The electoral bond scheme notified last year by the Centre will remain anonymous to maintain the privacy of its buyer although the identity can be disclosed before a competent court or upon registration of a criminal case by any law enforcement agency, the National Democratic Alliance government told the Supreme Court on Thursday.
The Centre said this in an affidavit filed before the top court defending electoral bonds. The affidavit was in response to a petition filed by the CPI (M) questioning the law that permits “unlimited and anonymous” corporate funding of elections by way of electoral bonds.
Electoral Bonds were introduced after changes in the Finance Act 2017; there was related amendments in the Income Tax Act, the RBI Act, and the Representation of People Act. Even foreign companies can buy electoral bonds. In its petition, the CPI(M) claimed that the non-disclosure clause would add to the woes of Indian democracy. A bench headed by the then Chief Justice Dipak Misra issued notice to the government in the case in October last year.
The Centre denied allegations that the amendments and subsequent notification seek to create an anonymous and secretive mechanism for increasing the wealth of political parties or bring in unreasonable restriction on the freedom of information regarding identities of the contributors. Electoral bonds have been introduced to enhance accountability, it said.
Keeping the identity of the buyers of bonds anonymous was an extension of their right to vote in secret ballot, the Centre asserted. “It is submitted that the right of the buyer to purchase bonds without having to disclose his preference of political party is in furtherance of his right to privacy,” the affidavit said.
Union finance minister Arun Jaitley announced the electoral bonds as a means of donation to political parties during his budget speech in 2017. The instrument was touted as a means of ensuring more transparency in electoral funding.
The BJP was the biggest beneficiary of the electoral bond scheme in 2017-18, receiving bonds worth ~210 crore of the ~ 215 crore issued. As per the audit and income tax reports submitted by the party to the election commission, it earned ~210 crore through electoral bonds, while the Congress, which earned ~199 crore as income in 2017-18, got only ~5 crore in donations from electoral bonds. When the bonds were announced in 2017, the election commission differed with the Centre’s view that their introduction would make the process transparent. The poll panel, found the mode of donation to political parties opaque.
Several political parties also questioned the efficacy of bonds as a means of ushering in transparency. D Raja of the CPI previously told HT that his party favoured state funding of elections over bonds. To ensure there scheme protects the identity of the purchaser, the government said details of the buyer would not be disclosed to any authority, except when demanded by a competent court or upon registration of criminal case by a law enforcement agency. The bonds can only be credited into the accounts of registered parties; 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 Centre said in its affidavit that since the scheme envisages building a transparent system of acquiring bonds with validated KYC (know your customer details) and an audit trail, the law mandates every political party to file returns before the Election Commission giving out information on how much money has come through electoral bonds.