Electoral Bonds: SC directs all parties to reveal political funding details to EC

Written by Sabrang Staff | Published on: April 12, 2019

The apex court ordered the parties to furnish receipts of electoral bonds to the poll body, providing information on the identity of donors and the amount in the account of donors. It could be a major setback for BJP as it had shown a receipt of Rs. 210 crore through electoral bonds (which is exactly 95% of the total amount redeemed by political parties.)


Political Funding
 
New Delhi: The Supreme Court on Friday refused any interim stay on the electoral bond scheme and directed all parties to submit details of political funding received so far to the Election Commission in "sealed covers" by May 30.
 
A bench headed by Chief Justice of India Justice Ranjan Gogoi and comprising Justices Deepak Gupta and Sanjiv Khanna, ordered the parties to furnish receipts of electoral bonds to the poll body, providing information on the identity of donors and the amount in the account of donors.
 
The apex court observed that "rival contentions" by the petitioners and respondents "raise weighty issues which have a tremendous bearing on the electoral process" and that the matter will require a detailed hearing. It posted the matter for hearing on an "appropriate date".
 
Besides this, the court also directed the Finance Ministry to reduce the window of purchasing electoral bonds from 10 days to five days in April-May.
 
The top court was hearing pleas by the CPI(M) and the NGO Association of Democratic Reforms (ADR) challenging the scheme. Appearing for petitioner ADR, advocate Prashant Bhushan had earlier said that according to Election Commission figures, bonds worth Rs. 210 crore of the total Rs. 221 crore purchased had gone to the BJP.
 
However, objecting to it, Attorney General K K Venugopal said Bhushan was making an election speech. Responding to queries from apex court earlier, he had said “transparency cannot be the mantra” and “my opinion is voters have the right to know about their candidates… why should they know where the money of political parties is coming from”.
 
The BJP-led NDA government had announced electoral bonds in the earlier budget, claiming that the scheme would clean up political funding. Finance Minister Arun Jaitley had also defended the use of electoral bonds, saying that if the donors are asked to disclose names of political parties to whom they give money, it would result in return to the earlier system of usage of cash and black money in political funding.
 
The government had brought in the electoral bond scheme as an alternative to cash donations made to political parties as part of its efforts to bring transparency in political funding. Under the scheme, the name of the donor is known only to banks.
 
BJP received Rs. 997 crore and Rs. 990 crore through donations in 2016-17 and 2017-18 respectively, five times more than what Congress received in the same period, the Election Commission told the Supreme Court on Thursday.
 
Appearing for the EC, senior advocate Rakesh Dwivedi gave the information to a bench of Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna while hearing a petition by Association for Democratic Reforms which sought transparency in anonymous donations through electoral bonds, alleging that at present they encouraged corruption and generated black money.
 
“BJP has shown a receipt of Rs. 210 crore through electoral bonds (which is exactly 95% of the total amount redeemed by political parties),” the EC said. This means all other parties put together received a paltry Rs. 11 crore as donation through electoral bonds as compared to Rs. 210 crore by BJP during 2017-18,” Dwivedi said.
 
The EC, however, added, “A large portion of the funding of political parties in earlier years (90% in 2015-16 and 62% in 2016-17) was in cash donations of less than Rs. 20,000. If a part of the cash donations is now received through electoral bonds, it would mean that clean, tax-paid money is being used for political funding.”
 
Total donations received by BJP in 2016-17 was Rs. 997 crore. Of the total, the party declared Rs. 529 crore before the EC which showed that it received Rs. 468 crore in cash donations, each below Rs. 20,000, from anonymous persons. In the same period, Congress received Rs. 180 crore in donations of which Rs. 138 crore was through small donations from anonymous persons.
 
In 2017-18, BJP received Rs. 990 crore in donations of which Rs. 342 crore was through small cash donations by anonymous persons and Rs. 210 crore by way of electoral bonds. Congress, in the same period, received Rs. 168 crore of which Rs. 141.50 crore was through small donations from anonymous persons and Rs. 5 crore through electoral bonds.
 
What is the Electoral Bonds Scheme?
Anyone can buy an electoral bond at the government-owned State Bank of India in denominations ranging from 1,000 rupees to 10 million rupees ($14 to $140,000). Afterwards, they are delivered to a political party, which can exchange them for cash. They don’t carry the name of the donor and are exempt from tax.
 
They are available for a period of 10 days each in the months of January, April, July and October, with an additional period of 30 days specified by the central government in the year of general elections.
 
The bonds can be purchased only after making payment through KYC-compliant account. They can be encashed by an eligible political party only through a designated bank account with the authorised bank.
 
An electoral bond is valid for 15 days from the date of issue. No payment would be made to any payee political party if the bond is deposited after the expiry of the validity period. The bond deposited by any eligible political party into its account would be credited on the same day.
 
SBI is the only authorised bank to issue such bonds.
 
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