Welcome to The India Fix by Shoaib Daniyal, a newsletter on Indian politics. As always, if you’ve been sent this newsletter and like it, to get it in your inbox every week, sign up here (click on “follow”).

Have feedback, interesting links or think I am wrong? Write to me: theindiafix@scroll.in

On Thursday, the Supreme Court of India concluded its hearings into the legality of electoral bonds and reserved its order. Spanning just six sessions, the hearings were short – but they dealt with what is probably the single-most important issue for Indian electoral democracy today.

In 2017, the Modi government hastily pushed through amendments to four laws in order to introduce a new form of political contribution in India. Through this was born the electoral bond: “a bond issued in the nature of promissory note which shall be a bearer banking instrument and shall not carry the name of the buyer or payee”.

In effect, one could now go to specific branches of the State Bank of India, buy an electoral bond of a particular value and then donate that bond to any political party. This donation would be hidden from Indian voters. Critically, however, it would not be hidden from the Union government: it could access these records, given that it controls the State Bank of India.

Untransparency

Introducing the scheme in the 2017 Union budget speech, finance minister Arun Jaitley claimed the bonds would increase “transparency in electoral funding”. “Even 70 years after Independence, the country has not been able to evolve a transparent method of funding political parties which is vital to the system of free and fair elections,” he said. “An effort, therefore, requires to be made to cleanse the system of political funding in India.”

As it so happens, this was a classic case of Orwellian speak. Far from making political donations more transparent, the new scheme of electoral bonds made them more opaque. In an affidavit to the Supreme Court, for example, the Election Commission strongly attacked the new scheme. “This is a retrogade step as far as transparency of donations is concerned,” it said. “The ECI [Election Commission of India] has no way to ascertain whether the donations were received illegally by the political party from government companies or foreign sources.”

Electoral bonds not only restrict information from the public but allow foreign corporations and, given many of those such as Chinese corporations are state-controlled, foreign governments to finance Indian political parties in secret. The new scheme effectively annulled the Election Commission’s guidelines from 2014 requiring political parties to file reports on contributions received, their audited annual accounts and election expenditure statements.

The new scheme, as could be expected, completely changed political financing in India. Electoral bonds are now the principal way by which parties raise funds. For example, more than 52% of the Bharatiya Janata Party’s total donations came from electoral bonds. Even more remarkably, most of the funds raised through these bonds went to the BJP. Between 2016-’17 and 2021-’22, the BJP, in fact, collected more money from electoral bonds than all other parties combined. The BJP got nearly six times the money the principal opposition party, the Congress, did.

No level playing field

Over the past decade or so, serious questions have been raised about the state of health of Indian democracy. Many of them were to do with a decline in its liberal aspects such as freedom of speech, space for minorities and press freedoms. However, electoral bonds and the funding windfall they have facilitated for the BJP highlight a far more subtle and worrying aspect of democratic decline: a lack of level playing field for the Opposition as they go into an election.

Even if we assume the vote itself is perfectly free and fair technically, the sheer disproportionality of the funds to which the BJP has access means it will always start the race significantly ahead of the Opposition. The BJP’s campaign has access to resources that other parties in the fray simply do not. In some cases, even ruling parties in a state struggle to catch up with the BJP, given the funds the Hindutva party pulls in.

Unfair match

Even more troubling is the fact that this uneven playing field does not stop at the bald fact of funding. It extends to nearly every other sphere in which political parties operate. Much of the national media, for example, openly bats for the BJP.

The Hindutva party took aboard lessons from the way incessant media attacks weakened the Congress-led United Progressive Alliance as it went into the 2014 Lok Sabha elections. The BJP put into place strategies to prevent such a combative media from emerging during its rule through a combination of carrot and stick. Last year, NDTV, perceived to be the last independent mainstream new television channel, was taken over by a businessman seen to be close to the Modi government.

Moreover, state power is used openly against the Opposition through central agencies such as the Enforcement Directorate and the Central Bureau of Investigation. Senior Opposition leaders and ministers find themselves in jail even as similar charges against BJP leaders and ministers are overlooked.

Perhaps what is most unfortunate in this matrix is the role – or lack thereof – of the judiciary. In theory, these abuses of executive power should be checked by the court. But that rarely happens. In fact, in the electoral bonds case, we saw a classic case of judicial evasion as the challenge to it was kept pending for six years even as the court refused to stay the law. This allowed the BJP to garner vast resources using an instrument that many experts, even the Election Commission, consider illegal.