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India’s Supreme Court has struck down the country’s main legal mechanism for corporate and individual donations to political parties, ruling that “electoral bonds” were unconstitutional in a decision seen as unfavourable to Narendra Modi’s party ahead of an upcoming national election.
A five-judge bench headed by chief justice DY Chandrachud made the ruling on Thursday in response to petitions brought by opposition politicians and a non-governmental organisation.
Modi’s Bharatiya Janata party is widely expected to overcome a divided opposition to secure a third five-year term in a staggered election to be held during April and May.
The Supreme Court ruled that the funding scheme violated the right to information and could lead to “quid pro quo” arrangements between donors and political parties. It ordered the State Bank of India, which oversees the scheme, not to issue any more electoral bonds, effective immediately.
Electoral bonds have long been attacked by civil society groups for allowing corporations and individuals to donate anonymously and for permitting unaccounted-for money to reach political parties, including from abroad. Political parties were required to declare how much money they had received through electoral bonds, but not from whom.
Critics also argued that the system, though anonymised, favoured the BJP because the government could access information about donors via the SBI, which kept an audit trail of donations. This could also disincentivise donations to opposition parties, they said.
The Indian National Congress, India’s largest opposition group, has been canvassing the public for individual donations ahead of the upcoming vote because of a party funding system it claimed was opaque and biased against them.
Analysts and leftwing critics of the Modi government praised Thursday’s court decision. “This is a welcome judgment,” said Nitin Sethi, founding editor of the Reporters’ Collective, which has reported extensively on the electoral bonds scheme. “It undoes the BJP government’s attempt to legalise corruption and weaken Indian democracy.”
While more remained to be done to reduce the hold of big business on Indian electoral processes, Sethi added, “for now we have undone at least some damage”.
The BJP introduced electoral bonds in 2017, presenting them as a way to cut back on the corruption and cash bribes it says flourished under former Congress-led governments before Modi took power in 2014.
However, the electoral bonds system, one analyst said, had been “breaking the opposition”, especially the Congress party, and added that “no one knew who was funding whom”.
“It’s a historic verdict,” said Zoya Hasan, professor emerita of political science at the Centre for Political Studies at Jawaharlal Nehru University in New Delhi.
“It’s a big blow to the BJP because so much of their political control has depended on money power and much of this money has come through anonymous electoral bonds.”
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