Data published by the Association for Democratic Reforms played a vital role in assessing electoral bonds’ impact

Last week, the Supreme Court ruled the electoral bonds Scheme unconstitutional, saying that the anonymous influx of funding to political parties, especially from corporations, hinders democratic legitimacy. The unanimous judgment squashed the government’s argument that the scheme is transparent because donors have to go through official banking channels to purchase these bonds, despite their identity being hidden.

The Bench agreed that the voters’ right to know was violated, by the anonymity electoral bonds provide. In Justice Sanjiv Khanna’s opinion, “access to information which can materially shape the citizens’ choice is necessary for them to have a say in how their lives are affected.” This meant Solicitor General Tushar Mehta’s argument that no black or unaccounted money can be used for bonds was not strong enough as, “denying voters the right to know the details of funding of political parties would lead to a dichotomous situation.”

Data from the Association for Democratic Reforms (ADR), one of the petitioners in the case, shows that the share of unknown sources of income has only increased after the introduction of the electoral bond scheme, in direct contradiction to the government’s claim. The ADR categorises the income of political parties into two primary categories: known and unknown. Known income is further divided into two subtypes — voluntary contributions over Rs. 20,000 with donor details provided to the Election Commission of India, and other known sources of income such as the sale of movable and immovable assets. The unknown income encompasses voluntary donations under Rs. 20,000 where donor details remain undisclosed.

The transition year FY18, the year in which the scheme was introduced, was not considered for analysis. The BJP’s share of unknown income increased from 58% to 68% in the period, while the Congress’ remained at around 80%.

A reason behind the call for transparency is that a bulk of these donations were made by corporations. This, gives unfair power to a certain section. “... [The] amendment to Section 182 by permitting unlimited corporate contributions (including by shell companies) authorises unrestrained influence of companies on the electoral process. This is violative of the principle of free and fair elections…”, the court observed. Justice Khanna noted that the 255th report by the Law Commission of India states that when importance is given to certain groups, it violates, “the right of equal participation of each citizen in the polity.” ADR data shows that the BJP received a lion’s share of corporate donations in the FY17 to FY22 period — ₹3,300 crores or 84% of them (Chart 2).

numbers belonged to the Rs. 1 crore denomination. The share of other denominations — Rs. 10 lakhs, Rs. 1 lakh, Rs. 10,000 and Rs. 1,000 — in electoral bond sales, paled in comparison as shown in Chart 3.

The court observed that this data pointed to the influence of corporates in the scheme, as not many individuals can afford to donate in crores. Finally, the court also observed that a bulk of the donations from electoral bonds were done in favour of the BJP. ADR data shows that in the FY18-FY22 period, the BJP earned Rs. 5,272 crore through electoral bonds — 57% of the money donated to all parties in this route (Chart 4).