Decoding Electoral Bonds: Impact on Indian Politics

Key Takeaways:

1. The main purpose of introducing electoral bonds was to curb the issue of black money in Indian elections. However, this goal is yet to be wholly achieved.
2. Electoral bonds, meant to provide anonymity to donors, instead gave an advantage to the political party controlling the State Bank of India (SBI) -- the institution through which these bonds flow.
3. Contrary to its main intent, the electoral bond has elevated the ceiling for corporate contributions, thus enabling companies with negative profits to donate significant amounts for political parties.

Unmasking The Concept of Electoral Bonds

Electoral bonds were first introduced to combat two significant issues in Indian politics:

• Anonymity preservation: Electoral bonds were designed to preserve the anonymity of donors while making political donations. The logic behind this is simple: If a donor's identity were made known, it could lead to them being targeted, especially if the funds were being donated to opposition parties. However, the anonymous concept takes a hit, given that the SBI appointed a chairperson for the sole purpose of managing these bonds. This results in the government having access to all bond information, thus negating the purpose of anonymity.

• Black Money Elimination: Electoral bonds were also launched with an idea to curb the black money problem in Indian politics. Yet, this issue is far from being resolved. Over 50% of the election funding still comes from sources other than electoral bonds, which still leaves substantial room for black money to infiltrate the system.

Supreme Court's Verdict on Electoral Bonds

The Supreme Court of India has labelled the electoral bond system unconstitutional, citing its lack of robustness and inherent selectiveness. This verdict is significant, considering that these bonds were supposed to bring about a fairer system.

The Impact of Removing Contribution Ceilings

One key unintended consequence of the introduction of electoral bonds was the removal of the ceiling on contributions made by corporations. Previously, these were limited to 7.5% of a company's average net earnings over the prior three years. But with this ceiling gone, even companies with significantly negative profit margins could contribute excessively high amounts, leading to questionable transactions in the political scene.

Impact on Democracy

While critics might argue that all parties benefit from electoral bonds, two key issues make for a convincing counter-argument:

1. The ruling party has typically received the largest proportion of the funds accumulated via electoral bonds. This not only gives them an unfair financial advantage but also enables them to exercise extensive control over the 'carrot and stick' policy, i.e., rewards and punishments.
2. With this funding model in place, company-donors may potentially expect favours and concessions once their chosen party is elected. This system breeds inefficiency and corruption, eroding public trust.

While getting rid of corruption completely might be unrealistic, introducing a systematic approach towards transparency, such as limits on political parties regarding money sourcing, could be a sensible way forward.

Why You Should Care

The concept of electoral bonds directly impacts the health and future of democratic processes. If persistent, a skewed funding model can hurt democracy by giving one party the upper hand. Moreover, it's important for the citizens to understand these dynamics, as it's ultimately their money that's used for growth and nation-building.