The Supreme Court has given an excellent decision by banning the business of election donations.


Giving a major decision today, the Supreme Court has declared the old electoral bond scheme for raising funds for political parties illegal and has immediately banned taking donations through it. The Supreme Court has said that maintaining secrecy of electoral bonds is unconstitutional. This scheme violates the Right to Information. A bench of five judges formed under the leadership of Chief Justice DY Chandrachud has given the verdict unanimously. The bench includes Justice Sanjiv Khanna, Justice BR Gavai, Justice JB Pardiwala and Justice Manoj Mishra.

In his decision, the Chief Justice has said that political parties are important units in the political process. Information about political funding is the process by which the voter gets the right choice to cast his vote. Voters have the right to know about election funding. Due to which the right selection is made for voting. A five-judge bench headed by Chief Justice DY Chandrachud had reserved its decision in this case on November 2, 2023, after hearing it continuously for three days.

The petitioners include Association for Democratic Reforms (ADR), Congress leader Daya Thakur and CPI(M). The petitioners, while challenging the Central Government’s electoral bond scheme in the Supreme Court, had termed several amendments made in the Finance Act 2017 and Finance Act 2016 to implement this scheme as wrong. The petitioners claim that due to this, political parties are getting funding without investigation and paying taxes.

The then Finance Minister Arun Jaitley had introduced the Electoral Bond Scheme in the 2017 budget. Which was notified by the Central Government on 2 January 2018. This plan was challenged at the same time. But the hearing started in 2019. On 12 April 2019, the Supreme Court had directed all political parties to give all the information related to electoral bonds to the Election Commission in an envelope by 30 May 2019. However, the court did not ban this plan at that time.

Later in December 2019, the petitioner Association for Democratic Reforms filed an application in the Supreme Court to stay the scheme. In this, quoting media reports, it was told how the Central Government had ignored the concerns of the Election Commission and the Reserve Bank on the electoral bond scheme. The Election Commission had also given its negative opinion on this. The Election Commission believed that by keeping the names of the donors anonymous, it would not be possible to find out whether the political party has taken donations in violation of Section 29(B) or not. The law regarding taking foreign donations will also become useless. The Reserve Bank of India believed that electoral bonds would promote money laundering. Through this it will be possible to convert black money into white. After the objection of the Election Commission and the Reserve Bank, the decision of the Supreme Court can be considered historic in itself.

Before this decision of the Supreme Court, the Central Government had told the Lok Sabha on February 5 that electoral bonds worth Rs 16,518 crore have been sold in 30 installments through the State Bank of India (SBI). In response to a question asked by Congress MP Manish Tewari in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary had said that the total value of electoral bonds (Phase 01 to Phase 30) purchased from State Bank of India is about Rs 16,518 crore. Chaudhary had said that the Center has paid a commission of Rs 8.57 crore to SBI for issuing and encashing electoral bonds for the first 25 phases. Apart from this, it has so far paid Rs 1.90 crore to Security Printing and Minting Corporation of India Limited (SPMCIL).

Chaudhary had told that the Central Government had notified the Electoral Bond Scheme on January 2, 2018. Its main objective was to ensure that clean tax paid money comes into the system of political funding through proper banking channels. However, the names of the donors remained anonymous and outside the scope of RTI. These bonds were issued specifically for contribution of funds to political parties and could be purchased only at the branches of State Bank of India. Only the party which was registered under Section 29 of the Representation of the People Act, 1951, had the right to receive donations through electoral bonds. Who has got at least 1 percent votes in the Lok Sabha or Assembly elections.

There are approximately 1900 parties registered with the Election Commission in India. There are hundreds of parties among them which have never contested elections. This makes it clear that something is definitely wrong. Registered political parties of the country are exempted from income tax under Section 13A of the Income Tax Act, 1961. There is no maximum limit for taking donations or donations. They have to present before the Election Commission the details of only those transactions which are Rs 20 thousand or more. He does not have to account for any amount less than this. Taking advantage of this, various political parties have been accused of converting black money into white and spending unaccounted black money in elections. This is the reason why hundreds of parties do not contest elections but are registered as political parties.

The ruling BJP at the Center and the main opposition party Congress have benefited the most from the Electoral Bond Scheme. According to the Election Commission, in 2018-19, BJP received donations of Rs 1450 crore and Congress received donations of Rs 383 crore through electoral bonds. Whereas in 2019-20, BJP got Rs 2555 crore and Congress got Rs 318 crore. Even during the Corona period of 2020-21, BJP had received Rs 22.38 crore and Congress had received Rs 10.07 crore. In 2021-22, BJP received Rs 1032 crore and Congress received Rs 236 crore in donations. In this way, from 2018 to 2022, BJP received Rs 5059.38 crore and Congress received Rs 947.07 crore. Other regional parties including the ruling Trinamool Congress in West Bengal have also received large amounts of donations under this scheme.

Any political party that comes to power by spending unaccounted money like water in elections can never promote public welfare policies. Therefore, it has become the need of the hour to remove financial irregularities of political parties. However, it cannot be denied that all the efforts made so far in this regard have proved inadequate. In this direction, this decision of the Supreme Court will definitely put a stop to the dirty business of donations going on in politics, which will be a new initiative in the direction of political purity.

-Ramesh Saraf Dhamora

(The author is an independent journalist accredited by the Government of Rajasthan)

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