The Supreme Court has declared the Electoral Bonds Scheme as unconstitutional. In a landmark unanimous judgment, the Supreme Court on Thursday (15.02.2024) struck down as “unconstitutional and manifestly arbitrary” the electoral bonds scheme, which provides blanket anonymity to political donors, as well as critical legal amendments allowing rich corporations to make unlimited political donations.
A five-judge Bench headed by Chief Justice of India D.Y. Chandrachud held that the Union government’s scheme, and preceding amendments made to the Representation of the People Act, the Companies Act, and the Income Tax Act, violated the voters’ right to information about political funding under Article 19(1)(a) of the Constitution.
The lead opinion authored by Chief Justice Chandrachud said that the absolute non-disclosure of the source of political funding through electoral bonds promoted corruption, and a culture of quid pro quo with the ruling party to introduce a policy change or for bagging a license. The scheme and the amendments authorized “unrestrained influence of corporates in the electoral process”, it said.
Donor anonymity was the main feature of the scheme, which has been criticised for long by transparency activists. These bonds constituted an important means of funding political parties since 2018. The court found that the scheme violated the citizens’ right to information about the sources of finances raised by political parties. It directed the full disclosure of all details of contributors, recipient parties and denominations.
(An electoral bond is in the nature of a promissory note which shall be a bearer banking instrument that does not carry the name of the buyer or payee. Any citizen or company could buy these bonds in denominations of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore and donate it to a political party. It can be encashed only through a bank account with an authorized bank. The State Bank of India was the bank authorized to issue and encash these bonds.)
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