In a significant judgment last week, the Supreme Court of India put an end to the Narendra Modi government’s Electoral Bonds Scheme. It is a judgment that seeks to clarify the rules of engagement of democracy itself. The ruling is in favour of democracy and doesn’t merely regulate it. But to be sure, it does not resolve the problem of electoral funding or any transparency toward it. The issue of money and elections is primarily political and cannot be solved exclusively by the law.
It makes the arresting point that, in relation to politics, a company or corporation cannot be treated like an individual. Companies, contra individuals, are decisively more powerful as this judgment rightly asserts, and thus cannot have similar legal rights and protections. This alone makes it a standout judgment for at least two reasons.
India is no America
First, it clarifies, upholds and strengthens rules and conventions from the founding decade of India’s Constitution and electoral democracy. The key judgment here is ‘Jayantilal Ranchhoddas Koticha vs Tata Iron and Steel Company’ in 1957. In this era of New India, when many of the foundational ideas and rules of independent India are up for political revision and remaking, this validation of foundational principles is especially meaningful.
Back in the first decade of free India, Justice MC Chagla of the Bombay High Court, too, had been hesitant to extend or equate the natural rights of an individual to that of a company or corporation. The 1957 Company Act had been silent on political donations by corporations even as it allowed charities to make such donations. However, the Supreme Court’s latest judgment has ended that silence, confusion and hesitation. It has clearly ruled against corporations or companies and removed any possible protections that are otherwise afforded to individuals. In short, the ruling on the Electoral Bonds Scheme has empowered constitutional principles to conduct fair elections. Brute financial power cannot be legally enshrined let alone validated as a rule of engagement.
Second, this judgment displays true decolonial confidence as it departs from and goes against American constitutional precepts and rulings. The United States law equates the company with the individual and extends the natural protections of the individual to a company or corporation. That the Indian Supreme Court’s judgment on the Electoral Bonds Scheme overtly contrasts its American counterpart should cheer all those who have been seeking the overturning of India’s Constitution because it is Western or worse, ‘colonial’.
Also read: SC ruling on electoral bonds is a vaccine for the future not medicine for the present
Billionaire Raj
If in doubt, and if the 250-page Supreme Court judgment seems too dry to grasp the significance of distinguishing between individual and company, look no further than the recently concluded American series Billions. Helmed by a stellar cast of actors and with seven gripping seasons, Billions is the story of the tussle between law and big money in American politics being played out right here, right now. Without giving away the plot, which includes good and bad hedge funds, Artificial Intelligence, oligarchs, university professors, psychologists, people on the make, and above all, a New York attorney against billionaires, the drama concludes that it will take a fantasy (more than any moral courage) to stop any billionaire from taking control of politics.
This is because the rules of electoral engagement in the US have, in crucial ways, enabled such a takeover. As the individual is treated the same as a corporation, the prospect of an actual billionaire taking charge of the world’s most powerful democracy is real and even imminent. Though in a prime position, Elon Musk is ruled out as he is not a US citizen by birth. But he is not the only billionaire contender for the world’s most powerful office.
The Indian relationship between business and political power is more complicated than it is given credit for. For starters, few, if any, members from big business and families run for political office. This is not to say that big business does not transact with or weigh upon the political process. Far from it. Though there is no hard boundary between business and politics, there is arguably some mutual suspicion. In part, this can be explained by the now-bygone era of ‘license raj’ that firmly kept the reins of economic decisions in the hands of the political class. More significantly, India, despite vertiginous economic growth, a great number of billionaires and an enduring love for technocrats, remains decidedly and volubly dominated by its politics. This is quite unlike the West where bankers, lobbyists, consultants, spin-doctors bankrolled by corporations and hedge funds prevail over the political process.
Political democracy is primary, and the Supreme Court judgment has weighed in favour of that realm. This has put an extraordinary burden on India’s political class. That individuals get inordinately wealthy when they enter Indian politics, is only a symptom, if all too visible. Wild sums are indeed needed to run for political office in India – it is one of those facts that everyone knows but no one can give any accountable data for. Money is seen in its pure effect in politics even as the root and source of it remains entirely hidden.
Electoral funding and expenditure are meta and while entirely crucial, are out of the bounds of this judgment. Transparency, as critics of this ruling demand, will not even begin to resolve it. After all, the role of big money in lobbying and funding from corporate firms in the US is all too transparent. It has not stemmed the role of that finance in determining the fate of campaigns and parties. American rules of engagement are weighed on the side of corporations even if transparency offers some comfort. Though limited, the Indian judgment on Electoral Bonds is significant because it puts an essential if small break between corporate cash and political funding. Most importantly, it has empowered the political class to determine rules of engagement.
For a hard line to be drawn between money and politics, the nature of political work and the conditions of entry into political office will need to change. Ironically, this burden lies entirely with India’s opposition. As the ruling party is a cadre-based party, it can renew and swell its membership, quite apart from any financial or other advantage it may already have. Most of India’s opposition parties operate as family businesses that have a laissez-faire approach to recruitment, political progression and above all, funding. Entry into politics has been staked on political legacy or big money with a strong advantage to those with both. Regardless of whether this is morally repugnant, it is now becoming increasingly untenable mainly as political entry and functioning have become all too prohibitive. For the opposition, the play of money is a case of diminishing returns and all the more meagre in the scale of the ruling party’s coffers.
It is all too late for this election cycle, which is set to be the most expensive ever. Given its predicted loss, India’s opposition now will have the luxury of time to create a new, simpler, low-tech, face-to-face, patient politics that is not dependent on big money or even expensive data. It has been done before in Indian politics, not only by MK Gandhi but also by others and can be done again. It requires courage, imagination and a new set of tactics to reject high visibility or mass campaigns, rallies, and mobilisations that are based on war rooms, comms teams, tech and big money. What is clear is that only new, simpler and much cheaper processes will attract the vast and passionate Indian electorate, which is now all too segregated from the political class. For now, the electorate has become mere witness to its own spectacle.
To this crucial extent, India’s Supreme Court has spoken in favour of the power of the small.
Shruti Kapila is Professor of History and Politics at the University of Cambridge. She tweets @shrutikapila. Views are personal.
(Edited by Zoya Bhatti)