India’s Supreme Court strikes down electoral bonds
20-Feb-2024In a landmark decision, the Supreme Court on Thursday invalidated the electoral bonds scheme, terming it unconstitutional.
In a landmark decision, the Supreme Court on Thursday invalidated the electoral bonds scheme, terming it unconstitutional. The ruling, which comes just months ahead of the Lok Sabha elections, was delivered by a five-judge Constitution Bench, putting an end to a contentious method of political funding that has been under scrutiny since its inception.
The Supreme Court directed the issuing bank, State Bank of India (SBI), to cease issuing electoral bonds with immediate effect."Electoral bonds scheme is violative of Article 19(1)(a) and unconstitutional. Amendment to Companies Act are unconstitutional. The issuing bank shall forthwith stop the issue of electoral bonds," Chief Justice of India DY Chandrachud said in the verdict.
"SBI shall furnish the details of donations through electoral bonds and the details of the political parties which received the contributions. SBI shall furnish the details of electoral bonds encashed by the political parties. SBI shall submit the details to the ECI in three weeks and ECI shall publish these details on the website," the Chief Justice said.
3 petitioners had approached the Supreme Court challenging the amendments made by the Finance Act 2017 that created the electoral bonds scheme. They argued that the secrecy surrounding these bonds reduces transparency in political funding and violates voters' right to know. They also said the scheme allows contributions from shell companies.
The central government defended the scheme, saying it ensures that only legitimate money is used for political funding through proper banking channels. They argued that keeping donors' identities secret protects them from retaliation by political parties.
However, during the hearing, the court asked the government about the scheme's selective anonymity and raised concerns about it legalising kickbacks for parties. The bench also questioned why the limit on how much companies can donate to political parties was removed, allowing them to give more than before.
