Selective Confidentiality in Electoral Bonds May Not Suffice: SC

Primary Source: The Hindu

Relevance: GS2, Indian Polity, Electoral Bonds, Politics, National Elections, Judiciary, Justice and Rights, Law, Governance, Constitutional Rights, Role of the judiciary, Election Commission, Fundamental Rights, Reasonable Restrictions, Judicial Review

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Why in the news?

• The Supreme Court has criticized the electoral bonds scheme for providing only "selective confidentiality."
• Concerns were raised about the potential for the ruling party to discover donors to opposition parties, putting them at risk of being targeted by state investigative agencies.

Supreme Court's Observations

• The scheme offers "selective confidentiality" which does not protect the identities of donors to opposition parties from the ruling party.
• The ruling party could potentially have ways to uncover the identities of the opposition's donors, putting them at a disadvantage.
• There is a concern that the ruling party might not face the same scrutiny regarding its own donors, leading to an uneven playing field between the ruling and opposition parties.
• The Court was not convinced that the State Bank of India, or any bank, had a statutory obligation to maintain donor confidentiality, questioning the presumption that banks will keep this information confidential by default.
• Chief Justice D.Y. Chandrachud expressed that the problem with the scheme is its opacity and the lack of a level playing field for political parties.

What is the Government's Defense?

• The confidentiality of the donors' identities is a key element of the electoral bonds scheme, which is intended to protect donors from potential reprisals.
• Maintaining donor anonymity is essential to prevent political contributions from reverting to the earlier practices where black money featured prominently.
• Prior to the introduction of electoral bonds, contributors were converting legitimate funds into black money to keep political donations anonymous and avoid retribution from rival parties.
• The Government implied that the scheme was designed to clean up the process of political donations, by reducing the flow of unaccounted cash into the political system.
• The scheme was portrayed as a step towards transparency and accountability, albeit with the emphasis on protecting donor identities to encourage legitimate funding.

What are Concerns Regarding Transparency?

• Lack of Transparency for Opposition: The scheme allows the ruling party to potentially access information about the donors to the opposition while keeping their own donors concealed, which could discourage fair political competition.
• Uneven Playing Field: The selective confidentiality might give the ruling party an unfair advantage by having knowledge of the opposition's funding sources without the opposition having reciprocal information.
• Statutory Obligations: Chief Justice D.Y. Chandrachud raised questions about the obligations of the State Bank of India, questioning whether there is a statutory duty to ensure the confidentiality of donor identities, which is presumed to be guaranteed by the bank's role as a trustee.
• Scheme's Opacity: The scheme was criticized for being opaque, suggesting that it hides the flow of money in politics rather than making it more transparent.

Way Forward

Enhancing Transparency

• Establish a statutory framework that mandates transparency and confidentiality in political donations.
• Create or amend laws to require political parties and donors to disclose contributions over a certain threshold.
• Strengthen auditing requirements for political parties and implement robust reporting mechanisms.

Balancing Confidentiality with Accountability

• Design mechanisms that protect donor identities from public disclosure while making them available to an independent regulatory body.
• Set limits on the amount that can be donated anonymously to prevent undue influence by a single or a group of donors.

Strengthening Democratic Institutions

• Establish or empower an independent electoral commission to oversee the electoral bond transactions and ensure adherence to legal requirements.
• Engage in a broader reform of political finance to address not just electoral bonds but also other forms of political contributions.

Judicial Review and Legislative Action

• Continue judicial scrutiny of the electoral bonds scheme to ensure it aligns with constitutional principles and democratic fairness.
• Encourage legislative debate and expert consultations to rethink and redesign the scheme in light of the criticisms.

Public Engagement

• Promote civic education campaigns to inform the public about the importance of transparency in political funding.
• Involve civil society, legal experts, and other stakeholders in discussions about improving the electoral financing system.

Conclusion

The Supreme Court pointed out the lack of transparency and fairness in the electoral bonds scheme, suggesting it provides the ruling party with an unfair advantage over the opposition. The Court suggested the need for a more transparent and accountable system that does not suffer from opacity and offers a level playing field for all political parties.

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MCQs

Question: Consider the following statements: (UPSC 2017)

1. The Election Commission of India is a five-member body.
2. Union Ministry of Home Affairs decides the election schedule for the conduct of both general elections and by-elections.
3. Election Commission resolves the disputes relating to splits/mergers of recognized political parties.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 2 and 3 only

(d) 3 only

Question: Consider the following statements: (UPSC 2020)

1. According to the Constitution of India, a person who is eligible to vote can be made a minister in a state for six months even if he/she is not a member of that state.
2. According to the Representation of People Act,1951, a person convicted of a criminal offence and sentenced to imprisonment for five years is permanently disqualified from contesting an election even after his release from prison.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Question: Which one of the following Schedules of the Constitution of India contains provisions regarding anti-defection? (UPSC 2014)

(a) Second Schedule

(b) Fifth Schedule

(c) Eighth Schedule

(d) Tenth Schedule