The electoral bond verdict needs political resolve
The judgment of the Supreme Court in Association for Democratic Reforms v. Union of India that banned the Electoral Bond System (EBS) is also a treatise on the subject. Chief Justice D Y Chandrachud has nicely explained the complex legal issues in his characteristic style so that anyone concerned with India’s democratic polity can read it and get into various dimensions of the topic.
It is an instance of constitutional adjudication rooted in contemporary economic and political realities. It is also a case of legitimate judicial activism of our times. The judgment has reinvented the idea of political equality and thereby reminded us about the principle of socialism, a forgotten word in the Constitution’s Preamble, in the arena of electoral politics.
To facilitate unlimited and opaque corporate funding to political parties, Parliament altered the relevant enactments. Section 182 of the Companies Act was amended and the ceiling limit on corporate funding and the requirement to show the particulars of contribution were done away with.
The amendment to the Income Tax Act said that the political parties need not even maintain a record of contributions. Modifications were made in other enactments like the Reserve Bank of India Act and the Representation of the People Act. Thus, a new regime of dubious economy came into being, which controlled not only the elections but the politics of the country.
The term ‘electoral bond’ is a misnomer as the funding was not limited to elections. It was a device for unlimited and secret enrichment of political parties. The Centre defended it. It said that the citizens don’t have any fundamental right to know how the political parties are funded. It said that the EBS was intended to curb black money and to make the transactions “transparent”. The “transparency” was limited to the government, and the parties to the bond.
The public who voted the politicians to power was fenced out. According to the Centre, the EBS being a policy matter was beyond the purview of judicial review. The arguments on behalf of the Centre were rejected by the court almost entirely. Among other things, the court said that often the “contributions made as quid pro quo transactions are not an expression of political support”.
The analogy of the EBS with the secret balance system drawn by the Centre also was rejected by the Bench. The court held: “Unlimited contribution by companies to political parties is antithetical to free and fair elections because it allows certain persons/ companies to wield their clout and resources to influence policy making”.
No one has a case that before the introduction of the EBS the politics in India was clean and not contaminated by corporate funding or black money. The problem with the EBS, however, is that it legitimised and perpetuated the impurities in an enormous and limitless way. It enriched a few political parties unequally. These parties monopolised the funding in such a way that they could influence the uninformed voters by sheer propaganda and false narratives. “One person-one vote” became a mirage and political equality, a feature of bygone times.
The legal defence of the EBS by the government was turned down by the court by applying the doctrine of proportionality and the principle of manifest arbitrariness. That the EBS created a serious threat to the country’s functional democracy was an empirical reality. The impact of the Finance Act, 2017 on the cardinal laws of the country was shocking that even large-scale money laundering in the guise of EBS was legalised and hushed up. The nexus between the EBS and the horse-trading of elected candidates also might require a probe.
The verdict was not merely on the citizen’s right to know the political parties and their candidates. It was also a total lack of constitutional legitimacy in the very system of unlimited corporate funding of political parties. Henry Ward Beecher famously said “it usually takes a hundred years to make a law, and then, after it’s done its work, it usually takes a hundred years to be rid of it”. The impact of the EBS on our political economy might stay on for many years to come.
Efforts to turn the apex court verdicts upside down are not uncommon in the country’s history. Curiously, one of the latest incidents is also from the realm of electoral reforms. Last year, the Supreme Court pronounced the verdict in Anoop Baranwal v. Union of India, which directed that the committee that selects the Election Commissioners should include the Chief Justice of India (CJI) also.
The court wanted to put an end to the domination of the ruling dispensation in choosing the election commissioners, which was inherently unfair. Soon after the verdict, the Centre came up with a new legislation that contemplated a selection committee consisting of the prime minister, a Union cabinet minister, and the leader of the opposition. The CJI was excluded and the dominance of the government of the day in the process was effectively retained. One can only have a sense of cautious optimism about the present verdict as well.
True that the EBS per se does not abolish the black money culture in India. Even when there was EBS, other dubious transactions did prevail. Therefore, the criticism that the judgment would revive the flow of black money is clearly unfounded. To curb black money, we need radical measures and political will. No court verdict can ever substitute a political process.
Electoral reforms also are part of larger political reforms and therefore the Supreme Court verdict needs to be taken forward politically. It is essential to eradicate the flow of big money through public funding of elections in a plausible way which, however, should not burden the taxpayer disproportionally. In the age of advanced digital facilities for communication, spending too much on elections is a sinful luxury.
The concerns on the prevailing system of electronic voting machines (EVM) also should be immediately addressed and resolved. There is a need to further regulate the inflow of foreign funds by strict implementation of the Foreign Contribution (Regulation) Act (FCRA) by clearing the loopholes. It is also important to understand that the quid pro quo phenomenon is not limited to EBS. The nation needs eternal vigilance against the unholy nexus between the political power centres and the capital. Elections are essential in a democracy. But we also need to democratise the elections. That can happen only with the political education of the voters.
Kaleeswaram Raj
Lawyer, Supreme Court of India