THE CONTEXT: Recently, the Supreme Court struck down the Electoral Bond (EB) scheme of political funding, declaring it to be “unconstitutional” because it completely anonymized contributions made to political parties. It is being welcomed especially because it is anchored in the citizen’s right to know.

ELECTORAL BONDS:

• These are bearer banking instruments that do not carry the name of the buyer or payee, go for sale in 10-day windows in the beginning of every quarter in January, April, July and October besides an additional 30-day period specified by the central government during the Lok Sabha election years.
• It was introduced in 2018 and are available for purchase at any SBI branch in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and can be bought through a KYC-compliant account.
• There is no limit on the number of electoral bonds that a person or company can purchase. Donations made under this scheme by corporate and even foreign entities through Indian subsidiaries enjoy 100% tax exemption while identities of the donors are kept confidential both by the bank as well as the recipient political parties. The public sector bank is obligated under the scheme to disclose the details only pursuant to a court order or a requisition by law enforcement agencies.

THE SUPREME JUDGEMENT ON ELECTORAL BONDS

• The five bench SC judgment headed by Chief Justice D Y Chandrachud is based on petitions filed by Association for Democratic Reforms (ADR), non-profit Common Cause, Congress leader Jaya Thakur, and the CPI (M), among others.
• The petitioners had argued that either the scheme must go on account of violating people’s right to know and affecting free and fair elections, or the court must direct for full disclosure of the purchasers and donors of EBs.

POINTS MADE IN THE JUDGEMENT:

• The judgement ruled that amendments made in the Representation of the People Act, Income Tax Act, and Companies Act through the 2017 Finance Act violated the constitutional right of the electors.
• Violates Article 14: Permitting unlimited corporate contributions to political parties was violative of Article 14 (right to equality) as it highlighted that it authorized unconstrained influence of companies in the electoral process.
• Violates free and fair election: This is violative of the principle of free and fair elections and political equality captured in the value of one person-one vote.
• Violate Article 19(1)(a): The electoral bond scheme is violative of Article 19(1)(a) as it infringes upon the right to information of the voter by anonymizing contributions through electoral bonds.
• Nexus between money and politics: Contradicting the government statement that donor anonymity was necessary to shield contributors from potential retribution, the judgement noted that that financial contributions to a political party would lead to a close nexus between money and politics.
• Fails proportionality test: The judgment underscored that voters’ right to know supersedes anonymity in political party funding, and that the EB scheme fails to meet the balancing prong of the proportionality test.
• Violates the right to information: The scheme hides the source of funding of political parties from the public, which is a fundamental right under Article 19(1)(a). The scheme also enables black money, foreign funding, and corporate influence in politics, which harm the public interest and the sovereignty of the nation.
• Violates the principle of equality: The scheme discriminates between different political parties based on their vote share, giving an unfair advantage to the ruling party and the major opposition parties, while excluding the smaller and regional parties. The scheme also creates a disparity between the donors and the voters, as the former can sway the policies and decisions of the political parties, while the latter are kept in the dark.
• Violates the constitutional scheme of electoral reforms: The scheme goes against the constitutional aim of curbing corruption and criminalization of politics. The scheme is also contrary to the recommendations of various committees and commissions that have called for more transparency and disclosure in political funding.

SIGNIFICANCE OF JUDGEMENT:

• Transparency and accountability of political funding: The judgment will ensure that the public will have access to the information about the source and amount of funding received by the political parties through electoral bonds. This will enable the public to scrutinize and hold the political parties accountable for their performance and conduct.
• Reduce the influence of money: The judgment will curb the influence of money and corporate power in politics, as the donors will no longer be able to hide their identity and agenda behind the veil of anonymity.
• Level playing field for all political parties: The judgment will level the playing field for all political parties, as they will no longer be discriminated against based on their vote share or popularity. This will enable the smaller and regional parties to compete with the ruling party and the major opposition parties on an equal footing and offer a genuine choice to the voters.
• Democratic setup: “The voters’ right to know and access to information is too important in a democratic set-up so as to curtail and deny ‘essential’ information on the pretext of privacy and the desire to check the flow of unaccounted for money to the political parties. While secret ballots are integral to fostering free and fair elections, transparency not secrecy in funding of political parties is a prerequisite for free and fair elections. The confidentiality of the voting booth does not extend to anonymity in contributions to political parties.
• Undo corruption: The bench held that the information about funding of political parties is essential for the effective exercise of the choice of voting to identify corruption and governance information. It ordered full disclosure of donors and recipients of EBs issued since April 2019 on the website of the Election Commission of India (ECI) by March 13, 2024. It directed the State Bank of India the only designated EB-issuing bank to stop the issuance of EBs, adding the bank will submit details of EBs purchased since April 12, 2019, till date to the poll body by March 6.

THE WAY FORWARD:

• State funding: The Indrajit Gupta Committee on State Funding of Elections has supported partial state funding of recognised political parties. State funding has proved its effectiveness in a number of countries like Germany, Japan, Canada, Sweden etc.
• Stringent legislations: There is a need for effective regulation of political financing along with bold reforms to break the vicious cycle of corruption and erosion of quality of democratic polity. It is crucial to plug the loopholes in the current laws to make the entire governance machinery more accountable and transparent.
• Strengthening Election commission: There is a need to strengthen the role of Election Commission by enabling suitable laws and creating healthy political environment. The EC should increase its own capacity in terms of empowering staff and developing infrastructural and logistical strength.
• Political party auditing: Venkatachaliah Committee Report (2002) recommended strict regulatory frameworks for auditing and disclosure of party income and expenditure along with state funding.

THE CONCLUSION:

The Supreme Court’s judgment on scrapping of electoral bonds is a historic and landmark verdict that upholds the constitutional rights and values of the citizens and the democracy. This decision will enhance the transparency and accountability of political funding and reduce the influence of money and corporate power in politics and will create level playing field for all political parties.

UPSC PREVIOUS YEAR QUESTION

Q. Whether electoral bonds are effective in ensuring fair, just and open elections? Discuss the various concerns regarding electoral bonds. (2022)

MAINS PRACTICE QUESTION

Q. Court striking down the electoral bond scheme is a landmark moment as it affirms principles of transparency and probity, and the people’s right to know. Comment.

Source: https://indianexpress.com/article/opinion/editorials/express-view-on-scs-electoral-bonds-judgment-a-vital-verdict-9164121/

THE CONTEXT: The Delhi Municipal Corporation (Amendment) Bill, 2022, was introduced and passed in the Lok Sabha on March 25, 2022, for the unification of the three municipal bodies in the capital. The Bill seeks to amend the Delhi Municipal Corporation Act, 1957, passed by Parliament. The Central Government claims that this move will improve municipal governance, but there is a contrarian view. This article analyses this issue in detail.

THE SALIENT FEATURES OF THE DELHI MUNICIPAL CORPORATION (AMENDMENT) BILL, 2022

UNIFICATION OF MUNICIPAL CORPORATIONS: The Bill replaces the three municipal corporations of North, South, and East Delhi under the Act with one Corporation named the Municipal Corporation of Delhi.

POWERS OF THE CENTRAL GOVERNMENT:

The Bill empowers the Central government to decide various matters including:

1. total number of seats of councilors and number of seats reserved for members of the Scheduled Castes,
2. division of the area of corporations into zones and wards etc.

NUMBER OF COUNCILLORS: The Bill states that the total number of seats in the new corporation should not be more than 250 while the earlier number was 272.

REMOVAL OF DIRECTOR OF LOCAL BODIES: The Act provides for a Director of Local Bodies to assist the Delhi government and discharge certain functions, but the Bill omits the provision for a Director of Local Bodies.

SPECIAL OFFICER TO BE APPOINTED BY THE CENTRAL GOVERNMENT: The Bill provides that the central government may appoint a Special Officer to exercise powers of the Corporation until the first meeting of the Corporation is held after the commencement of the Bill.

E-GOVERNANCE SYSTEM FOR CITIZENS: The Bill adds that obligatory functions of the new corporation will include establishing an e-governance system for citizen services on an anytime-anywhere basis for a better, accountable, and transparent administration.

DO YOU KNOW?

The Delhi Municipal Corporation Act, 1957 was enacted to consolidate and amend the law relating to the Municipal Government of Delhi. A Corporation charged with the Municipal Government of Delhi was established under the said Act as the Municipal Corporation of Delhi. In 2011, the said Act was amended by the Legislative Assembly of the National Capital Territory of Delhi vide the Delhi Municipal Corporation (Amendment) Act, 2011 leading to the trifurcation of the said corporation into three separate Corporations.

THE RATIONALE FOR THE UNIFICATION OF THE MUNICIPAL CORPORATIONS

NON FULFILLMENT OF MAIN OBJECTIVE:

• The main objective of the trifurcation of the erstwhile Municipal Corporation of Delhi was to provide more efficient civic services to the public.
• Due to inadequacies in resources and uncertainty in fund allocation and release, the three corporations have been facing huge financial hardships, making it difficult to maintain the civic services in Delhi at the desired levels.

ADMINISTRATIVE CHALLENGES:

• The trifurcation was also uneven in terms of territorial divisions and revenue-generating potential.
• As a result, there was a huge gap in the resources available to the three corporations compared to their obligations.

DELAYED PAYMENTS AND EMPLOYEE STRIKES:

• Due to poor financial conditions, payment of salaries and retirement benefits to their employees was delayed.
• This has resulted in frequent strikes by the municipal employees, which have not only affected civic services but also created concomitant problems of cleanliness and sanitization.

INTEGRATED PLANNING AND DEVELOPMENT:

• A single, integrated, and well-equipped entity will ensure a robust mechanism for synergized and strategic planning and optimal utilization of resources and will bring about greater transparency, improved governance, and more efficient delivery of civic service.

REDUCING ADMINISTRATIVE EXPENSES:

• There are three mayors, three commissioners, and 12 additional commissioners. Even different MCDs have different committees. This has increased the expenses manifold and is one of the major contributors to the financial crisis of the MCDs.
•  Unification will definitely curtail the office and meeting expenses along with the expenses which are being done by the leaders and officers.

CITY-LEVEL POLITICAL LEADERSHIP:

• When the MCD was unified, the mayor was treated as the First Citizen of Delhi, and the post used to carry a lot of weight.
• Mayor has to be called for most of the ceremonial events. Even foreign dignitaries used to meet the mayor of Delhi.
• Once unified, not just in the post of mayor but as an institution, MCD will have a larger say in the policymaking of the capital and the mayor will provide a single political leadership at the municipal level.

CRITICISM OF THE UNIFICATION OF THE CORPORATIONS OF DELHI

LACK OF LEGISLATIVE COMPETENCE:

• Many Members of Parliament argue that Parliament was overreaching its legislative authority to amend the Bill.
• Since the Act for trifurcation was passed by the Delhi Assembly, therefore Parliament cannot pass a law to merge the three civic bodies. The Constitution has given powers to the states to constitute municipal corporations.

POSTPONEMENT OF ELECTIONS:

• The municipal corporation elections were scheduled to be held in April. However, on March 9, the State Election Commission (SEC) deferred the polling indefinitely, citing a communication from the Lieutenant Governor, an appointee of the Central Government.
• It is alleged that the party ruling the MCDs sensed a strong anti-incumbency and hence used the “unification” strategy to defer the polls.

POLITICAL REASONS:

• The unification of municipal corporations could have been done in the last few years, as the same party has been in power in the Centre since 2014.
•  The real purpose of the unification is not the efficiency of municipal governance but the creation of a parallel system of governance to compete with the “Delhi Model” and to reap political dividends.

NO REAL REFORMS:

• The Bill doesn’t bring any substantive governance, administrative or financial reforms to the MCD.
• It does not mention the governance structure of the unified MCD and the status of the Mayor and the Council members vis a vis the administration.
• The Bill also missed an opportunity to establish a unified administrative and governance system by bringing the parastatals and the Special Purpose vehicles under the control of the Municipal Corporation.

QUESTION MARK ON INDEPENDENCE OF SEC:

• The postponement of the election also raises a question about the agency of an autonomous body such as the State Election Commission, whose prima facie job is to ensure free and fair elections in the country.
• The body seems to have succumbed to pressure from the central government.

AN ALL-POWERFUL CENTRAL GOVERNMENT: The Bill provides for overarching powers for the Central Government like:

• naming or resizing any zone or ward,
• listing out the obligatory functions of the MCD,
• rules on declaring assets of councilors,
• the appointment and pay scale of the commissioner,
• approvals for loans and action against any councilor or MCD official etc.

This is not in sync with the idea and practice of democratic decentralization and the spirit of the 74^th Constitutional Amendment.

SKEWED REPRESENTATION: 

• The total number of municipality wards will be reduced from 272 to 250, which goes against logic as the population of Delhi has increased from the last delimitation.

BUREAUCRATIC DOMINANCE:

• The reduction in the number of municipality wards will necessitate a delimitation exercise.
• Due to delimitation, the election will be delayed by one or two years. The Bill is silent on the “Census” based on which the delimitation will take place.
• All these mean that the special officer appointed by the Centre will be the overlord of the MCD.

A STRONG BUREAUCRACY AND A WEAK DEMOCRACY: A CASE STUDY OF MCD

• Delhi Municipal Corporation faces a unique kind of tussle between the elected and administrative wings. While the mayor has mostly ceremonial rights, the administrative decisions are being taken by the commissioner and his team.
• The IAS officers come on deputation to serve their MCD tenure, and the political wing claims that they are the real reason behind the mismanagement of financial and even administrative situations of Delhi Municipal Corporation.
• It was a long-pending demand to provide more powers to elected representatives, including the mayor, the standing committee chairperson, and heads of different committees.
• A change in the system in the favour of elected representatives by bringing the mayor into the council which will provide more administrative powers to the mayor needs to be established. This long-pending demand needs to be looked into the new amendment, which is based on the Kolkata Municipal Corporation.

THE WAY FORWARD

SUSTAINABLE SOLUTIONS TO GOVERNANCE PROBLEMS OF DELHI:

• Multiple power centers are operating in Delhi, and the tussle between the Centre and the NCT government has been a recurrent phenomenon.
• What is required is to iron out the differences, reform the Constitutional and legal provisions and bring about a clear demarcation of roles and responsibilities of the political and administrative institutions.

PROVIDE SCOPE FOR OWN REVENUE GENERATION:

• Even before the trifurcation, the MCD has taken loans from the then Delhi government to pay salaries to the staffers.
• Without addressing the issues in revenue generation and other core issues, the civic body will find itself in financial troubles again and will have to depend on the government for funds.

REFORMS IN MUNICIPAL GOVERNANCE:

• Under the present system, mayors and other appointments are made for a year and by the time a person starts understanding the mechanism, the tenure gets over.
• Thus, the new amendment should bring reforms like the direct election of the mayor, his / her tenure being increased to at least two-and-half years instead of the existing one year, and provisions for allocation of funds directly from the Centre.

REFORMS IN TAXATION:

• In Delhi, the house tax rates have not been increased since 2004, and the MCD continues to collect taxes based on the same rates, which is basically loss-making. So, with the unification must come hardline taxation reforms to address these issues.

DECENTRALIZE POLITICAL AND ADMINISTRATIVE POWER:

• Growing population and vast geographical spread were cited among the reasons for the trifurcation, which was to lead to decentralization of administration for better delivery and governance with each commissioner overseeing services for a smaller area.
• With unification, there may be the problem of centralization of authority which needs to be addressed by empowering political and administrative leadership at zonal and ward levels.

AUTONOMY OF SEC AND CONDUCT OF ELECTIONS:

• That the SEC is and should be independent of the government is a maxim often stated. But how the SEC acted in the current context seems to undermine the exalted position of this constitutional authority.
• Also, the amendment and associated processes should not come in the way of citizens of Delhi exercising their legitimate democratic rights of choosing their own local representatives.

THE CONCLUSION: While the reunification will help save on expenditure and bring parity, making the civic body self-reliant will have to be the primary target. Whatever money is saved will not be enough to make the municipal institutions self-governing and deliver quality civic services. The major issue that needs resolution is the power tussle among the Centre, the Delhi government, and the municipal bodies, without which the unification exercise will not provide optimal results. Another crucial reform required is in the area of “City Governance” and Delhi must be developed as a model for other Indian cities.

QUESTIONS:

1. Critically analyse the features of the Delhi Municipal Corporation (Amendment) Bill, 2022.
2. The unification of the municipal corporations of Delhi, although maybe a right step toward administrative efficiency, will not be sufficient to ensure the quality delivery of public services. Examine.
3. The Delhi Municipal Corporation (Amendment) Bill, 2022, is all politics, less economics, and no governance. Critically Examine.
4. Without comprehensive constitutional, legal and financial reforms concerning municipal governance, Adhoc administrative reform measures will not bring good governance at the city level. Illustrate and Comment.