watershed moment in the nation's history and marks the beginning of a new era of heightened accountability, transparency, and faith in the democratic process.

This article provides an unbiased and chronological account of the events that led to the Supreme Court's landmark decision on electoral bonds. The article also explains the details of the judgment and the reactions it has generated.

The Genesis of the Electoral Bonds Scheme

In 2018, the Government of India introduced the electoral bonds scheme to facilitate donations to political parties from individuals and corporations. The scheme allows donors to remain anonymous while the State Bank of India (SBI) serves as the sole issuer of these bonds. 

The anonymity clause has sparked a heated debate, with critics arguing that it hampers transparency in political funding. On the other hand, supporters of the scheme have maintained that it protects the privacy and security of donors.

The Supreme Court's Intervention

On February 15, 2024, the Supreme Court's five-judge Constitution bench, led by Chief Justice DY Chandrachud, declared the electoral bonds scheme unconstitutional. The Court stated that the scheme violated the right to information and freedom of speech and expression, as provided under Article 19(1)(a) of the Constitution. The Court argued that voters have a right to know the source of political funding to make informed decisions while voting. The government had previously defended the scheme as a means to promote transparency in political funding, but the verdict marked a significant shift in the Court's stance.

The SBI's Compliance Dilemma

Following the Supreme Court's order, the State Bank of India (SBI) was directed to furnish details of the political parties that received electoral bonds since 2019 to the Election Commission of India (ECI) by March 6, 2024. The ECI was then required to publish these details on its official website. However, the SBI sought an extension until June 30, 2024, to disclose the details of each electoral bond encashed by political parties. The bank cited the sheer volume of transactions involved and argued that it needed more time to compile the information. 

The Supreme Court's Rejection of SBI's Plea

On March 11, 2024, the Supreme Court dismissed the SBI's petition seeking an extension of time. Chief Justice Chandrachud noted that the information sought by the Court was readily available with the bank, thus dismissing the application for an extension. Senior advocate Harish Salve, representing the SBI, argued that the bank was trying to collate the information, which was initially intended to be confidential. However, Justice Sanjiv Khanna clarified that the bank was required to comply with the EC's instructions to reveal the details. The Court's decision underscored the importance of transparency in political funding and the need for institutions to uphold democratic principles.

The Aftermath and Reactions

The Supreme Court's decision has been hailed by various quarters as a victory for democracy. Congress President Mallikarjun Kharge welcomed the decision, stating that it is the first step towards exposing the corruption of the Modi government. 

Congress leader KC Venugopal also praised the Court's order, saying it protected Indian democracy from the "devious machinations" of the current regime. However, there were also voices of dissent, with some arguing that the ruling could have unintended consequences for political parties and donors.

The Supreme Court's ruling on electoral bonds is a significant step towards ensuring transparency in political funding. By upholding the right to information, the Court has reinforced the democratic principle that voters have the right to know who funds political parties. 

The SBI's compliance with the Court's directive will be closely watched, as it is expected to shed light on the financial transactions that have so far been shrouded in secrecy. The full implications of this judgment are yet to unfold, but it is clear that the Supreme Court's intervention has set a precedent for transparency and accountability in the political funding landscape of India.

It remains to be seen how political parties and donors will adapt to the new transparency measures and what impact they will have on the future of Indian democracy.