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India's Supreme Court abolishes electoral bond system
India's Supreme Court declared electoral bonds unconstitutional ahead of the upcoming general election
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Supreme Court has declared the electoral bond system as unconstitutional / https://www.sci.gov.in/
Months before the general elections in India, the Supreme Court has declared the electoral bond system, a seven-year-old method of funding political parties, as unconstitutional.
The system, which allowed individuals and companies to donate money to political parties anonymously and without any limits, has been scrapped amid concerns that it hindered transparency and the public's right to know about political funding.
Introduced in 2017 by PM Modi-led Bharatiya Janata Party (BJP), the electoral bond system faced opposition from rival parties and civil society groups who argued that it facilitated undisclosed financial contributions to political parties.
The apex court’s ruling, delivered by a five-judge bench led by Chief Justice DY Chandrachud, termed the system unconstitutional and directed the State Bank of India (SBI) to cease issuing these bonds. The SBI was also asked to disclose identity details of bond purchasers and information about bonds redeemed by each political party.
In his ruling, Chandrachud emphasized that political contributions through this system granted undue influence over policy-making. "Political contributions give a seat at the table to the contributor... this access also translates into influence over policy-making,” he said.
Under the electoral bond system, individuals and companies could purchase bonds ranging from ₹ 1,000 ($12) to ₹ 10,00,000 ($12000) from the state-run SBI and donate them to a political party of their choice.
The bonds, exempted from tax, did not disclose the name of the donor. Since their introduction in 2018, electoral bonds have become a significant method of political funding, with concerns raised about the potential for government access to donor information through the state-owned SBI.
While the court scrapped the electoral bond system, it reinstated corporate donation limits, highlighting the need to treat companies and individuals differently in the context of political contributions. The court also argued that corporate donations could lead to quid pro quo arrangements, emphasizing the higher ability of companies to influence the electoral process compared to individuals.
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