“No absolute exemptions…” Electoral Bonds Scheme ‘Unconstitutional’, Supreme Court Strikes Down Anonymous Donations

Supreme Court on Thursday has struck down the Electoral Bonds Scheme, that allowed political parties to receive donation from anonymous sources, and called it unconstitutional. The five-judge Constitution Bench headed by Chief Justice of India DY Chandrachud observed that the Electoral Bonds Scheme violated the right to information under Article 19(1)(a) of the Constitution. The Apex court has ordered the State Bank of India to immediately stop issuing fresh Electoral Bonds. SBI has also been asked to furnish details of the electoral bonds received by political parties to the Election Commission of India (ECI) by March 6. The ECI has been instructed to publish the details on its official website by March 13. 

“Information about funding of political parties is essential for the effective exercise of the choice of voting," observed Chief Justice Chandrachud emphasising on the need of open governance. The unanimous decision of the bench had two specific reasoning behind the order- first, whether the non-disclosure of information on voluntary contributions to political parties are violative of the right to information under Article 19(1)(a) of the Constitution, and second, whether unlimited corporate funding to political parties could come in the way of free and fair elections. Apart from the CJI, the bench also comprised of Justice Sanjiv Khanna, Justice BR Gavai, Justice JB Pardiwala and Justice Manoj Misra

Supreme Court said that “the right to privacy of political affiliation doesn’t extend to contributions made to influence public policy and applies only to contributions below the threshold”. The Centre had submitted that the scheme would help curb black money, but the SC rejected the submission underlining “transparency in political funding can not be achieved by granting absolute exemptions”.

Electoral Bonds were introduced by the Centre on January 2, 2018, as a system through which companies and individuals in India could donate to political parties anonymously. Centre’s argument so far has been - that would ensure only white money is pumped into politics through proper banking channel and also by allowing donors to remain anonymous, there won’t be fears of political retribution. Congress leader Dr. Jaya Thakur, the Communist Party of India (Marxist), and the NGO Association for Democratic Reforms (ADR) challenged the scheme by contending that it opens the “floodgates” to anonymous political funding.

Between 2017-2022 BJP has been the biggest beneficiary of the overall electoral bonds, according to ECI data BJP has received ₹5,272 crore and the Congress received ₹952 crore through electoral bonds.