THE CONTEXT: The Supreme Court’s judgment on electoral bonds highlights the need for electoral finance reform, addressing money’s political influence and the legal regime’s dichotomy. The judgment emphasizes the importance of transparency and consultation in the democratic process.
THE ISSUES:
- Influence of Money on Politics: The Supreme Court’s judgment highlights money’s direct and indirect influence on electoral politics, which can create barriers to entry for new candidates and political parties, particularly those representing marginalized communities.
- Regulation Discrepancies: There is a dichotomy in the legal regime where contributions to political parties are regulated but not to individual candidates. Conversely, the law regulates expenditures by candidates but not by political parties.
- Need for Comprehensive Regulation: Experts suggest that future regulation must address four key aspects: regulation of donations, expenditure limits, public financing, and disclosure requirements.
- International Comparisons: Different countries have different norms and experiments with electoral finance. For example, the US restricts contributions based on the donor type but does not regulate political party expenditure, whereas the UK does the opposite.
- Public Financing: The text mentions Germany’s model of public financing based on a party’s importance and the “democracy vouchers” experiment in Seattle, US, as innovative approaches to campaign finance.
- Disclosure vs. Anonymity: The balance between transparency and anonymity is a contentious issue, as seen in the rejection of electoral bonds in India, which aimed to anonymize donations to political parties.
- Lack of Consultation: The government’s decision to implement electoral bonds without consultation with other political parties or the public is seen as a significant oversight.
THE WAY FORWARD:
- Regulation of Donations: There should be clear rules on who can donate and how much they can donate to political parties to prevent undue influence by a few large donors. This could include limiting contributions from individuals and corporations and banning certain types of donors, such as foreign entities.
- Expenditure Limits: Implementing expenditure limits for political parties can prevent a financial arms race and ensure a level playing field. For example, the UK has a cap on how much political parties can spend per seat, which could be a model to consider.
- Public Financing: Exploring public financing options, such as the German model, where parties receive funds based on their importance in the political system or the “democracy vouchers” system used in Seattle, US, where voters are given vouchers to donate to candidates of their choice.
- Disclosure Requirements: Strengthening disclosure requirements to ensure transparency in political donations. This would involve making it mandatory for political parties to disclose their funding sources, allowing voters to make informed decisions. The International Institute for Democracy and Electoral Assistance (IDEA’s) Political Finance Database is a global resource that includes comparative political finance data. It covers regulations on political finance, including disclosure requirements. The database outlines rules on financial reporting, oversight of political finance regulations, and sanctions available for breaches, providing a comprehensive view of disclosure practices in various countries.
- Strengthening Electoral Institutions: Increasing funding for the Election Commission of India (ECI) and changing its funding status to ensure its independence and effectiveness in overseeing elections and enforcing regulations. The legal backing of the Model Code of Conduct (MCC) could be enhanced to make its provisions enforceable by law, allowing for appropriate penalties for violations by political parties or candidates.
- Addressing Populism and Vote-Buying: Introducing legislation to cap populist announcements by political parties, like the Fiscal Responsibility and Budget Management Act, could help create a level playing field and prevent unsustainable populist measures. The popular initiative was undertaken in the Philippines to combat vote-selling. This initiative involved asking voters to make a simple, unenforceable promise not to accept money from politicians or to promise to vote according to their conscience, even if they do accept money.
THE CONCLUSION:
The ruling against electoral bonds calls for a comprehensive approach to electoral finance reform, including regulation of donations, expenditure limits, public financing, and disclosure requirements. Broad consultations with stakeholders are crucial to ensure the continued health of India’s democracy.
UPSC PAST YEAR QUESTIONS:
Q.1 To enhance the quality of democracy in India, the Election Commission of India has proposed electoral reforms in 2016. What are the suggested reforms, and how far are they significant to make democracy successful? (2017)
Q.2 In light of the recent controversy regarding the use of Electronic Voting Machines (EVM), what are the challenges before the Election Commission of India to ensure the trustworthiness of elections in India? (2018)
Q.3 Judicial Legislation is antithetical to the doctrine of separation of powers as envisaged in the Indian Constitution. In this context, justify filing many public interest petitions praying for issuing guidelines to executive authorities. (2020)
MAINS PRACTICE QUESTION:
Q.1 Considering the Supreme Court’s recent judgment on electoral bonds, critically examine the role of transparency in election financing in India. Evaluate the impact of this judgment on the existing legal framework for political donations and expenditures.
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