The Supreme Court will hear in January a plea seeking a stay on the electoral bond scheme meant for collection of funds by political parties to contest polls. Activist lawyer Prashant Bhushan on Wednesday told a Bench led by Chief Justice SA Bobde that around `6,000 crore had been collected so far under the scheme, which is being "misused by the party in power." The scheme has been red-flagged by the banking regulator, RBI, and also the Election Commission of India, he added.
The apex court had earlier in April asked political parties to give details of donors who donated through electoral bonds, amounts received from them, details of payment received on each bond, etc to the poll panel. The government had then opposed the plea, stating that the scheme was "a pioneering step" to bring poll reforms ensuring transparency and accountability in the political funding.
Bhushan, appearing for the Association for Democratic Reforms, an NGO, sought a stay on the scheme on the grounds that it had become akin for accepting bribe, money laundering and channelisation of black money.
It said the use of electoral bonds for political donations was a cause for concern because these bonds were in the nature of bearer bonds and the identity of the donor is kept anonymous. "Political parties are not required to disclose the name of the person/entity donating to a party through electoral bonds. Since the bonds are bearer instruments and have to be physically given to the political parties for them to encash, parties will know who is donating to them. "It is only the general citizens who will not know who is donating to which party. Thus, electoral bonds increase the anonymity of political donations," according to the plea.
The government had notified the Electoral Bond Scheme on January 2, 2018. As per its provisions, electoral bonds may be purchased by a person, who is a citizen of India or incorporated or established in India.
The ADR has said in its plea that certain amendments made to the Finance Act, 2017 and the earlier Finance Act, 2016, both of which were passed as money Bills, have opened doors to unlimited political donations even from foreign companies. "The Finance Act of 2017 had introduced the use of electoral bonds which is exempt from disclosure under the Representation of Peoples Act, 1951, opening doors to unchecked, unknown funding to political parties."
The NGO said such amendments have legitimised electoral corruption at a huge scale, while ensuring complete non-transparency in political funding. "The said amendments have also removed the existing cap of 7.5% of net profit in the last three years on campaign donations by companies and have legalised anonymous donations," the lawyer said in the application.
In its plea, the ADR said amendments carried out to relevant Acts have "opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies which can have serious repercussions on the Indian democracy."
It said even loss-making companies now qualify to make donations of any amount to political parties out of their capital or reserves.
"Further, it opens up the possibility of companies being brought into existence by unscrupulous elements primarily for routing funds to political parties through anonymous and opaque instruments like electoral bonds.
"This has increased the opacity of funding of political parties, and the danger of quid pro quo and if any benefits are passed on to such companies or their group companies by the elected government," it said.