BY THE EDITOR
The cloud over the electoral bonds scheme is likely to be cleared once the Supreme Court takes up hearing of a slew of petitions challenging it. The apex court fixed October 31 for the hearing after the petitioners submitted that the legality of the scheme should be decided before the 2024 general election. The top court of the country has agreed to focus primarily on the issue of legalisation of anonymous donations to political parties and that it violates the citizens’ right to know about funding of political parties. The two issues together are said to violate Articles 19, 14 and 21 of the Constitution. The challenge is to the Finance Act, 2017 which introduced the scheme; it also removed the previous cap of 7.5 per cent of the company’s average three-year net profit for political donations. Donating companies are not required to name the beneficiary political parties and names of donors are also not required to be revealed to the public.
At the time of introduction, the government had said the country needed to have transparency in the matter of donations to political parties for the sake of free and fair elections; it said political parties received most of their funds through anonymous sources and which were shown in cash and, therefore, the political funding system needed to be cleansed. However, the petitioners argue that the amendments introduced would lead to opaqueness and also increase the possibility of black money and corruption. As for the electoral bonds, these are interest-free bearer instruments used to donate money to political parties without being named. These can be purchased from the State Bank of India through cheques or digitally and cash is not allowed. An individual or company can purchase as many bonds they may want and the political parties are required to encash these within 15 days of receipt to meet their electoral expenses.
However, the petitioners – Communist Party of India (Marxist), and NGOs Common Cause and Association of Democratic Reforms (ADR)-find the scheme “an obscure funding system which is unchecked by any authority”. They also say that
the amendments to the Companies Act 2013 will lead to “private corporate interests taking precedence over the needs and rights of the people of the State in policy considerations”. They have even claimed that because the government owns the SBI it can potentially find out who are funding the parties in the opposition and can even victimise them. Measures are required to ensure there is increased transparency in the scheme and the whole gamut of funding of political parties, just what the scheme had set out to achieve.