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Poll Bonds: As India's Electoral Democracy Remains Under Challenge, What Will Be SC’s Next Move?

How the court will look into the discussed evidence of alleged quid pro quo arrangements may well go on to define the future of India’s electoral democracy and transparency in political funding.
Illustration: The Wire

Fresh data on the electoral bonds purchase patterns emerged over the weekend with the Election Commission of India (ECI) publishing details of bonds sold and encashed before April 12, 2019. 

According to a report by the Quint, “The new figures revealed that the Bharatiya Janata Party (BJP) received Rs 2,658.35 crore in electoral bonds between March 9, 2018 and April 11, 2019. Congress party received Rs 530.1 crore, Trinamool Congress got Rs 97.28 crore, and the Biju Janata Dal (BJD) got Rs 239 crore”.

ECI had earlier uploaded data provided to it by the State Bank of India (SBI) on electoral bonds purchased and encashed since 2019 onto its website, a day before its court-ordered deadline (one can see the excel link here for accessing the data for conducting an independent analysis). 

The incumbent Bharatiya Janata Party, from March 2018 to January 2024, has seen more than 50% of its overall political party funding coming from electoral bond donations made by private companies.

Between March 2018 and April 2019 alone, the BJP got Rs 2,658.35 crore out of electoral bonds worth Rs 4,002 crore. A similar trend can be seen for the total number of bonds sold since March 2018, where the BJP, with Rs 8,718.85 crore, got 50% of all funding received via the bonds.

All this has happened while favouring private company donors, in addition to the nature of fiscal policy benefits – offered via generous tax cuts among other things – provided to private firms over the last 10 years of the Modi government. This is happening at a time when the ‘middle class’ is increasingly shrinking and and ‘low-income classes’ have struggled amidst rising prices and increasing joblessness.

Maybe the full picture of the electoral data-legalised corruption saga isn’t out yet. 

A critical point most investigators are arguing now is that SBI hasn’t shared the unique identification number of the electoral bonds’ purchase data. 

This number, as explained and reported by The Wire, often referred to as the “matching code”, could have established a connection between the purchaser of the bond and the beneficiary political party. 

The court has now issued a notice to SBI on its failure to share these numbers.

Meanwhile, there are serious questions to be raised from interpretation of available electoral bonds data. The Supreme Court has a lot to do in this regard to force agencies to investigate and make the ruling party more accountable for its actions, especially where there is evidence of a quid pro quo between them and donors.

The apex court, in its earlier order, had clearly observed that the political donations made through electoral bonds purchase data could determine the basis of quid pro quo arrangements between (donating) companies and political parties in power. We see this more clearly now.

As explained here, and through the excellent data mining centres of newsrooms in independent media platforms, it has emerged that private company donors like Future Gaming group and Megha Engineering have been under the lens of the enforcement agencies.

A more detailed mapping exercise done by CA Himank Singla shows the volume of private company donations made by firms like Wonder Cement Limited, Serum Institute of India, Qwik Supply Chain Limited, Vedanta Limited, ArcelorMittal Group.

These details are not only striking but mind-numbing when one assesses the decaying state of ‘democracy’ in India. 

The Modi government, which champions itself on caring for spirited nationalism and celebrating India as the ‘mother of democracy’, appears to have ‘legalised corruption’ through the electoral bonds scheme, reflecting the worst case of democratic ethics for any party in power. 

If all electoral bonds data were to be made accessible, the extent of ‘legalised corruption’ in India’s political funding scene would be laid bare.

It’s already clear how political funding seems to be driven by a direct transaction between those in power and in business. An image of deeply entrenched crony capitalism in India couldn’t have seen a more ugly display. 

A larger, more assertive role for SC’s judicial intervention 

Gautam Bhatia, in his recent book Unsealed Covers, has written about how the Supreme Court pursued a practice of “judicial evasion” under the Modi government, while transitioning into an executive’s court, from being an anti-majoritarian court of late. The court, under the last few Chief Justices, failed to ask tough questions or challenge the Modi government while doing its bit in passing more ‘pro-government’ judgments. 

However, its recent order in the electoral bonds case  stands in stark contrast to this attitude.

How the court will look into the discussed evidence of alleged quid pro quo arrangements may well go on to define the future of India’s electoral democracy and transparency in political funding.

Independent media platforms have also done a phenomenal job in exposing the level of corruption facilitated by the electoral bonds scheme (see here for a thread).

The court has the information it needs to assert its power, if it wants to scrap the electoral bonds scheme and call (even if possible) for a delay to the upcoming Lok Sabha election – which is just a few weeks away. 

Given how most parties in this election, especially the BJP which has the largest share of funding from electoral bonds, have sourced their funds, there is a strong case for the apex court to exercise its discretion in upholding the constitutional integrity of the electoral process and not letting the Lok Sabha polls happen unless a more transparent funding process is installed. 

The real question is whether the court, which raised critical questions on the electoral bond scheme, will challenge SBI to release more data and then subsequently question the BJP in the way it has engaged with its donors. Can this lead to the ruling party being disqualified from contesting in the upcoming national elections even if the scheme isn’t scrapped? Or, is there a juridical case for setting a strong deterrence, in case of a political party, for legalising corruption through a funding scheme?

As one waits for the court’s next move and whether it will choose to act against those found guilty, what’s clear is how India’s electoral democracy at this moment remains challenged from an enlarged trust deficit and an illiberal turn like never seen before. 

Deepanshu Mohan is Professor of Economics, Dean, IDEAS, Office of InterDisciplinary Studies, and Director, Centre for New Economics Studies (CNES), O.P. Jindal Global University. He is a Visiting Professor at the London School of Economics and a 2024 Fall Academic Visitor to Faculty of Asian and Middle Eastern Studies, University of Oxford. He has held Visiting Professorships with University of London’s Birkbeck College (UK), University of Ottawa (Canada), Carleton University (Canada), Stellenbosch University (South Africa), FGV (Rio, Brazil) in the past.


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