Today's Editorial

Today's Editorial - 21 March 2024

India’s voters deserve a bond — of probity

News Excerpt

Recently, the Supreme court has directed the state bank of India to disclose electoral bond data which highlighted the transparency in the election process.


  • In the Indian democratic system elections are the base of democracy but there were issues related to corruption and malpractices in the election process.
    • The cause for the problem was stated to be donors’ “reluctance in donating by cheque or other transparent methods as it would disclose their identity and entail adverse consequences”.
  • As a solution, the Finance Minister proposed a reform in union budget 2017-18, the Electoral Bond Scheme (EBS), which “will bring about greater transparency and accountability in political funding, while preventing future generation of black money”. 

Electoral Bond Scheme (EBS):

  • The electoral bond scheme was introduced in 2018 and allowed the purchase of bonds at any State Bank of India (SBI) branch in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore. 
  • They could be bought through a KYC-compliant account with no limit on the number of electoral bonds that a person or company could purchase.

Before EBS:

  • There can be no gainsaying that political parties — the “essential ingredient of a multi-party Parliamentary democracy” — were surviving on contributions less than ₹20,000 each that did not require a disclosure of the identity of the contributors. 
  • This was how black money was allegedly finding its way to the accounts of political parties that enjoyed income-tax exemption. 
  • The fact that crores of rupees were spent during elections before and after the EBS is a separate and serious malaise that no law has been able to cure. 
  • The EBS too has not succeeded in this despite its stated objective. Thus, while political parties have been enriched through the EBS, money used in election campaigns may have still not changed colour.

Issues with Electoral bond scheme

  • The fact that crores of rupees were spent during elections before and after the EBS is a separate and serious malaise that no law has been able to cure. The EBS too has not succeeded in this despite its stated objective. 
    • Thus, while political parties have been enriched through the EBS, money used in election campaigns may have still not changed colour.
  • There is no doubt that the EBS created a ‘clean’ channel for funds to flow from the donor’s bank account to the political party’s bank account. 
    • The questionable presumption is that since funds used to purchase the bond are drawn from an account in a designated bank, the source of those funds is also ‘clean’. 
    • The Supreme Court observed that a similar channel existed, and still does, in the form of the Electoral Trusts, which is more transparent.
  • The information that the State Bank of India has disclosed so far shows that many purchasers bought bonds that seem to be disproportionate to their business income. 
    • There are obvious questions about the legitimacy of the sources of the funds being used for the purchase. 
    • It cannot be said with certainty that the funds that reached the designated account of the political parties were of the same “colour”. 
    • There were no safeguards to protect the so-called clean channel from being contaminated.
  • However, the real twist in the tale is that according to Section 7(4) of The Electoral Bond Scheme, 2018, the information furnished by the buyer “shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency”.
    • It is being said by the ‘designers’ of the EBS that the bank could not have legally kept any record of the secret number on the bond issued to the purchaser (in keeping with the provision of anonymity enshrined in the EBS). 
    • If this is the case, it would be almost impossible to establish any link between purchaser and recipient.

Pertinent questions

  • Will this limited information with the SBI, when disclosed to an enforcement agency, reveal the identity of the purchaser but limit the scope of the investigations only to the sources of funds? 
  • Does this not rule out the possibility of providing the donor-political party link, thereby eliminating the clue that would be vital to probe allegations of a quid pro quo? 
  • Does it mean that the EBS created fiction — of the enforceability of the law and the accountability of the bank towards the court and the law enforcement agency? 
  • But finally, does not the ‘confidentiality clause’ apply to “information submitted by the purchaser”, which was to be kept “undisclosed till asked for’? 
  • How could it mean not maintaining a record in order to fulfil its obligation to enforce the law of the land? 
    • If the SBI did not maintain any record, on what basis did it ask for time to collate information on the bonds that would link both the parties?

Arguments in against the EBS:

  • Sordid revelations that keep pouring from the disclosure of details about the purchasers and recipients of electoral bonds confirm the early apprehension of sceptics that the anonymous political funding scheme will have undesirable consequences.
  • The argument that waiver of the rule that political donations can be made by companies only up to a certain percentage of their profits will render the scheme illegal has been proved right. 
  • They argued that fears that shell companies and loss-making entities may be used to buy the electoral bonds and donate them to parties seem to have come true.

Argument in favour of EBS:

  • Defenders of the EBS have argued that if there are doubts about the sources of the funds used to purchase the bonds, this would be easy to investigate.
  • Many proponents of the EBS have criticised the Court for not suggesting a ‘less worse’ method of political funding and dragging political parties to the “dark alleys” of black money.
  • Defenders argue that it was/is for the courts to decide the future course because Parliament has the mandate to find a solution and has ‘superior’ wisdom in making laws (as was seen in the case of the appointments of the Election Commissioners).

Way Forward:

  • A reasonable way forward can only be found through a well-meaning consultative process and not through court fiats, or laws and policies crafted in secret to deal with complex and vexed problems. 
  • As India is the mother of democracy, voters deserve better. They deserve a bond of probity.
    • To provide them this bond, the government should ensure transparency and try to make such laws which can ensure voters that the voting process and political parties are fair and corruption-less.
  • There are a few basic tenets of good laws and public policies: lack of ambiguity, enforceability, predictability, and accountability. 
    • All laws and policies are framed with the purpose of addressing a public issue with a view to improving the situation from when the problem was identified. 
    • Therefore, the outcome should be evaluated keeping in mind the objectives behind that law or policy.


Electoral bond issue has highlighted the issues related to corruption in politics, election process and crony-capitalism. To ensure transparency and free and fair elections the government should look into this matter and also voters should also be taught about their rights and responsibilities.