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Polity & Governance
Mahesh

17/10/23 05:57 AM IST

Supreme Court refers electoral bonds case to 5-judge Constitution Bench

In News
  • Chief Justice of India D.Y. Chandrachud  referred the challenge to the validity of the electoral bonds scheme, which facilitates anonymous donations to political parties, to a Constitution Bench of five judges.
Electoral bonds
  • The central idea behind the electoral bonds scheme was to bring about transparency in electoral funding in India.
  • These bonds were introduced in 2018.
  • Electoral bonds can be bought only during specific windows of time.
  • They serve as a means for individuals and entities to make donations to registered political parties while maintaining donor anonymity.
  • State Bank of India (SBI) issues the bonds in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore.
  • Payable to the bearer on demand and interest-free.
  • Purchased by Indian citizens or entities established in India.
  • Can be bought individually or jointly with other individuals.
Criticism
  • Electoral bonds are donations to political parties that hide the identity of the donors and recipients. They may compromise the right to know, which is part of the right to freedom of expression under Article 19 of the Constitution.
  • Anonymity may be compromised by government access to donor data. This implies that the government in power can leverage this information and disrupt free and fair elections.
  • Potential for unauthorized donations violating regulations.
  • As per Companies Act 2013, a company can make a political contribution only if its net average profit of three preceding financial years is at 7.5%. The removal of this clause has raised concerns of black money in political funding through shell companies.
About petition
  • The amendments have removed the caps on campaign donations by companies and have legalised anonymous donations.
  • The Finance Act of 2017 has introduced the use of electoral bonds which are exempt from disclosure under the Representation of Peoples Act, 1951, opening doors to unchecked, unknown funding to political parties.
  • The Finance Act, 2016, had also amended the Foreign Contribution Regulation Act, 2010, to allow foreign companies with subsidiaries in India to fund political parties in India, effectively, “exposing Indian politics and democracy to international lobbyists.
Source- The Hindu

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