Electoral Bond Verdict: A Year Later – Transparency vs. Confidentiality
- Policy Corner JSGP
- Mar 18
- 6 min read
By Shishti Srivastava
The Supreme Court’s 2024 Verdict striking down the Electoral Bond Scheme reaffirmed the electorate’s right to transparency in political funding. This article explores the ruling’s constitutional basis, balancing Article 19 and Article 21, and its implications for democracy. By prioritizing accountability over donor anonymity, the judgement strengthens electoral integrity and fair governance.
India’s democratic structure is firmly grounded in the Fundamental Rights incorporated in Part III of the Constitution. These serve as both guiding principles and protective shields that uphold democratic values. Among them, Article 19 and Article 21 play a crucial role in safeguarding individual freedom and ensuring governance accountability. This article delves into the symbiotic relationship between these rights, the Right to Information (RTI) Act, and the Electoral Bond Scheme, unravelling their implications on transparency, and accountability. It also explores how the implications of the EBS extend beyond political funding.
Article 19: Right to Freedom
Article 19 is considered as the basic doctrine or structure of the Indian constitution. Enshrining freedoms of speech, expression, assembly, association, movement, and residence, particularly Article 19(1)(a) guarantees the freedom of speech and expression and is considered as fundamental pillar of Democracy.
In the State of U.P. v. Raj Narain (1975), the Supreme Court expanding the scope of Article 19, and particularly Right to Know, observed that it is derived from the Freedom of Speech. The Court further, highlighted that the people of the country have a Right to know about every public act that is been carried out by the public institutions or authorities of the country. This decision laid the groundwork for understanding transparency as a democratic element, reinforcing the principle that an informed electorate is vital for a functioning democracy.
Article 21: Safeguarding Life and Liberty
Article 21 guarantees the right to life and personal liberty. Through landmark judgments like Kesavananda Bharati v. State of Kerala and Maneka Gandhi v. Union of India, the judiciary has fortified this article as a wall against arbitrary state actions, ensuring individual freedom and dignity.
In the Justice K.S. Puttaswamy (Retd.) v. Union of India (2015), (famously known as Right to privacy and Aadhar card case) the court held that Right to Privacy is an integral part of Right to Life under Art. 21 and includes the right to keep the personal information private. However, it is pertinent to note over here that despite being an essential fundamental right, Article 21 is not absolute or untouchable as, in certain cases, a reasonable restriction could be placed on it.
The Right to Information Act in India
Enacted in 2005, the Right to Information (RTI) Act is one of India’s most significant legislative measures for promoting transparency and accountability in governance. The act enables the citizens to seek any accessible information from a Public Authority and makes the Government and its functionaries accountable, responsible and answerable to the people. However, despite its effectiveness, the RTI Act faces challenges such as delayed responses, bureaucratic resistance, and concerns for whistleblower safety. A key issue in the RTI framework is the extent to which transparency should be enforced. While the act promotes openness, it also includes exemptions for national safety and sensitive government functions. This debate over the limits of transparency is crucial when evaluating the legitimacy of the Electoral Bond Scheme.
Electoral Bond Scheme – Case Analysis
Introduced in the year 2018, the Electoral Bond Scheme aimed to reform political funding by enabling financial contributions through banking channels. However, it had the provision of keeping the identity of the donor private or particularly anonymous to the public.
Under the EBS, specified branches of State Bank of India (SBI) were authorized to sell electoral bonds in denominations ranging from INR 1,000, 10,000, 1,00,000, 10,00,000 and 1,00,00,000. As per the Scheme, the bonds were to be sold in the first ten days of January, April, July and October each year. The identity of the buyer remains unknown to everyone, except the bank, who was required to record the KYC details of the purchaser. Only Political Parties that secured 1 % of the votes in the last general elections to the House of People/Lok Sabha or a Legislative Assembly/Vidhan Sabha were eligible for leveraging the donations. Furthermore, recipients had to encash the bonds within 15 days, failing which the funds would be transferred to the Prime Minister’s Relief Fund.
While delivering its landmark decision on 15 February 2024, in the Association for Democratic Reforms (ADR) v. Union of India 2024, the Supreme Court unanimously declared the Union's 2018 EBS unconstitutional. The five-judge bench, led by Chief Justice D.Y. Chandrachud, struck down the Electoral Bond Scheme as unconstitutional on the grounds that anonymous electoral bonds are violative of Article 19(1)(a) of the Indian Constitution.
The central debate about the Electoral Bond Scheme is the Respondent’s argument for the Donors Confidentiality and Petitioners assertion on the Right of Voter to know about the political funding under RTI. However, the argument of the respondents was outweighed by the concerns raised by the petitioners. As mentioned above : Article 21 is not absolute and restrictions could be placed on it.
The petitioners (ADR) argued that the scheme violates the Article 19(1)(a) of the voters who are guaranteed by the law to have all the relevant information with respect to public affairs and government. They further asserted that the freedom to vote in the positive sense means casting vote based on complete and relevant information about the political parties and information with respect to their source of funding is a crucial aspect of it. They also argued that even though donor’s right to privacy has to be maintained, on a balance, the reasons of free and fair elections should be weighed more than the individual confidentiality. They argued that RTI under Art. 19(1)(a) could be placed under certain restrictions on the grounds mentioned under Article 19(2), however donor’s privacy and curbing black money does not fall under that.
The Court noted that the scheme created an information asymmetry, allowing the ruling party access to donor details while keeping voters uninformed. It was highlighted that the scheme also fails to address the problem of black money (which it intended to address otherwise) as it still allows the donations in cash. Moreover, the scheme allows for the corporate funding which is violative of the Constitution as corporates are not citizens and cease to have rights under Article 19. They raised concerns over the increased corporate funding and inefficiency of the Scheme in curbing the Black money and underlined the fact that corporate funding without the disclosure of the donor’s identity would also lead to violation of the “one person one vote” as few would influence the policies for all, highlighting the effects of economic disparity.
The verdict also commissioned the SBI to provide the complete data of electoral bonds purchases with the name and details of buyers and the parties for which the bonds were purchased from April 2nd, 2019, onwards to the ECI. The ECI was further directed to make the information available on its website within a week of being presented with. Hence through the verdict the court addressed the long-standing problem of policies getting influenced because of corporate funding.
Conclusion
The Court’s decision on upholding the Right to Information Act with its linkages with electorate’s right to information as fabricated under the Article 19(1)(a) was touted as one of the landmark judgements of the recent times. The verdict, while upholding the spirits of Right to Information also underscored the essentiality of having a transparency in the electoral process and how it should be the fulcrum of a healthy democracy as the funding influences the policy, governance and agendas. A year later the verdict stands as a lighthouse for the cases involving transparency and confidentiality.
About the Author
Shristi Srivastava is a final year Masters in Public Policy student. Having done her Bachelor's in Political Science, Shristi's interests revolve around Gender, SDG's, Caste and Comparative Politics and the intersection of politics and policies at the national and international level. She is an avid reader and believes in inclusive and equal society.
References –
1)The Electoral Bond Judgement of Supreme Court (2024)
2) Supreme Court Observer: Electoral Bonds. (2024)
3) Manupatra: Supreme Court strikes down the Electoral Bond Scheme as Unconstitutional. (2024)
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