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Keywords: Electoral Bonds Scheme, Supreme Court, Corruption, ADR (Association for Democratic Reforms)
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On February 15, 2024, the Supreme Court struck down The Electoral Bonds Scheme, calling it unconstitutional. The five-judge bench headed by Chief Justice D.Y. Chandrachud with Justices Khanna, BR Gavai, JB Pardiwala and Manoj Mishra, averred it a source of anonymous funding to political parties.
The Electoral Bonds Scheme was introduced in the 2017 Union Budget by the then Finance Minister Arun Jaitley and implemented in 2018. It constituted the aim of cleansing the political funding system of the nation. The electoral bond is interest-free (100% tax exemption). It has an open system of purchases by any registered individual or body. This made it an effective instrument.
The State Bank of India issued a Promissory note and bond. Both were available in denominations of R1000, R10,000, R1,00,000, R10,00,000, and R1,00,00,000. The political parties should be registered under Section 29A of the Representation of People Act, 1951 and have secured not less than 1% vote in previous general elections. Then they become eligible to cash out these denominations within 15 days from an authorized bank. The donors remained anonymous.
A financial contribution is made either to render support to the political party or to receive a return advantage over the same i.e. quid pro quo.
As every coin has two sides, the Electoral Bonds scheme was no exception. It licensed illimitable funding to the political parties, especially the ruling government. Corporate institutions and individuals were unable to track down the funds. Therefore, the funds were at risk of corporate dominance. It curtailed an individual’s Right to Information under Article 19 (1) of the Indian Constitution.
Prashant Bhushan, a representative of the NGO Association for Democratic Reforms, made it a point to curb this scheme for a non-venal, transparent election. According to him, the scheme exacerbates the corruption of political parties. This leaves people having no source of information. This question became more pertinent at the advent of the General Elections 2024.
Moreover, the Reserve Bank of India also expressed concern over the scheme's loopholes. RBI has seen money laundering with electoral bonds before.
The apex court bench thus scrapped the scheme. This is because it violated Article 19 (1) of the Indian Constitution. This also involved quid pro quo. Additionally, it directed SBI to provide details of political parties that received these bonds and called out for other alternatives to curb corruption and black money in the system.
Edited By: Georgiana Madalina Jureschi
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