December 10, 2019
December 10, 2019


On April 12, 2019, the Supreme Court passed an interim order on the constitutional challenge to the government’s Electoral Bond Scheme, 2018. The Apex Court in its interim order refused to withdraw the scheme of electoral bonds. However in its interim order the Court directed all the political parties to submit receipts of amounts received and details of identity of donors in a sealed cover to the Election Commission by 30th of May 2019. The Supreme Court while passing the interim order contended that if the identity of the buyers of electoral bonds is not known then the efforts of the government to curtail black money in elections would be rendered futile. However the CJI Ranjan Gogoi was of the opinion that such an issue requires detailed consideration. As a result the Court did not pronounce the final verdict on 12th of April.
In January, 2018, the Central Government notified the Electoral Bond Scheme 2018 with an aim to ensure transparency in political funding. An electoral bond is like a promissory note which would be payable to the bearer on demand and free of interest. These bonds can be purchased by any citizen of India or a body incorporated in India. Apart from that only those political parties are eligible for electoral bonds that are registered under Section 29A of the Representation of the Peoples Act, 1951 and have secured no less than one per cent votes in the last LokSabha elections. Apart from that every political party would be allotted a verified account by the Election Commission and all the electoral bond transactions can be done through this account only.
As per the provisions of this scheme electoral bonds can be purchased from the branches of the State Bank of India (SBI) only, in the denominations ranging from Rs 1,000 to Rs 1 crore. The bonds will remain valid for 15 days and can later be encashed by the political party only through a bank account with the authorized bank within that period only. In order to purchase these electoral bonds every donor has to provide his/her KYC detail to the banks. However, the names of the donors will be kept confidential.
The influx of the government’s electoral bond scheme is a retrograde step which majorly amends the transparency in our democratic system. The scheme of electoral bonds has been a subject to a lot of criticism because it threatens our future of electoral democracy per se. Government’s move to remove cap on donations of money to political parties by corporations and the rule of maintaining anonymity of the donor will only increase the corporate and political nexus to work towards the fulfilment of their own selfish aims.
The basket of anonymity encourages corruption and defies safeguard which was meant to ensure transparency. The salient feature of this scheme is that that a bondholder is not only supposed to keep back the details of its purchase but also that the parties on the other end, receiving the donations are supposed to suppress the donor’s identity. This feature disregards Art. 19(1)(a) of our Constitution which deals with right to freedom of speech and expression. The public is supposed to know about every single ounce of information that explicitly gives them the right to express themselves during the process of election. It was in same vein that the Apex Court in the case of PUCL v. Union of India [AIR 2003 SC 2363] held that while the right to vote may not be a fundamental right, the right to make a choice by means of the ballot is an imminent part of the right to freedom of expression.
The Electoral Bond Scheme also violates Article 14 of the Constitution.  As per this scheme the bonds are mandated to be received only by those political parties which are registered under the Representation of the People’s Act. This provision stems out of Clause 3(30 of the Scheme. A further condition is that the party must have received not less than 1% of the votes polled in the previous election whether to Parliament or to the Legislative Assembly.This falls flat on the face of Article 14 as the new/independent candidates will not be suitable to receive bonds and would be deprived of funding and fairness per se.
The basic intention of government behind bringing such a system of electoral bonds was to make political funding transparent and free of corruption. However at the root level this scheme is hardly empowering anyone. The government’s theory of maintaining the invisible coat is well comprehended but the amount of money that each political party is receiving should be kept account of. Further this data needs to be in public domain as it will help the voter in making decision thereby striking a right balance between transparency and free and fair democracy. Even the global evidence suggests much of the transparency and accountability in well-functioning democracies have come through strong records of disclosures and strict scrutiny of accounts of parties and candidates receiving funds.
However the discrepancies of electoral bond scheme can be removed by bringing a system of national election fund which would help to cater to a particular cause and can be requested by the political parties for their rational cause. Another way of improving the current situation is by bringing a system of state funding of elections. State funding of elections was originally recommended by Indrajit Gupta Committee in 1998 to create the same ground to sow or reap for all parties. The present statistics reveal that most of the national parties have undisclosed funding of almost 70 per cent. This can only be curbed by state funding, wherein funds received by every political party would be recorded easily and thus every candidate will get a fair representation.




Alivya Sahay is a 3rd year law student at Chanakya National Law University.








Raj Krishna is a 5th year law student at Chanakya National  Law University.







In content picture credit: The Hindu Business Line

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