Why the SC’s Electoral Bonds Order Leaves a Lot to be Desired

Easy excuses for parties, opacity of sealed cover, no clarity for 2019 elections could make the order ineffective.

On Friday, the Supreme Court delivered an interim order refusing to stay the electoral bonds scheme – while at the same time directing all political parties to provide details of donations received through electoral bonds to the Election Commission by 30 May.

This order does not affect the broader challenge to the constitutionality of the scheme, which Chief Justice Ranjan Gogoi noted is a “weighty” issue and requires further time and arguments.

Interim measures had been requested by the petitioners on the basis that the sale of these anonymous bonds during election season affected the level-playing field that is supposed to exist at this time, since one political party appears to be the beneficiary of most of the bonds purchased. They also argued that voters should know who is funding political parties at this time when they need to vote for political candidates.

As a result, they’d asked the court to stay the electoral bonds scheme, or at least order the State Bank of India (which sells the bonds) to disclose details about the bonds.

Unfortunately, the Supreme Court’s order on Friday, while directing disclosure of details, could end up being an ineffective one, neither ensuring transparency and the right of voters to know, nor helping to ensure a level-playing field during this election. 

Here’s why.

1. What if the Political Parties Claim Ignorance About Identity of Donors?

• The political parties are being told they have to submit the details of the funding they’ve received through electoral bonds, including the name of the donors, the amounts donated and when the donations were made.
• However, the whole point of these bonds is that they are anonymous. There is nothing on the bond to show who has bought it, and as bearer instruments, anyone could presumably hand it over to the political party.
• Parties can therefore claim ignorance about who the actual donor, ie the person who bought the bond, is. All they have to say is that they received the bond in the post or from a messenger – they’ve not been under any obligation to trace the source when receiving bonds till now, so they have a readymade excuse.
• Given the bonds are meant to protect anonymity of the donor, the parties could even foreseeably claim they can’t get information about the identity of the donors for bonds received after the order.
• Of course, given the crores of money involved, it is difficult to believe the parties don’t know who gave them the money, but chasing up on this is now purely up to the Election Commission.

2. The Opacity of the Sealed Cover

• The court has also directed the information provided by the parties to the Election Commission to be handed over in a sealed cover. This means (unless the court says otherwise) that the information about donors will not be available to the public.
• This defeats the whole purpose of transparency in political funding, which is to let voters know who is funding political parties and candidates, so that they can properly exercise their right to vote, and their freedom of expression. This is the crux of the argument against electoral bonds, but is lost thanks to the usage of the sealed cover.
• It is unclear why the information needs to be submitted in a sealed cover since the Election Commission already publishes details on its own website about funding of political parties, including the audit reports submitted by these parties for each financial year.
• The dangers of submitting information in sealed covers was observed in the Supreme Court’s Rafale judgment from December 2018. The CJI had in that case asked the Centre to submit details about the procedure followed for the Rafale deal, it’s pricing and the offsets process in sealed covers, and the court used this information in its judgment.

However, several questions have arisen over the accuracy of the government’s submissions in these sealed cover notes, from an incorrect statement that the CAG report on the deal had been made public to conflation of the different Ambani groups. Revelations about the deal by N Ram in The Hindu also indicate the government withheld details of the process from the court.

• Worst of all, we will have no idea what excuses are adopted by the parties to avoid submitting information (since it will all be in a sealed cover) and we will not know what the Election Commission says in response.

3. No Clarity for Voters or Level-Playing Field During This Election

• Another sticking point with the order is the deadline given to the political parties of 30 May. This is one week after the election results will be declared, 11 days after the final day of polling.
• This means voters in this general election, the most important exercise of democracy in this country for at least the next five years, have an incomplete picture of what is making the political parties in India tick.

The source of political funding can seriously influence the policies adopted by the government of this country, could help understand the motivations behind legislation and government schemes. If voters are to make an informed choice at the elections, they need to know these things, but thanks to electoral bonds, they don’t.

• The level-playing field is also at serious risk. Comparing data from the Election Commission’s website and information revealed in an RTI by SBI, we know that the BJP received 95 percent of the donations made through electoral bonds in March 2018. It is widely believed that this number is consistent with sales in subsequent quarters as well (for which information is not publicly available).
• With the bonds set to remain on sale for a few more days in April and in May as well, this could mean the BJP have a huge advantage over other parties when it comes to election spending – and advantage that will not be affected by the court’s order and will not even face interrogation till at least 30 May, after the elections are over.

You can read the full order by the Supreme Court, including a direction to reduce the notified time for the sale of bonds by five days below:

Electoral Bonds Interim Order SC 12.04.2019 by The Quint on Scribd