The Supreme Court of India invalidated the Central Government’s Electoral Bond scheme which allows anonymous funding to political parties. The top court held the bonds violate the right to information (RTI) and Article 19(1) and held the scheme has been dismissed for being ‘unconstitutional’.
The Bench headed by Chief Justice DY Chandrachud and comprising Justices Sanjeev Khanna, BR Gavai, JB Pardiwala and Manoj Mishra, pronounced political parties are significant aspects of the electoral process and thus, information about the funding the parties receive is important when making electoral choices.
While delivering the order, the apex court instructed the State Bank of India or SBI, the only bank which is authorised to issue or encash electoral bonds to forthwith stop issuing any such bonds. It asked the SBI to furnish all the details of Electoral Bonds enchashed by the political parties.
The Constitution Bench had reserved its decision on November 2 last year. The electoral bonds scheme, implemented by the government on January 2, 2018, was introduced as a solution to replace cash donations and enhance transparency in political funding.
The SBI is required to submit the details of electoral bonds purchased since the interim order of the court dated April 12, 2019 till date to the Election Commission of India. The details demanded are the date of purchase of each electoral bond, the name of the purchaser of the bond and the denomination of the electoral bond purchased.
SBI must disclose details of each electoral bond encashed by political parties which will include the date of engagement and the denomination of the electoral bonds. The SBI is required to submit the above information to the ECI within three weeks from the date of this judgement that is by March 6, 2024.
Electoral bonds function as a financial instrument, allowing individuals and businesses to contribute funds to political parties discreetly, without disclosing their identities.
As per the provisions of the scheme, any citizen of Bharat or entity incorporated or established in the country can purchase these bonds, available in various denominations ranging from ₹1,000 to ₹1 crore. These bonds can be obtained at all branches of the SBI, and the donations made through them are interest-free.
