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SC strikes down Electoral Bonds Scheme, calls it Unconstitutional


Prelims: Polity (schemes), Electoral Bonds.
Mains: General Studies II –  Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation. 

Why in News ?

In a landmark unanimous judgment, the Supreme Court on Thursday struck down as “unconstitutional and manifestly arbitrary” the electoral bonds scheme.

Key Facts

SC says voters’ Right to Information under Art 19(1) about political funding is violated.


Why are Electoral Bonds Unconstitutional?

The court has held that the scheme is unconstitutional because:

  • It violates right to information: The scheme hides the source of funding of political parties from the public, which is a fundamental right under Article 19(1)(a). 
  • It violates the principle of equality: The scheme discriminates between different political parties based on their vote share, giving an unfair advantage to the ruling party and the major opposition parties
  • It violates the constitutional scheme of electoral reforms: The scheme goes against the constitutional aim of curbing corruption and criminalization of politics. The scheme is also contrary to the recommendations of various committees and commissions that have called for more transparency and disclosure in political funding. 
  • Lack of Proportionality between scheme and obj : The restrictions imposed by the electoral bond scheme on the right to information are disproportionate to the objectives of curbing black money in electoral financing and protecting donor privacy.

Electoral Bonds :

    • The electoral bonds system was introduced in 2017 by way of a Finance bill and it was implemented in 2018.
    • They serve as a means for individuals and entities to make donations to registered political parties while maintaining donor anonymity.
      • State Bank of India 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.
      • Valid for 15 calendar days from the date of issue.
    • Only the political parties registered under Section 29A of the Representation of the People Act, 1951 and have secured not less than 1% of the votes polled in the last general election to the House of the People or the Legislative Assembly, are eligible to receive electoral bonds.

Source: TH

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