BJP Receives 57% Of Electoral Bonds In 6 Years, Supreme Court Continues Hearing  (Image:Twitter/SCofInd)

India’s top court is on its third day of hearing the electoral bonds case on Thursday. The crucial hearing is held by a five-judge-bench on a batch of pleas challenging the constitutional validity of the electoral bond scheme, which was introduced in 2017. Through the scheme, anyone in the country could donate money to political parties anonymously. The bench comprises Chief Justice DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra. They have started hearing the four pleas, including those filed by Congress leader Jaya Thakur and the Communist Party of India (Marxist), on Tuesday.

The Association for Democratic Reforms (ADR) is also a petitioner and as per their reports and according to them, in India, the total value of electoral bonds sold from 2017-18 to 2021-22 is estimated Rs 9,208.23 crores. It means seven national parties and 24 regional parties received a total of Rs 9,208 crores through electoral bonds. Of which the ruling Bharatiya Janata Party (BJP) peaks with Rs 5,271.97 crores, over 57% as against the Congress who held the second position with Rs 952 crore, which is only 10%. The rest went to other parties.

What are electoral bonds?

Electoral bonds are generally financial instruments that are used to donate money to political parties. They are interest-free bearer bonds that can be purchased either by companies or by individuals in India through authorized branches of the State Bank of India (SBI).

What is the situation before the introduction of Electoral Bonds Scheme?

• The political parties had to make public all donations above Rs 20,000.
• No corporate company was allowed to make donations amounting to more than 7.5% of their total profit or 10% of revenue.

What the Electoral Bonds Scheme says?

• The electoral bonds scheme was introduced in 2017 by the government as part of a Finance Bill and was implemented in 2018.
• The scheme aims to cleanse the system of political funding in the country.
• According to the central ministry for finance, the bond would be a bearer instrument in the nature of a Promissory Note and an interest free banking instrument.
• The bond can be purchased by a citizen of India or a body incorporated in India.
• The bonds are available to be issued or purchased for any value in multiples of Rs 1,000, Rs 10,000, Rs,1,00,000 and Rs 1,00,00,000, only from the specified branches of the State Bank of India (SBI).
• The bonds would have a life of only 15 days.
• The bond shall be encashed by an eligible political party only through a designated bank account with the authorised bank.
• The name and other information of the donor are not entered on the instrument – and thus they are said to be anonymous.

How the bonds are now purchased?

• The purchaser is facilitated to buy the bonds only on due fulfillment of all the KYC norms, that are mandatory for identifying and verifying the client’s identity, and by making payment from a bank account.
• The KYC details will be kept confidential.
• The bonds are available for purchase for a period of 10 days each in the months of January, April, July and October, as may be specified by the Central Government.
• An additional period of 30 days shall be specified by the Central Government in the year of the General election to the House of People.

Who are eligible to receive funding through the Electoral Bonds?

• Donations can be made only to the political parties registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951).
• Political parties who secured at least 1% of the votes polled in the recent Lok Sabha or State Assembly elections.
• Parties having a verified account from the central election commission.
• The bond amount will be deposited within 15 days of the purchase.

Challenging the scheme at the Supreme Court

• The hearings on a batch of pleas questioning the constitutional validity of the scheme began on October 31.
• Challenges were put forward by the lawyers of petitioners, including senior advocate Prashant Bhushan, Nizam Pasha, Kapil Sibal, Sanjay Hedge and Shadan Farasat.

What the petitioners say?

According to the petitioners, the Electoral Bond Scheme,

1. Violates the citizens fundamental right to information under Article 18(1) a – As per the scheme the fundings of the political party remains undisclosed and anonymous.
2. The scheme enables ruling/ powerful political parties to favour the corporations who pay the parties.
3. Argue that almost all bonds will be received by the party in power.
4. Enables backdoor lobbying.
5. Shell companies can now also be used to make donations. Even a loss-making company or a company that does no business can also take part in the donation process.
6. It leads selective anonymity, as it is possible to investigate on the donations to the opposition using a government agency like the CBI.
7. They are suspicious of corruption – There is a chance the political parties could use the donations in exchange of policy favours.
8. There is a chance the amount can be withdrawn for any other purpose than elections, since no one is permitted to ask about how the party spent the amount.
9. The political party has the right to close the account any time they want. This encourages the protection of criminals from being prosecuted under the Prevention of Corruption Act (PCA) and Prevention of Money Laundering Act (PMLA).
10. According to the ADR, national parties experienced a significant boom in electoral bond donations. They have shown a 743% increase between the financial year of 2017-18 and 2021-22. This implies that, the ruling parties will receive the major denominations while the opposition parties not even receive at least 1%.
11. It provides anonymity to corporate donors but citizens who are donating even Rs 2,000 in cash will disclose their names.
12. An unfair thing to shareholders as by donating to Electoral Bonds the company is not informing the shareholders as to how their money is going to be spent.
13. Even the trading of electoral bonds are prohibited, still there are no ways to stop them.
14. The scheme has no aim to reduce black money but only encourage the rerouting of non-anonymous funding from normal banking channels to anonymous electoral bonds.
15. The scheme is an “alternative white money channel”, said the CPI(M).