Electoral bonds allow donors to anonymously give funds to political parties after buying bearer bonds.
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Today, the Supreme Court is delivering its judgment on a series of petitions challenging the legality of the electoral bonds scheme, which permits anonymous contributions to political parties.
A five-judge Constitution bench comprising Chief Justice of India (CJI) DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra is announcing the verdict.
Under the electoral bonds scheme, donors can anonymously donate funds to a political party by purchasing bearer bonds from the State Bank of India (SBI).
The introduction of electoral bonds was facilitated by the Finance Act, 2017, which amended three other statutes – the RBI Act, the Income Tax Act, and the Representation of People Act.
The 2017 Finance Act established a mechanism for the issuance of electoral bonds by any scheduled bank for electoral funding purposes.
Since the Finance Act was passed as a money bill, it did not require the approval of the Rajya Sabha.
Several petitions were filed before the Supreme Court challenging at least five amendments made to various statutes through the Finance Act, 2017, arguing that they have enabled unlimited, unchecked financing of political parties.
These petitions also argued that the Finance Act should not have been passed as a money bill.
In its response, the Central government maintained in its counter-affidavit that the electoral bonds scheme is transparent.
The scheme, which was notified by the government on January 2, 2018, was pitched as an alternative to cash donations made to political parties as part of efforts to bring in transparency in political funding.
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