Electoral bonds : which influence political funding.

Electoral bonds are a way for people and companies in India to donate money to political parties. These bonds are like vouchers that can be bought from certain branches of state bank of india (SBI) and then given to political parties..electoral bonds is a straightforward process. The bonds will be issued in multiples of RS 1,000, RS 10000, RS 100,000 and RS 1 crore.The special thing about them is that the donor's identity doesn't have to be revealed

The scheme was introduced in The Finance Bill, 2017 during the Union Budget 2017-18 by then Finance Minister late Shri Arun Jaitley. It was accompanied by amendments to existing legislation, including the Representation of the People Act,1951 and the Companies Act ,2013.

electoral bonds has effectively abolished the ceiling on contributions made by corporations, which was earlier limited to 7.5% of the organization average net earnings over the preceding three-year period. An amendment to the Companies Act, 2013 ensured this change.

Electoral bonds have been a subject of controversy and criticism. Some argue that they undermine transparency in political funding by allowing donors to remain anonymous, potentially opening the door to corruption and misuse of funds. Critics also point out that the lack of disclosure requirements makes it difficult to track the sources of political contributions, which could influence policy decisions.

The government had argued that the scheme was intended to curb black money which is given to political parties in the form of donations and ensure that contributions to parties flow through legitimate banking channels.

In a landmark unanimous judgement, the Supreme Court struck down as “unconstitutional and manifestly arbitrary” the electoral bonds scheme, which provides blanket anonymity to political donors.A five-judge Constitution bench comprising Chief Justice of India D. Y. Chandrachud, Justices Sanjiv Khanna, justice BR Gavai, justice JB Pardiwala and justice Manoj Misra pronounce the judgement on the petitions challenging the Electoral Bonds Scheme.

In its two separate but unanimous verdicts , the court also directed the SBI, the authorised financial institution under the scheme, to submit by March 12 the details of electoral bonds purchased since April 12, 2019 till date to the Election Commission which will publish the information on its official website by March 15.

The bench held that the scheme does not satisfy the least restrictive test necessary for imposing curbs under Article 19(2) on the right to information under Article 19(1)(a) of the Constitution. “The purpose of curbing black money is not traceable to any of the grounds in Article 19(2) which is reasonable restrictions to the 19(1)(a).

Supreme Court finally passed its final judgement in the case in February 2024, it asked for only data related to electoral bonds bought and encashed after the interim order of April 12, 2019 to be made public.