New Delhi: A five-judge bench of the Supreme Court on Tuesday started hearing a batch of petitions challenging the electoral bonds scheme & its constitutional validity.

Electoral bonds were brought into practice to curb corruption & flow of black money in politics but they themselves have landed up in controversy over alleged role in stockpiling of slush funds for various political parties.
Electoral bonds maintain a cloud of secrecy over its donors and thus lately have come under fire from various quarters. The anonymity & opacity that the electoral bonds have brought in political system has come to haunt those who advocated for its launch.

Meanwhile, the Centre told Supreme Court on Monday that voters don’t have right to know about funding of political parties.

Why concern over electoral bonds?

The petitioners have raised multiple questions about the Electoral bonds. Questions have arisen over the goal achieved in 5 years of its roll-out and how the opacity has led to more doubts than assurance.

Lack of transparency has come as the biggest concern in funding the political party.

As the donor’s identity is not revealed either to public or the poll panel, this takes it out of purview of public watch.

The opacity and lack of transparency gives rise to concern that this may allow miscreants to launder money in the political system.

To break it down into further, here is a primer on Electoral Bonds and how it impacts the political sphere.

What are Electoral Bonds?

The electoral bonds were brought into operation by the Ministry of Finance in 2018. The notification said that this was done to ‘purge’ the system of corruption & black money flow.

This paved the way for bigger corporations & individuals to make their political donations without revealing their identity, however, it has increasingly come under cloud over dubious funding by malafide elements.

Who can buy these bonds and from where?

The electoral bonds was conceived with an objective of promoting political funding by institutions and private conglomerates , however, within years, multiple allegations have surfaced about its efficacy & efficiency.

Electoral bonds are interest-free banking instruments and any citizen can purchase it. It can be purchased in several denominations ranging from Rs 1,000 to Rs 1 crore, from some selected branches of the State Bank of India (SBI).

One condition for availing electoral bond is that one has to have a bank account for buying electoral bonds. The bonds won’t have name of any bank payee and it can be used to make donations to political parties.

The electoral bonds can be encashed at designated bank accounts by the respective parties.

What petitioners have demanded?

There are two petitions filed in the Apex Court regarding electoral bonds.

One of the PIL petitioners has claimed that till date, more than 12,000 crore has flown into account of political parties via electoral bonds and almost two-thirds of it has gone to one major political party.

Other petition claimed that the donation to political parties was comparable to cash contribution and hence gives enough room for pushing corruption.

Which parties got what in bonds

Meanwhile, the Association for Democratic Reforms (ADR) report in its March 2023 report showed a remarkable jump in political funding via electoral bonds. It said that 66% of income of top parties came via electoral bonds.

Election Commission data also showed that top 4 political parties including BJP, TMC, Congress and NCP garnered 55.09% of their total income through electoral bonds in 2021-22.