The Supreme Court is set to rule on a batch of petitions challenging the validity of the electoral bonds scheme, which allows corporates and individuals to anonymously donate to political parties by purchasing electoral bonds from the State Bank of India (SBI).

A five-judge Constitution bench headed by Chief Justice DY Chandrachud had reserved its verdict in the matter on November 2 last year.

The scheme, notified by the government on January 2, 2018, was promoted as an alternative to cash donations to political parties as part of efforts to increase transparency in political funding.

Under the provisions of the scheme, any Indian citizen or entity registered or established in the country can purchase electoral bonds. Individuals can purchase electoral bonds alone or jointly with other individuals.

Only political parties registered under Section 29A of the Representation of the People Act, 1951 and obtaining not less than 1% of the votes cast in the last Lok Sabha or State Legislative Assembly elections are eligible for electoral bonds. According to the notification, electoral bonds can only be encashed by eligible political parties through accounts in authorized banks.

In April 2019, the Supreme Court refused to stay the electoral bonds scheme and made it clear that the appeal would be heard in depth as the Center and the Election Commission had raised “significant issues” that would have “huge implications for the election”. the sanctity of the country’s electoral process.”

The Constitution bench, which also included Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra, began hearing arguments on October 31 last year on four petitions, including those of Communist Party of India (Marxist) Congress leader Jaya Petition filed by Jaya Thakur. and the NGO Association for Democratic Reforms (ADR).

During the hearing on the matter, the Supreme Court emphasized the need to reduce the cash component of the electoral process.

What do the petitioners say?

The petitioners in the case are Association for Democratic Reforms (ADR), Communist Party of India (Marxist) and Dr Jaya Thakur, challenging the amendments proposed in the Finance Act, 2017, which provided for the electoral bonds scheme paved the way.

The petitioners argue that the anonymity of electoral bonds affects the transparency of political funding and violates voters’ right to information, which is sacrosanct in a democracy.

The Modi government, on the other hand, is defending the scheme as a way to ensure that “white” money is channeled through appropriate banking channels for political financing.

The government further argued that the anonymity of the bonds was necessary to keep the identities of the donors secret so that they would not face any retaliation from the political parties.

BJP gets nearly Rs 1,300 crore through electoral bonds in 2022-23

The ruling Bharatiya Janata Party received nearly Rs 1,300 crore through electoral bonds in 2022-23, seven times what the Congress got through the same route in the same period. According to the party’s annual audit report submitted to the Election Commission, the party’s total donations in the financial year 2022-23 were Rs 2,120 crore, of which 61% came from electoral bonds.

In the financial year 2021-22, the party’s total donations reached Rs 1,775 crore. The party’s total revenue for the 2022-23 financial year was Rs 2,360.8 billion, up from Rs 1,917 crore in the 2021-22 financial year.

The Congress party, on the other hand, received Rs 171 crore from electoral bonds, down from Rs 236 crore in 2021-22. The Bharatiya Janata Party and the Congress are recognized national parties. The Samajwadi Party, a recognized national party, earned Rs 320 crore through electoral bonds in 2021-22. It received no contributions from those bonds in 2022-23.

How to buy electoral bonds

Any Indian citizen or company registered in India can purchase. Electoral bonds can be purchased from State Bank of India branches in one of the cities listed by the government.

The bonds are interest-free and individuals and businesses interested in buying them must first complete prerequisites such as the bank’s KYC (Know Your Customer) for identity verification. It can be purchased in various denominations, ranging from Rs 1,000 to Rs 1 crore.

The bond will not bear the name of the recipient and is valid for only 15 days, during which time it can be used to donate to political parties that meet certain criteria. Electoral bonds can only be redeemed through bank accounts designated by political parties.

Political parties registered under Section 29A of the Representation of the People Act, 1951 and obtaining not less than 1% of the votes cast in the last Lok Sabha or State Legislative Assembly elections are eligible for electoral bonds.

(with PTI input)