NEW DELHI — In what could be a serious blow to India’s richest and most dominant political party, the Supreme Court struck down a type of anonymous political donations on Thursday, just ahead of a national election this summer.
The country’s elections have become the most expensive in the world, even surpassing America’s notoriously pricey contests in some cases, at an estimated cost of up to $7.2 billion in 2019. The decision brings opaque campaign financing, an issue bedeviling democracies worldwide, to the forefront of India’s buzzing political chatter, as praise of the judgment was heard from nearly all national parties other than India’s ruling Bharatiya Janata Party.
“Funding in elections has been the root cause, the mother of all corruption in the country,” said Shahabuddin Yaqoob Quraishi, a former head of India’s Election Commission. “The impact of the landmark judgment will be instant, no doubt.”
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The political financing for the BJP, which looks headed for a third term of dominance in Parliament in the national elections, has ballooned in recent years. The party earned $230 million and spent $103 million in the fiscal year ending in 2022, according to the Association for Democratic Reforms, a nonproft working on electoral reforms and one of the petitioners in the case.
The biggest cash flow came from a political finance tool developed in 2018 that allowed corporations and individuals to donate anonymously through the country’s state-owned bank. Earlier, political parties had to reveal the origins of donations above roughly $200. The government also did away with a cap on corporate donations and requirements for firms to disclose their donations on financial statements.
The government argued that these “electoral bonds” got rid of illegitimate cash and used India’s right-to-privacy legislation to argue that the program shielded donors’ political preferences.
The Association for Democratic Reforms found that nearly 85 percent of all donations in the fiscal year ending in 2023 went to the ruling BJP, as did almost 90 percent of corporate donations.
These donations are crucial in a country where handouts of cash or mobile phones or even alcohol are used to lure voters.
The petitioners, one of which was India’s Communist Party, argued that these anonymous bonds furthered corruption, especially because the government, through the state bank, was alone in being able to know the identities of those behind the anonymous donations.
The scheme added “a layer of mischief” on top of a highly imperfect electoral process, said Jagdeep Chhokar, one of the founding members of the Association of Democratic Reforms.
The judgment will not only disallow any new electoral bonds and those not yet cashed in, but will also require the Election Commission to retroactively disclose the identities of all donors since 2019 — likely to create “some ripples,” Chhokar said.
The judgment stated that the nexus of money and politics allows economic inequality to further political inequality and that the program violates the right to information in the country.
While some have said the judgment came too late, allowing parties like the BJP to guzzle up extraordinary amounts of money already, Chhokar said the new information will become of prime political importance in the run-up to the election.
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The Indian Supreme Court has been the target of severe criticism for delaying critical judgments and allegedly ruling more consistently in the government’s favor. The court refused to stay the program in 2019.
“This judgment will revive the faith of the people in democracy, the rule of law, and the Supreme Court,” Chhokar said, but the country’s “black money” won’t be “disturbed at all.”
“What gets declared is only a fraction of the total money that parties collect,” he said. “This is not a panacea to all problems in Indian elections.”