The Supreme Court is currently examining the Electoral Bond Scheme, which has raised significant concerns regarding the anonymity of political donations and potential corruption. The scheme was introduced through amendments to four key legislations: the Foreign Contribution Regulation Act, 2010 (FCRA), Representation of the People Act, 1951 (RPA), Income Tax (IT) Act, 1961, and the Companies Act, 2013.
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Advocate Prashant Bhushan, representing the petitioners, argued that 99% of Electoral Bonds benefited the ruling parties at both the Centre and State levels, leaving opposition parties with less than 1% of the bonds. He emphasized that the BJP alone declared donations through Electoral Bonds amounting to over three times the total donations declared by all other national parties combined.
Bhushan highlighted that the Electoral Bond Scheme was introduced by amending various legislations, which exempted political parties from disclosing contributions received through these bonds. He stated,
“Everywhere electoral bonds have not only been introduced, they have been exempted from disclosure under the Companies Act, Income Tax Act, Representation of People Act etc. It has on one hand introduced an opaque instrument – by which nobody can come to know other than the government. It is only the government which will know who contributed to whom.”
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He further argued that the anonymity of these bonds potentially violated citizens’ fundamental right to information under Article 19(1)(a). Bhushan contended that the bonds, being bearer instruments, were transferable, allowing for potential misuse and lack of transparency in political funding.
Senior Advocate Kapil Sibal, representing another petitioner, argued that the scheme was designed to protect criminals from prosecution under the Prevention of Corruption Act and the Prevention of Money Laundering Act. He stated,
“You don’t know who bribed whom.” Sibal also highlighted that the scheme allowed political parties to spend the funds as they saw fit, suggesting, “It is a means for political parties to be enriched.”
Advocate Nizam Pasha argued that the scheme exhibited elements of manifest arbitrariness. He drew attention to the eligibility criteria for purchasing Electoral Bonds, emphasizing that even foreign entities could purchase the bonds through their Indian subsidiaries. Pasha said,
“We don’t permit investments by an entity which has 51% foreign shares in let’s say media because we don’t want foreign control of our media. But we have no problem in allowing such a company to purchase bonds and transfer it to political parties- an entity that runs the country!”
Chief Justice of India DY Chandrachud, during the hearing, remarked on the potential knowledge of the donee regarding the sources of the bonds,
“Another point you may want to also explore is that this is not an anonymised donation in relation to a donee. It’s anonymised donation in relation to the rest of society. The donee may or may not but could know of the sources.”
The case continues to be under deliberation, with the Supreme Court set to hear further arguments on the matter.
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