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A five judge bench headed by Chief Justice DY Chandrachud reserved the challenge to the scheme for judgment

CHENNAI: This month, the Supreme Court gave the Election Commission of India (ECI) two weeks to produce updated data, till September 30, 2023, on contributions received by political parties through the electoral bonds scheme. A five judge bench headed by Chief Justice DY Chandrachud reserved the challenge to the scheme for judgment, and remarked that the ultimate aim of devising a scheme to sanitise the process of political donations is to bring down the infusion of unaccounted for cash elements in the electoral system, encourage use of authorised banking channels, and bring in transparency.

Chandrachud reiterated that the purpose of businesses is to carry out business, and not to donate to political parties. The CJI warned about the dangers of legitimising kickbacks and quid pro quo between power centres and people who are benefactors of that power. Solicitor General Tushar Mehta, appearing on behalf of the Centre said confidentiality of the identity of donors and their contribution was key to the scheme. Striking it down could risk returning India to the time when black money was made legit through political donations made in unaccounted cash.

The five judge Constitution Bench that sat to hear the pleas challenging the validity of the electoral bonds scheme raised concerns on the potential for influential entities to purchase electoral bonds through verified accounts of other people. The petitioners surmise that unlimited and anonymous funding directed to political parties legitimises corruption. Data published over the past few years by the Association of Democratic Reforms, which is one of the petitioners puts this in context.

Its annual reports show that the share of unknown sources of income has only surged in the aftermath of the introduction of electoral bonds, which is exactly the opposite of what the scheme was conceived for. The Group has bifurcated the income of political parties into two categories: known and unknown. The former is further divided into subtypes, one of them being voluntary contributions over Rs 20,000 with donor details provided to the ECI; and other sources of income.

The unknown sources of income comprises voluntary donations under the Rs 20,000 slab, money gained through electoral bonds, sale of coupons and other means where the donor remains anonymous to the public. With regard to national parties, their share of income from unknown sources rose from 66% in FY2015-2017 to 72% in FY2019-2022. The BJP saw a spike in its share of unknown income – from 58% to 68%, while the Congress’ share remained in the 80% range. Electoral bonds’ contribution formed 58% of the national parties’ total incomes in the FY2019-2022 span. Tellingly, these bonds, as a percentage of the national parties’ total income from unknown sources, was a staggering 81%.

Clearly, introduction of bonds precipitated the rise in unknown share of income. The BJP bagged the maximum income from electoral bonds. Between 2018-2022, it earned Rs 5,271 crore via electoral bonds, essentially over 57% of income earned by all parties through the scheme. The runner-up was the Congress at 10.4%. Interestingly, the Opposition party has now planned on deploying a crowd-funding platform to beef up its resources, which could entail an electronic trail and greater transparency in political funding. Needless to say, the electorate has a right to know where the breadcrumbs lead.

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