The Supreme Court(SC) struck down the electoral bonds scheme that allows anonymous donations to political parties, citing it as unconstitutional.
Key Points
- The Supreme Court (SC) struck down the electoral bonds scheme, deeming it unconstitutional due to its failure to uphold transparency in political funding.
- The Court emphasized that the scheme hides the source of political party donations, violating Article 19(1)(a), which guarantees the public’s right to know.
- The electoral bonds scheme was criticized for favoring certain political parties based on their vote share, giving an unfair advantage to the ruling party and major opposition parties.
- The Court ruled that the scheme contradicts the constitutional goal of curbing corruption and criminalization in politics. It also conflicts with the Representation of Peoples Act, 1951, which mandates political parties to disclose their contributions and expenditures.
Key Findings
- Of the total number of electoral bonds worth Rs 12,008 crore sold between 2017-2018 and 2022-2023, the BJP received nearly 55% or Rs 6,564 crore.
- Meanwhile, Congress has received just 9.5% of all bonds sold in the five-year period at Rs 1,135 crore. The Trinamool Congress has received Rs 1,096 crore from electoral bonds in this same time period.
- Regional parties too have received large sums of money through electoral bonds. The Bharat Rashtra Samithi was the biggest recipient among them in 2022-23, receiving Rs 529 crore through this method.
- The TMC came in second, with Rs 329 crore through electoral bonds, followed by the BJD with Rs 152 crore and YSR Congress with Rs 52 crore.
Understanding Electoral Bonds:
- An electoral bond is a bearer bond instrument through which companies and individuals can donate funds to political parties.
- It is just like a promissory note, with the money payable to the bearer on demand. It is interest-free.
- In the 2017 Union Budget, then Finance Minister Arun Jaitley announced electoral bonds. Finance Bill 2017 legalised them with amendments to the Reserve Bank of India Act 1934, Representation of Peoples Act 1951, Income Tax Act 1961, and Companies Act.
- The Electoral Bond Scheme was notified in 2018, and sale of the first batch happened from March 1–10, 2018.
Details of Electoral Bonds:
- It can be purchased by any citizen of India or a body incorporated in India.
- Electoral bonds are available at a designated State Bank of India in respective city branches listed by the government.
- People and corporate companies looking to purchase them have to fulfil prerequisites such as KYC (Know Your Customer) with the bank for authentication.
- The bonds will be issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore
- It is valid for 15 calendar days from the date of issue.
Benefits of Electoral Bonds:
- Enhanced transparency in political party funding.
- Accountability in disclosing donation utilization.
- Discouragement of cash transactions.
- Preservation of donor anonymity.
Challenges with Electoral Bonds:
- Anonymity may be compromised by government access to donor data
- Potential for unauthorized donations violating regulations.
- Risk of crony capitalism and infusion of black money.
- Loopholes regarding transparency for corporate entities and donation limits.
Conclusion:
The Supreme Court’s decision to strike down the electoral bonds scheme raises important questions about transparency, accountability, and the influence of anonymous donations in the political system. Despite its intention to enhance transparency in political funding, the scheme has been criticized for undermining public trust in the electoral process. The ruling underscores the need for more robust regulations to ensure transparency and fairness in political donations, especially in an era of increasing corporate influence.
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