In a significant judgement, the Supreme Court of India has struck down several provisions of the Electoral Bond Scheme, a financial instrument introduced by the Government of India in 2018. This scheme was designed to facilitate political donations to political parties by allowing individuals and corporate entities to purchase electoral bonds from authorized banks and donate them to the party of their choice. The bonds could then be redeemed by the political parties within a specified period. The objective of the Electoral Bond Scheme was to promote transparency in political funding by channeling donations through banking channels while maintaining the anonymity of the donor. However, critics have argued that the scheme lacks transparency and accountability, as the identity of the donor is not disclosed to the public or the Election Commission. Responding to a petition filed by the Association for Democratic Reforms (ADR) and other organizations, the Supreme Court ruled that the Electoral Bonds scheme is violative of Article 19(1)(a) and is unconstitutional, and allows the potential misuse of funds, which undermines the integrity of the electoral process. Supreme Court has also ordered banks to forthwith stop issuing Electoral Bonds.
IMPLICATIONS OF SC VERDICT: This decision has several implications for political parties in India. Firstly, the ruling emphasizes the importance of transparency in political funding. It highlights the need for political parties to disclose the sources of their funding to ensure accountability and prevent the influence of undisclosed and potentially illicit funds. This decision aims to hold political parties accountable for their financial transactions and ensure that they adhere to ethical practices in accepting donations. It may lead to stricter regulations and scrutiny of political funding in the future. Furthermore, the Supreme Court's ruling underscores the need for comprehensive electoral reforms to address issues related to political funding, transparency, and accountability. It may prompt the government and Election Commission to review and revise existing laws and regulations governing political donations. The decision may also impact the financial resources available to political parties. The Electoral Bond Scheme provided a significant avenue for fundraising, and parties may now need to explore alternative means of funding and engage in more transparent fundraising practices.
OPTIONS BEFORE CENTRE: It is important to note that the Supreme Court's decision does not completely abolish the Electoral Bond Scheme but strikes down certain provisions. The government has the option to review and modify the scheme based on the court's observations. The central govt has three major options. Accept the verdict and comply with it. Second, file a review petition with the Supreme Court. It can also bring an ordinance and nullify the verdict.