- A five-judge bench of the Supreme Court is set to hear a batch of petitions challenging the constitutional validity of the Centre’s electoral bonds scheme.
- Notified on January 2, 2018, the scheme introduced instruments through which anyone in the country could donate money to political parties anonymously.
What are electoral bonds?
- First announced during the Union Budget session in 2017, “electoral bonds” are interest-free “bearer instruments”, which means that they are payable to the bearer on demand, similar to a promissory note.
- Essentially, electoral bonds allow Indian citizens or a body incorporated in India to purchase bonds, enabling anonymous donations to political parties.
- Usually sold in denominations ranging from Rs1,000 to Rs1 crore, these bonds can be bought from authorised SBI branches through accounts complying with KYC norms. Following this, the political parties can choose to encash the bonds within 15 days of receiving them and fund their electoral expenses.
- However, they aren’t available for purchase throughout the year and can only be purchased between 10-day windows falling in the months of January, April, July, and October.
- Importantly, electoral bonds can only be used to donate to political parties registered under Section 29A of the Representation of the Peoples Act, 1951, securing at least 1% of the votes polled in the last election to the House of the People or a Legislative Assembly.
- Section 29A of the RPA deals with the registration of associations and bodies as political parties with the Election Commission.
What has the ECI’s stance been?
- The ECI objected to the amendments in the RPA exempting political parties from disclosing donations received through electoral bonds while describing the move as a “retrograde step”.
- The Commission even asked the government to “reconsider” and “modify” the above amendment.