In post-electoral bond year, BJD received Rs 60 crore through contributions; maximum came from Vedanta

The news that the Biju Janata Dal (BJD) received Rs 60 crore in political contributions, primarily from the Vedanta Group, in a 'post-electoral bond year' brings the critical issue of political funding back into sharp focus. This development is particularly significant given the recent landmark judgment by the Supreme Court of India striking down the Electoral Bond scheme. Understanding this context is vital for competitive exam aspirants.

**Background Context: The Electoral Bond Saga**

Political funding in India has long been a contentious issue, plagued by concerns of black money, lack of transparency, and quid pro quo arrangements. To address some of these challenges, the government introduced the Electoral Bond scheme in the Finance Bill of 2017, which came into effect in January 2018. The stated objective was to cleanse political funding by allowing anonymous donations to political parties through scheduled banks. Donors could purchase these interest-free bearer bonds and donate them to political parties, which could then encash them. The identity of the donor was kept confidential from the public, known only to the issuing bank (State Bank of India).

However, the scheme faced severe criticism from various quarters, including civil society organizations, opposition parties, and election watchdogs like the Association for Democratic Reforms (ADR). Critics argued that far from promoting transparency, the scheme legalized anonymity, making it easier for corporations to donate vast sums without public scrutiny. This anonymity was seen as a grave threat to democratic accountability, as it prevented citizens from knowing who was funding political parties and potentially influencing policy decisions. The Supreme Court, in its judgment on February 15, 2024, finally declared the Electoral Bond scheme unconstitutional, citing violations of citizens' Right to Information under Article 19(1)(a) of the Constitution. The Court emphasized that the scheme allowed for 'unrestricted and uncanalized' corporate funding, which could lead to a 'quid pro quo arrangement' and undermine free and fair elections.

**What Happened: Post-Electoral Bond Funding**

The BJD's reported receipt of Rs 60 crore, with Vedanta as the largest contributor, illustrates that corporate funding to political parties continues unabated, albeit through alternative, now more scrutinized, channels. With the electoral bonds mechanism struck down, political parties are reverting to traditional methods of receiving donations, which include direct bank transfers, cheques, and smaller cash contributions. These donations are governed by provisions of the Representation of the People Act, 1951 (specifically Section 29C for disclosure of donations above Rs 20,000) and the Companies Act, 2013, which previously capped corporate donations at 7.5% of the company's average net profit over the preceding three financial years (a limit that was removed for a period, making way for unlimited corporate donations under the electoral bond scheme, but now potentially back in effect for other donation routes or subject to ongoing legal interpretation). The BJD's disclosure would likely fall under these existing frameworks, now under renewed public and regulatory spotlight.

**Key Stakeholders Involved**

1. **Political Parties (e.g., BJD)**: They are the primary recipients of these funds, essential for their operational costs, election campaigns, and outreach activities. Their reliance on corporate donations highlights the continued financial demands of electoral politics.

2. **Corporate Donors (e.g., Vedanta Group)**: Companies donate for various reasons, including supporting parties whose policies align with their business interests, seeking favorable regulatory environments, or simply to gain access and influence. Their contributions raise questions about corporate lobbying and potential policy capture.

3. **Election Commission of India (ECI)**: As the constitutional body responsible for conducting free and fair elections (Article 324), the ECI plays a crucial role in regulating political funding. It mandates disclosure norms for political parties and monitors compliance. The ECI had, in fact, voiced concerns about the opacity of electoral bonds.

4. **Supreme Court of India**: The judiciary, through its recent judgment, has affirmed the importance of transparency in political funding and the citizens' right to information, setting a precedent for future reforms.

5. **Citizens and Voters**: Ultimately, the integrity of political funding directly impacts the quality of democracy and governance. Transparent funding allows voters to make informed choices and hold their elected representatives accountable.

**Significance for India**

This development holds immense significance for India's democratic fabric. Firstly, it underscores the persistent challenge of ensuring transparency and accountability in political financing. While electoral bonds were struck down, the underlying issue of corporate influence remains. Secondly, it highlights the need for comprehensive electoral reforms. The current legal framework, even without electoral bonds, still has loopholes that allow for less-than-transparent funding. The sheer volume of corporate donations can create an unlevel playing field, favoring well-funded parties and potentially marginalizing smaller or newer political entities. This can lead to policies being framed to benefit corporate interests rather than public welfare, eroding public trust in democratic institutions. The BJD-Vedanta example serves as a potent reminder that the debate on political funding is far from over and requires sustained attention to strengthen democratic principles.

**Future Implications**

The post-electoral bond era is likely to usher in several changes. There will be increased scrutiny on existing donation mechanisms and a renewed push for greater transparency. The ECI might introduce stricter guidelines for disclosing donations, and there could be legislative efforts to plug existing loopholes. Discussions around alternative funding models, such as state funding of elections, might gain traction. Furthermore, the Supreme Court's strong stance could encourage more judicial oversight if new opaque mechanisms emerge. The incident also puts pressure on political parties to demonstrate greater ethical conduct and transparency in their financial dealings, fostering a healthier democratic environment for India.