BJP kitty grows 1.5 times to Rs 6,073 crore in first year after SC scrapped electoral bonds

The recent report indicating a significant increase in the Bharatiya Janata Party's (BJP) financial reserves to Rs 6,073 crore in the year following the Supreme Court's annulment of the electoral bond scheme brings the critical issue of political funding back into sharp focus. This development underscores the persistent challenges in achieving transparency in political financing, even after a landmark judicial intervention.

**Background Context: The Electoral Bond Scheme**

The electoral bond scheme, introduced through the Finance Act, 2017, was touted by the government as a measure to bring transparency to political funding by encouraging donations through banking channels and curbing the use of black money. Under the scheme, individuals and corporations could purchase these bearer bonds from the State Bank of India (SBI) and donate them to political parties. The identity of the donor was kept confidential, known only to the issuing bank. While the government argued this protected donors from harassment, critics, including the Election Commission of India (ECI) and various civil society groups, contended that it promoted opacity, facilitated quid pro quo arrangements, and allowed unlimited corporate funding without public scrutiny. The scheme effectively removed the cap on corporate donations (which was 7.5% of net profits) and exempted political parties from disclosing the source of funds received through electoral bonds.

**The Supreme Court's Landmark Verdict**

The legal challenge against the electoral bond scheme culminated in a unanimous verdict by a five-judge Constitution bench of the Supreme Court on February 15, 2024. The Court declared the scheme unconstitutional, citing its violation of the citizens' fundamental Right to Information, which is an integral part of Article 19(1)(a) (freedom of speech and expression). The Court ruled that the scheme curbed the voters' right to know about the funding of political parties, which is essential for informed electoral choices. It also struck down the amendments made to the Representation of the People Act, 1951, the Income Tax Act, 1961, and the Companies Act, 2013, which had facilitated the scheme. The judgment directed the SBI to disclose details of all electoral bonds purchased and redeemed since April 12, 2019, to the ECI, which subsequently made the data public.

**What Happened: Post-Scrapping Financial Growth**

The core of the news is that the BJP's financial kitty reportedly grew by 1.5 times, reaching Rs 6,073 crore, in the first year *after* the Supreme Court scrapped the electoral bond scheme. This is a crucial distinction: these funds were accumulated *following* the cessation of the electoral bond mechanism, not through it. This suggests that even without the electoral bond route, major political parties, particularly the incumbent, have robust alternative fundraising channels. These could include traditional modes like membership fees, small donations, sale of coupons, collections from public meetings, and direct corporate or individual donations within the legal framework (e.g., cash donations below Rs 20,000, which do not require donor disclosure, or larger disclosed donations).

**Key Stakeholders Involved**

* **Political Parties (primarily BJP):** As direct beneficiaries of the funding, they are central. Their financial health significantly impacts their electoral competitiveness and operational capacity.

* **Donors (Corporations and Individuals):** These entities provide the funds, often with implicit or explicit expectations. Their motivations and the transparency of their contributions remain a point of contention.

* **Supreme Court of India:** As the guardian of the Constitution, its judgment critically altered the landscape of political financing.

* **Election Commission of India (ECI):** The constitutional body responsible for conducting free and fair elections, the ECI plays a vital role in regulating political parties and monitoring their finances. It was a petitioner against the electoral bond scheme.

* **Citizens/Voters:** Their right to know about political funding sources is at the heart of the transparency debate, ensuring informed participation in democracy.

**Significance for India**

This development holds profound significance for Indian democracy. Firstly, it highlights the ongoing struggle for transparency in political funding. Despite a major legal reform, the ability of large parties to amass substantial funds persists, raising questions about the efficacy of current regulations and the potential for new opaque channels to emerge. Secondly, it underscores the critical role of money in elections. Massive funding enables extensive campaigning, media outreach, and logistical support, potentially creating an uneven playing field for smaller or newer parties. Thirdly, it reignites concerns about corporate influence on policy-making. If large sums are donated through less transparent means, the potential for quid pro quo arrangements, where policy decisions might be influenced by donors, remains a significant threat to good governance. Lastly, it emphasizes the need for robust regulatory oversight by the ECI and continuous public scrutiny to ensure accountability.

**Future Implications**

The scrapping of electoral bonds was a step towards greater transparency, but the continued financial growth of major parties signals that the journey is far from over. In the absence of electoral bonds, political parties might increasingly rely on other permissible but less transparent methods, such as cash donations below the Rs 20,000 threshold (which do not require donor disclosure) or other indirect mechanisms. This situation necessitates urgent electoral reforms to devise a new, constitutionally sound, and truly transparent political funding mechanism. Debates around state funding of elections, stricter caps on donations, and enhanced disclosure requirements for all types of contributions are likely to intensify. The ECI's role in monitoring and enforcement will become even more critical, requiring stronger powers and resources. Ultimately, the goal is to foster a system where political funding does not compromise democratic principles or public trust.

**Related Constitutional Articles, Acts, and Policies**

* **Article 19(1)(a) (Freedom of Speech and Expression):** The Supreme Court's verdict heavily relied on this, interpreting it to include the Right to Information about political funding.

* **Representation of the People Act, 1951:** Governs the conduct of elections, registration of political parties, and aspects of their finances. Amendments related to electoral bonds were struck down.

* **Companies Act, 2013:** Regulates corporate donations to political parties. Amendments related to removing the cap on corporate donations were also struck down.

* **Income Tax Act, 1961:** Deals with tax exemptions for political donations. Amendments related to electoral bonds were struck down.

* **Finance Act, 2017:** The legislation through which electoral bonds were introduced.

* **Model Code of Conduct:** While not directly related to funding sources, it governs expenditure during elections, indirectly linking to the need for transparent funds.

* **Election Commission of India's Powers:** Derived from Article 324 of the Constitution, empowering it to conduct, superintend, direct, and control elections.