The Supreme Court of India on Thursday dismissed the electoral bonds scheme, calling it “unconstitutional”.
The apex court asked the State Bank of India to stop issuing electoral bonds immediately and asked it to submit details of all bonds purchased since the apex court’s interim order of April 12, 2019, to the Election Commission by March 6, and asked the poll body to publish these details on the website by March 13, 2024.
The five-judge Constitutional bench ruled that changes in law permitting unlimited funding to political parties are arbitrary.
“Information about corporate contributors through Electoral Bonds must be disclosed as the donations by companies are purely for quid pro quo purposes,” the SC said.
“EC must share info on its website. Electoral bonds which have not been encashed shall be returned,” the SC bench added.
Electoral bonds are interest-free bearer instruments that are essentially used to donate money anonymously to political parties. The electoral bonds, introduced in 2018, are issued by the State Bank of India (SBI) and are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore.
Under the scheme was initially introduced during the 2017 Union Budget speech under the tenure of the late Arun Jaitley as the Finance Minister. The NDA government then introduced the scheme on January 2, 2018, in a bid to replace cash donations and improving transparency in political funding.
To implement the scheme, the Centre made specific amendments to the Companies Act, Income Tax Act, Foreign Contribution Regulation Act (FCRA), and the Reserve Bank of India Act.
nder the scheme, only the political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than 1 per cent of the votes polled in the last elections to the Lok Sabha or a state legislative assembly are eligible to encash electoral bonds.
Since the introduction of the scheme, around 674,250 electoral bonds worth Rs 28,531.5 crore have been printed by the India Security Press, Nashik, between 2019 and 2022, Hindustan Times reported.
According to Election Commission data, the BJP received more than half of all electoral bonds bought between 2018 and 2022. According to disclosures by political parties, BJP received Rs 5,270 crore out of a total of Rs 9,208 crore – 57 per cent of total electoral bonds sold.
Congress was a distant second, receiving Rs 964 crore or 10 per cent. West Bengal’s ruling Trinamool Congress got Rs 767 crore in bonds – 8 per cent of all bonds bought.
In 2022-23, BJP’s total contributions stood at Rs 2,120 crore, of which 61 per cent came from electoral bonds. The party’s total income in 2022-23 stood at Rs 2,360.8 crore, up from Rs 1917 crore in FY 2021-22. Congress earned Rs 171 crore from electoral bonds.
In April 2019, the Supreme Court rejected the request to suspend the electoral bonds scheme, citing the importance of a thorough hearing to address the significant concerns raised by the Centre and the Election Commission.
The current Constitution bench, consisting of Chief Justice DY Chandrachud, Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, commenced the hearings on October 31, 2023.
Among the petitioners were Congress leader Jaya Thakur, the Communist Party of India (Marxist), and the NGO Association for Democratic Reforms (ADR).
