The Supreme Court has ruled the electoral bond scheme, introduced by the BJP government in 2018, as unconstitutional. This scheme permitted large anonymous corporate contributions to political parties. As a result of the ruling, the State Bank of India has been directed to cease issuing bonds immediately. Additionally, the bank must provide updated details of such contributions from April 2019, which will be published on the Election Commission's website by March 13th.
The Supreme Court bench, comprising CJI D Y Chandrachud and Justices Sanjiv Khanna, B R Gavai, J B Pardiwala, and Manoj Misra, unanimously rejected the central rationale of the electoral bond scheme. They ruled that the need to protect donors' identities did not outweigh voters' right to information about significant political donations. The bench held that secret corporate funding could compromise the integrity of elections, disrupt political equality, and undermine democracy. Additionally, they deemed the amendments aimed at ensuring anonymity and non-disclosure arbitrary.
Though unanimous in their rejection of the bond scheme, the bench put across its stand through two separate but concurring verdicts - one written by the CJI and the other by Justice Khanna.
The Supreme Court's order does not impact the existing allowance for anonymous donations to political parties up to Rs 20,000 by individuals or companies. However, unlimited anonymous contributions by companies are no longer permitted. The court reinstated the 2013 cap of 7.5% of the average net profit of a company in the last three years on corporate donations, which was previously 5% from 1985 to 2013. Contributions made through cheques, drafts, and bank transfers by corporate entities, duly reflected in the party's statement to the Election Commission, remain unaffected by the ruling.