Political observers in India have long warned against political finance as a vehicle driving corruption in the world’s biggest democracy.
Nowhere is this more apparent than in the general elections, where opacity in political funding and the murky flow of funds have often benefited the party in power. It has also contributed to the soaring cost of elections. In 2019, India’s election was the most expensive in the world, costing a whopping $8.6 billion—almost twice as much as the cost of their 2014 election, according to a study by the Delhi-based Centre for Media Studies.
But now, a surprise historic verdict from the Indian Supreme Court could finally change things. On Thursday, Feb. 15, India’s top court scrapped a seven-year-old election funding system known as “electoral bonds” in a bid to introduce a base level of transparency to campaign financing.
Electoral bonds were introduced in 2017 by the ruling Bharatiya Janata Party (BJP) and enabled individuals and companies to make unlimited and anonymous donations to political parties. Under the system, donors could purchase interest-free, tax-exempt bonds from the state-owned State Bank of India (SBI) to donate to a political party of their choice which could then exchange the bonds for cash. The BJP’s then-Finance Minister, Arun Jaitley, argued that it would make political funding more transparent through the flow of clean cash while also protecting the donor’s identity.
Seven years later, however, critics say the system has largely hindered the public’s right to know who has donated money to political parties. And it has massively boosted the BJP—as of last November, the ruling party received nearly 90% of the corporate donations from bonds worth nearly $2 billion, according to a report by the Association for Democratic Reforms, or ADR, a nonprofit advocating for electoral reforms and one of the petitioners in the case.
In the latest ruling, the court called electoral bonds unconstitutional…
