India

Supreme Court Explores ‘Selective Anonymity’ in Day 2 of Electoral Bonds Hearing

The Supreme Court of India is currently deliberating the legal validity of electoral bonds, a system introduced in 2018 to enhance transparency in political funding. The government argues that these bonds offer selective anonymity to donors, aiming to protect them from potential victimization if the party they didn’t support wins the election. However, the court has raised concerns about the scheme’s limitations, as purchase records are accessible to investigative agencies through the State Bank of India.

The court pointed out that while the government argues for anonymous donations to prevent a return to black money in political funding, the scheme provides only partial confidentiality and does not offer complete anonymity. There is also the issue of existing laws requiring companies to disclose their overall contributions, even if not specifying the party. This information reflects on the company’s balance sheet, allowing parties to infer the amounts received.

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Chief Justice DY Chandrachud expressed skepticism regarding the government’s argument that abolishing the scheme would lead to a resurgence of cash-based donations. The court, however, acknowledged the intention of reducing cash-based political funding and promoting more accountable contributions.

Nonetheless, the court expressed concerns about the electoral bonds scheme, considering it a “complete information hole” in the process of bringing cleaner money into political funding. The court questioned whether the means adopted by the government are proportional and effective, emphasizing the need to balance donor confidentiality with the greater public interest.

The government’s counter-argument is that anything other than maintaining confidentiality would not address the issue of donor victimization, which might incentivize cash payments. They firmly assert the presence of complete confidentiality.

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Earlier in the proceedings, petitioners challenged the scheme, arguing that it creates an artificial distinction between different forms of donations and infringes upon citizens’ fundamental right to know about the sources of political party funding. They contend that the scheme is designed to redirect black money into political funding via anonymous electoral bonds.

The government’s stance on citizens’ right to information regarding the source of funds is that there is no general right to know “anything and everything” without reasonable restrictions, as argued by Attorney General R Venkataramani.

The electoral bonds scheme, introduced in 2018, was aimed at providing an alternative to cash donations to political parties to increase transparency. These bonds can be purchased by any Indian citizen or domestically-incorporated entity, and only political parties with more than one percent of votes polled in the last Lok Sabha or state election are eligible to receive them. The Supreme Court is actively engaged in scrutinizing the scheme, with various concerns and arguments being presented during the proceedings.

Priyanka Rai

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