India court scraps election bond scheme

INDIA’S Supreme Court struck down yesterday a scheme that permitted anonymous political donations in the form of electoral bonds ahead of national elections in April.

Electoral bonds have become a key method of political funding, allowing donors to give anonymously through certificates purchased from a bank, but transparency rights activists say the practice reduces accountability in the world’s biggest democracy.

Critics condemned the campaign financing method as an opaque way to funnel “black money” to parties, but supporters say it provides better regulation than cash donations, which are still legal.

“The electoral bond scheme infringes upon the right of information of the voter,” the ruling said, read out by Chief Justice D.Y. Chandrachud.

“The information about the funding of political parties is essential for the effective exercise of the choice of voting,” it added.

Under the scheme, individuals or companies could buy electoral bonds at the governmentowned State Bank of India (SBI).

The anonymous and tax-exempt bonds would then be handed to political parties and exchanged for cash. Denominations range from 1,000 rupees ($12) to 10 million rupees ($120,000).

In addition to the concerns about the scheme allowing huge anonymous donations to parties, critics also feared it gave the government the power to access donor details through the state-owned SBI.

The judgment also ruled the SBI must submit details of each bond – including who purchased it – since April 2019 to the Electoral Commission, which must publish those details on its website by March 13.

“The details shall include the date of purchase of each electoral bond, the name of the purchaser of the bond, and the denomination of the electoral bond purchased,” the ruling read.