What are electoral bonds and why has it attracted numerous controversies and debates in the past few months? Electoral bond works as an instrument through which Indian Citizens or business entities established in India can donate funds to political parties. These bonds can be bought from any authorized branch of the State Bank of India through cheques or digital mechanisms. Electoral bonds have sparked controversy due to concerns over anonymity of donors, lack of disclosure, and potential for misuse.
These bonds were introduced by the Finance Act 2017 by amending various provisions of law like The Reserve Bank of India Act (RBI Act), Income tax Act, Contribution Regulation Act (FCRA Act) and Representation of People Act (ROA Act).
The scheme encountered significant opposition and faced legal challenge in the Supreme Court by multiple NGOs and political entities, including the Communist Party of India. Concerns centered on the potential for unrestricted corporate funding, serious impact on transparency in political finance, and the risk of foreign interference in India’s democratic processes. These apprehensions underscored the imperative for heightened transparency and safeguards in electoral funding to preserve the integrity of the nation’s political system.
Last month, the Supreme Court deemed the electoral bond scheme “unconstitutional,” citing its infringement upon citizens’ right to information, marking a significant legal development. The court ordered SBI to provide details of Electoral Bonds to the Election Commission of India, submitted on 12 March, which will now be published by 15 March, in compliance with a Supreme Court order. “In compliance of the Hon’ble Supreme Court’s directions to the SBI, contained in its order dated Feb 15 & March 11, 2024 (in the matter of WPC NO.880 of 2017), data on electoral bonds has been supplied by the State Bank of India to the Election Commission of India, today, March 12, 2024,”the poll panel had said.