The Supreme Court is right in striking down electoral bonds for not being transparent. The judgment, however, does not help bring more transparency into electoral funding in any manner, whatsoever. The verdict has struck down electoral bonds as unconstitutional by arguing that it does not further the cause of electoral transparency by maintaining the anonymity of donors. In Constitutional terms, the court has said that the citizen’s right to know in Article 19 (1) (a) applies to electoral funding and supercedes privacy rights of donors in this case. While the apex court’s argument for making election funding more transparent is unexceptionable, the real question is whether the ruling will further this cause.

The chances are that it may not. Electoral bonds or an improvement upon it that strikes down donor confidentiality, could perhaps have worked as a viable way forward in funding political parties transparently. Now, what the striking down of electoral bonds per se implies is that the role of unaccounted hard cash in funding elections will come back into focus; the opaque role of corporates in political funding will continue as always. However, the verdict will have served its purpose if it triggers a fresh debate around transparency in poll funding.

On the key points of law, the Court struck down the 2017 amendment to Section 182 of the Companies Act permitting unlimited political contributions. This welcome ruling effectively brings back the earlier cap on corporate donations to 7.5 per cent of a company’s average net profit in the last three years. Here, the judgment has noted the view of the Election Commission which had underlined that a provision prescribing a cap on corporate funding should be introduced because unlimited corporate funding increases the use of black money through shell companies. Another significant aspect in jurisprudential terms is that the right to information in Article 19(1)(a) has now been extended to political parties, not just candidates.

On the question of whether the judges could have simply removed the donor confidentiality clause and retained the scheme, the court maintained that anonymity of the contributor was intrinsic to the electoral bond scheme, which is otherwise indistinguishable from other modes of contribution through the banking channels. Justice Sanjiv Khanna underlined the electoral trust scheme which accepts contributions while also protecting donor anonymity in a less restrictive manner. “In a comparison of limited alternatives, it (trust scheme) is a measure that best realises the objective of Union of India...without significantly impacting the fundamental right of the voter to know,” said Justice Khanna in his concurring judgment. Companies can set up trusts to fund political parties. The Trust is required to provide particulars of its depositors and the amounts donated to political parties, including the names of the parties. But it protects the anonymity of the donors vis-a-vis their contributions to the party. This could be the way forward in transparent funding of elections.