The Supreme Court of India, presided over by a Constitution Bench including Chief Justice DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, is rigorously examining the electoral bonds scheme, which has stirred debate over its implications for transparency in political donations. The apex court’s ongoing hearing addresses a batch of petitions challenging the scheme’s legal validity, which allows for anonymous funding to political parties.
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During the hearings, the bench has been vocal in its inquiries to the Central Government, probing the “selective anonymity” of the scheme and questioning whether it inadvertently legalizes kickbacks to political parties. The bench’s scrutiny reflects a broader concern over the potential for misuse of anonymous donations, with CJI Chandrachud remarking,
“That’s not the object. The object was to add some element of transparency. That’s what Mr. Jaitley says. That this would enhance transparency…”
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The electoral bonds, introduced through the Finance Act of 2017, are promissory notes that can be purchased by individuals or entities, provided they are Indian citizens or established in India. These bonds, which come in multiple denominations, were designed to contribute funds to political parties. The Act amended three other statutes—the RBI Act, the Income Tax Act, and the Representation of People Act—to facilitate the issuance of these bonds by scheduled banks.
The scheme has been contentious, with petitions challenging at least five amendments made through the Finance Act, 2017. Petitioners argue that these amendments have opened the floodgates for unchecked political funding. A significant legal issue at stake is whether the Finance Act could have been legitimately passed as a money bill, which bypasses the need for assent from the Rajya Sabha.
The Central government has defended the scheme, asserting its transparency. However, the Supreme Court has raised concerns about the potential disadvantages for opposition parties, suggesting that the ruling party may have means to access confidential information about donors, thus undermining the anonymity promised by the scheme.
The bench has also pondered over alternative systems for political donations that could mitigate the “serious deficiencies” of the current system.
“We do not want to go back to a cash-only system. We are saying do it in a proportionate, tailor-made system which overcomes the serious deficiencies of this electoral bond system,”
CJI Chandrachud stated.
As the Supreme Court continues to deliberate on the matter, the nation awaits a verdict that could reshape the landscape of political funding in India, with the hope for enhanced transparency and fairness in the democratic process.
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