In April 2019, the Supreme Court had declined to stay the electoral bonds scheme.
The Supreme Court will today pronounce its verdict on a set of petitions challenging the validity of the electoral bonds scheme. A five-judge Constitution bench, led by Chief Justice DY Chandrachud, reserved its verdict on November 2 last year. The electoral bonds scheme, introduced by the government on January 2, 2018, was seen as a solution to replace cash donations and enhance transparency in political funding.
Electoral bonds serve as a financial instrument allowing individuals and businesses to contribute funds to political parties discreetly, without revealing their identities. Under the provisions of the scheme, any citizen of India or entity incorporated or established in the country can purchase electoral bonds. These bonds are available in various denominations, ranging from Rs 1,000 to Rs 1 crore, and can be obtained at all branches of the State Bank of India (SBI). These donations are also interest-free.
Arguments
The petitioners argue that electoral bonds scheme defeats the citizen's right to be informed about the sources of funding of political parties which is a fundamental right under Article 19(1)(a) of the Constitution. Appearing for the petitioners, senior advocate Prashant Bhushan had said last year that the "opaque" and "anonymous instrument" promotes corruption.
Ahead of the Supreme Court's November hearing, Attorney General R Venkataramani argued that Article 19(1)(a) does not guarantee citizens an absolute right to information regarding the source of funds used for political party funding through electoral bonds. He said that the electoral bond scheme promotes transparency and clean money in elections. However, Mr Venkataramani maintained that there are limitations to the right to information, and it cannot be an unrestricted right to know "anything and everything."
"The scheme in question extends the benefit of confidentiality to the contributor. It ensures and promotes clean money being contributed. It ensures abiding by tax obligations. Thus, it does not fall foul of any existing right," he had said.
Numbers
According to a PTI report, in the 2022-23 financial year, the BJP secured nearly Rs 1,300 crore through electoral bonds, compared to the Congress, which received seven times less during the same period.
The BJP's overall contributions for the year amounted to Rs 2,120 crore, with electoral bonds contributing 61 per cent of this total. In the preceding financial year 2021-22, the BJP's total contributions were Rs 1,775 crore. The party's total income for 2022-23 was reported at Rs 2,360.8 crore.
In contrast, Congress experienced a decline in earnings from electoral bonds, garnering Rs 171 crore in 2022-23, which was a decrease from the Rs 236 crore it received in the financial year 2021-22.
Only political parties registered under Section 29A of the Representation of the People Act, 1951, and those securing not less than 1 per cent of the votes in the last Lok Sabha or state legislative assembly elections are eligible to receive electoral bonds. Furthermore, these bonds can only be encashed by eligible political parties through an authorised bank account, as specified in the notification.
In April 2019, the Supreme Court had declined to stay the electoral bonds scheme, stating the need for a comprehensive hearing due to "weighty issues" raised by the Centre and the Election Commission. The current Constitution bench, comprising Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, began hearing arguments on October 31 last year. The petitions included those filed by Congress leader Jaya Thakur, the Communist Party of India (Marxist), and the NGO Association for Democratic Reforms (ADR).