Big Update! Supreme Court Declared ‘Electoral Bonds Scheme’ Null & Void! – What is Electoral Bond? – All Details – 10 Key Facts
Table of Contents
Introduction to Electoral Bonds UPSC Current Affairs 2024
Supreme Court Struck Down Electoral Bonds Scheme: Welcome to PreCrack! Recently, on 15th of February 2024, Supreme court has scrapped the Electoral Bonds Scheme. Supreme court found out that the ‘Electoral Bonds Scheme’ is directly violation of Article 19(1) of Indian Constitution. Due to this news, Electoral bonds are making headlines.
Knowing about recent constitutional updates or supreme court important judgments are crucial in the sense for preparing UPSC Examination. If you are also preparing for UPSC exam and wants to know about the Electoral Bonds Scheme in detail, then in this blog we have added all the details about Electoral Bonds Scheme, also we have added a clear understanding of Electoral Bonds Scheme in this blog.
Relatively, we have added the recent update and latest new on Electoral Bonds Scheme and supreme court’s verdict to strike down Electoral Bonds Scheme in this blog.
So, let’s start-
Read Also | What is Model Code of Conduct?
Why Electoral Bonds Scheme is in News? – UPSC Current Affairs
Recently, Supreme court has delivered an judgment on ‘Electoral Bonds Scheme’ & Strike it down by their judgment. The Supreme Court delivered a significant judgment on February 15 in the electoral bonds case, declaring the electoral bonds scheme unconstitutional.
The decision was reached by a constitution bench led by Chief Justice DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra. The unanimous verdict held that the scheme violated the right to information under Article 19(1)(a) of the Constitution.
The court highlighted the importance of transparency in political funding and expressed concerns about the close connection between money and politics leading to potential quid pro quo arrangements. The judgment highlighted that the scheme failed the doctrine of proportionality and other means could achieve the objective of curbing black money.
The court directed the State Bank of India (SBI), the issuer of electoral bonds, to cease issuance and mandated SBI to provide details of electoral bonds purchased and encashed to the Election Commission of India (ECI).
The ECI was further instructed to publish these details on its website.
Additionally, electoral bonds that are still valid but not encashed by political parties were ordered to be returned to purchasers, with SBI refunding the amount. The verdict followed a series of hearings on petitions challenging the electoral bonds scheme, with concerns raised about anonymity, transparency, and the potential for misuse in political financing.
The government’s arguments in favor of promoting legitimate funds and protecting donor anonymity were scrutinized, leading to the court’s decision to strike down the scheme. The judgment has far-reaching implications for electoral funding transparency in India.
What is Electoral Bonds UPSC? – Electoral Bonds Brief Details
Electoral bonds are a financial instrument introduced in India in 2018 to facilitate political donations to political parties. These bonds are like promissory notes that allow individuals and corporations to make contributions to political parties in a relatively anonymous manner.
The main idea is to encourage legitimate and transparent funding for political parties while providing privacy to the donors.
Here’s a brief overview
- Purpose: Electoral bonds were introduced to promote transparency in political funding and encourage donations through proper banking channels.
- Anonymity: Donors can purchase these bonds from authorized banks, and the bonds don’t carry the donor’s name. This feature provides a level of anonymity to the contributors.
- Donor Privacy: The scheme aims to protect the privacy of donors, preventing potential retribution or bias based on their political contributions.
- Validity Period: Electoral bonds have a specific validity period during which they can be used, usually 15 days.
- Authorized Issuer: The State Bank of India (SBI) is the sole authorized bank to issue these bonds.
Understanding of Electoral Bonds in Detail – Simplification
We have added all the details of Electoral bonds below. This is just a more specialized and simplified section for it.
What is an Electoral Bond?
Electoral Bonds are financial instruments introduced in India to facilitate transparent and legitimate political funding. These bonds act as a means for individuals and corporations to make contributions to political parties while ensuring a certain level of privacy for the donors.
Need of Electoral Bonds
The introduction of Electoral Bonds in India was deemed necessary for several reasons:
1. Combating Black Money
- Electoral Bonds were seen as a tool to combat the use of undeclared income (black money) in political funding.
- Anonymity in donations was expected to discourage the flow of illicit funds during elections.
2. Transparency and Accountability
- Advocates argued that Electoral Bonds would enhance transparency by creating a traceable paper trail for political contributions.
- The bonds, with unique serial numbers, were issued by the State Bank of India (SBI), allowing for better tracking.
3. Leveling the Playing Field
- Supporters contended that the introduction of Electoral Bonds would establish a legal and anonymous donation channel, creating a fair environment for various political parties.
- This was anticipated to reduce dependency on large corporate donors and encourage broader support.
4. Protecting Donors
- The anonymity feature was emphasized to shield donors from potential harassment, particularly those supporting opposition parties or holding dissenting views.
- The objective was to encourage wider participation in political funding without fear of reprisal.
5. Boosting Election Expenditure Transparency
- While maintaining donor anonymity, political parties were required to report the value of bonds received and their utilization.
- This compromise aimed to balance anonymity with some transparency in election expenditure.
Features of Electoral Bonds
These are the features of Electoral Bonds –
1. Anonymity
Donors’ identities remain confidential on Electoral Bonds, offering contributors a level of privacy and protection from potential harassment.
2. Validity Period
Each Electoral Bond has a defined period during which it can be utilized for making political contributions.
3. Denominations
Electoral Bonds are available in various denominations, allowing contributors to choose the specific value of the bonds they wish to purchase.
4. Issuer
The exclusive authority responsible for issuing Electoral Bonds is the State Bank of India (SBI).
5. Traceability
Every bond carries a unique serial number, enabling traceability and monitoring by the issuing authority.
6. Accessibility
Eligible individuals and corporations can purchase Electoral Bonds from authorized branches of the State Bank of India.
7. Flexibility for Donors
Electoral Bonds provide a legal and regulated channel for individuals and corporations to contribute funds to political parties.
8. Encashment Process
Political parties can encash Electoral Bonds within the stipulated validity period through the State Bank of India, converting them into usable funds.
9. Limited Disclosure
While there is a paper trail for bonds, specific details about individual donors are not publicly disclosed, ensuring a certain degree of confidentiality.
10. Encouragement of Legal Funding
The primary objective of Electoral Bonds is to encourage legitimate and transparent political funding by directing contributions through regulated banking channels.
Who can issue it? – who is the authority?
The exclusive authority to issue Electoral Bonds is the State Bank of India (SBI). As the designated issuer, SBI plays a crucial role in managing the issuance and distribution of these bonds. It acts as the intermediary, ensuring the regulated and authorized circulation of Electoral Bonds in the context of political contributions in India.
Who is eligible to have Electoral Bonds?
As of today, February 15, 2024, the Electoral Bonds Scheme has been declared unconstitutional by the Supreme Court of India, so the question of eligibility is no longer relevant. However, for historical context and understanding, here’s who were eligible to purchase Electoral Bonds:
Eligible Purchasers
- Indian citizens: Any individual with Indian citizenship could buy Electoral Bonds for themselves or jointly with others.
- Companies incorporated in India: Businesses or organizations registered in India were also eligible to purchase these bonds.
Ineligible Entities
- Foreign individuals or entities: Only Indian citizens and companies were allowed to buy Electoral Bonds.
- Foreign-funded NGOs: Organizations receiving substantial foreign funding weren’t eligible to purchase them.
Specific Restrictions
- Minimum purchase amount: Individuals or companies couldn’t buy bonds for less than ₹1,000.
- No maximum limit (Generally): While there was no upper limit on purchasing, individuals couldn’t contribute more than 7.5% of their profits or 10% of their revenue to political parties, whichever was lower.
Purchasing of Electoral Bonds
We can understand the purchasing of Electoral bonds this way –
1. Authorized Banks
Individuals and corporations can purchase Electoral Bonds from authorized branches of the State Bank of India (SBI).
2. Eligibility
Purchasers must meet the legal requirements and eligibility criteria set by the regulatory framework for political contributions.
3. Denominations
Electoral Bonds are available in various denominations, offering flexibility for contributors to choose the value of bonds they wish to purchase.
4. Transparent Transaction
The purchasing process through authorized banks ensures transparency and adherence to regulatory guidelines for political funding.
5. Legal Framework Compliance
Buyers need to comply with the legal framework governing political contributions to ensure the legitimacy of the transaction.
6. Traceable Serial Numbers
Each Electoral Bond carries a unique serial number, allowing for traceability and monitoring by the issuing authority.
7. Secure Transaction Channel
Purchasing Electoral Bonds through the designated bank provides a secure and regulated channel for contributors.
8. Contributions to Political Parties
The purchased bonds can be used for making legitimate contributions to recognized political parties within the specified framework.
Encashment of Electoral Bonds
We can understand the Encashment of Electoral Bonds this way –
1. Validity Period
Political parties can encash Electoral Bonds within the specified validity period, typically ranging from a few days to weeks.
2. Authorized Channel
Encashment is facilitated through authorized branches of the State Bank of India (SBI), the sole issuing and encashing authority.
3. Conversion into Funds
Bonds, once encashed, are converted into usable funds for political parties, supporting their financial requirements.
4. Reporting Requirements
Political parties are obligated to report the details of encashed bonds, including dates and denominations, ensuring transparency.
5. Regulated Process
The encashment process is regulated, ensuring adherence to legal guidelines and oversight to prevent misuse.
6. Contributions to Parties
Encashed funds contribute to the financial support of political parties, aiding their activities and campaigns.
7. Compliance with Electoral Laws
Political parties need to comply with electoral laws and reporting requirements when utilizing funds obtained through the encashment of Electoral Bonds.
Transparency in Electoral Bonds
Transparency was a central point of contention surrounding the Electoral Bonds Scheme in India. While the initiative aimed to bring some level of transparency through traceable bonds and reporting requirements for political parties, concerns remained about the anonymity offered to donors:
Claimed Transparency
- Paper Trail: Unlike cash donations, Electoral Bonds had unique serial numbers recorded by the State Bank of India (SBI), creating a traceable record of transactions.
- Party Reporting: Political parties receiving bonds had to report the total value received, providing some insight into funding sources.
- Reduced Cash Influence: Replacing cash donations with traceable bonds was seen as a step towards mitigating the use of black money in politics.
Critiques of Transparency
- Donor Anonymity: The core issue was the anonymity afforded to donors, which critics argued undermined true transparency. Without knowing who funded which party, it remained difficult to assess potential influence or conflicts of interest.
- Limited Information: While parties reported total bond value, details like individual donors, their motivations, and potential quid-pro-quo arrangements remained hidden.
- Limited Scrutiny: Public scrutiny of political funding became challenging due to the lack of information about individual donors and their affiliations.
Benefits of Electoral Bonds
These were the few benefits of Electoral Bonds –
1. Combatting Black Money
Electoral Bonds were introduced to curb the use of black money in political funding by providing a traceable and regulated channel for contributions.
2. Enhanced Privacy for Donors
Anonymity in Electoral Bonds aimed to protect donors from potential harassment, encouraging wider participation in political funding.
3. Transparency Measures
Despite donor anonymity, Electoral Bonds required political parties to report the value of bonds received and their utilization, providing a level of transparency in election expenditure.
4. Level Playing Field
The scheme intended to create a level playing field for political parties by offering a legal and anonymous donation channel, potentially reducing dependency on large corporate donors.
5. Legal and Regulated Funding
Electoral Bonds were designed to promote legal and transparent political funding by channeling contributions through regulated banking channels.
6. Encouraging Individual Contributions
By providing an anonymous and legal channel, Electoral Bonds aimed to encourage individual contributions to political parties, diversifying funding sources.
7. Protection from Intimidation
Anonymity in contributions was argued to protect donors, especially those supporting opposition parties or holding dissenting views, from potential intimidation.
8. Paper Trail for Contributions
Electoral Bonds created a paper trail for political contributions, allowing for better monitoring and oversight by regulatory authorities.
Pros and cons of Electoral Bonds – Advantages & Disadvantages of Electoral Bonds
These are/was the pros and cons of Electoral bonds
| Advantages / Pros of Electoral Bonds | Disadvantages / Cons of Electoral Bonds |
| 1. Combatting Black Money: Regulated channel to curb black money use. | 1. Transparency Concerns: Lack of specific donor details raises transparency issues. |
| 2. Enhanced Privacy: Protects donors from harassment. | 2. Inequality in Access: Potential uneven playing field for opposition parties. |
| 3. Transparency Measures: Requires reporting for election expenditure transparency. | 3. Lack of Public Disclosure: Details of donors not publicly disclosed. |
| 4. Legal Funding: Promotes legal and transparent political funding. | 4. Potential for Misuse: Concerns about misuse and fund utilization. |
| 5. Encourages Individual Contributions: Diversifies funding sources. | 5. Constitutional Concerns: Declared unconstitutional by Supreme Court. |
| 6. Protection from Intimidation: Safeguards donors supporting opposition. | 6. Unequal Access to Information: Ruling party may have an advantage in accessing donor information. |
| 7. Paper Trail: Creates a paper trail for political contributions. | 7. Lack of Clarity on Fund Use: Unclear how funds obtained are utilized. |
| 8. Encourages Transparency: Facilitates monitoring and oversight. | 8. Potentially Favoring Ruling Party: Concerns about an imbalanced system. |
| 9. Broadens Support: Aims for broader support with legal and anonymous donations. | 9. Lack of Accountability: Questions raised about the accountability of political parties. |
| 10. Regulated Process: The scheme is designed with regulatory oversight. | 10. Judicial Scrutiny: Recent Supreme Court decision questions transparency and equality. |
Latest news on Electoral Bonds
The Supreme Court of India, in a landmark decision on February 15, 2024 declared the electoral bonds scheme unconstitutional, ruling that anonymous bonds violate the right to information. Chief Justice DY Chandrachud highlighted the importance of transparency in political funding, stating that the scheme infringed upon the right to information under Article 19(1)(a) of the Constitution.
The court directed the State Bank of India (SBI) to cease issuing electoral bonds, ordered details of bond purchases to be submitted to the Election Commission, and mandated disclosure of contributions received by political parties.
The judgment emphasized the need for disclosure in political funding and rejected the government’s argument on the balance between informational privacy and transparency. The court declared amendments to income tax, representation of people, and companies acts as unconstitutional.
The decision was seen as a setback for the ruling Bharatiya Janata Party (BJP), the major beneficiary of the scheme introduced in 2017. The court’s directions aim to enhance accountability and transparency in political funding.
Why Supreme Court declared ‘Electoral Bonds’ Null & Void?
The Supreme Court declared ‘Electoral Bonds’ Null & Void, citing various constitutional violations and key concerns:
For Violations of many provisions of Indian Constitution
- Article 14 Violation: Unequal playing field due to anonymous donations and advantage for large donors.
- Article 19(1)(a) Violation: Hinders freedom of speech and expression, fostering potential repercussions for dissenting voices.
- Article 21 Violation: Indirectly affects personal liberty by allowing unchecked political influence from opaque funding.
- Right to Information Violation: Opaque donations contradict transparency and public scrutiny crucial for a healthy democracy.
- Incompatibility with Representation of the People Act, 1951: Undermines the Act’s spirit of transparency and equality in elections.
A few major Concerns
- Anonymity: Lack of donor information hinders accountability, enabling potential corruption and undue influence.
- Higher Contribution Limits: Creates an unequal advantage for large donors over smaller parties and individual contributors.
- Limited Transparency: Reporting only total bond value received by parties restricts transparency in actual funding sources and expenditures.
Who is Supreme court to declare a scheme null & void?
The Supreme Court of India has the authority to declare a scheme null and void as part of its constitutional role and powers. In India, the Supreme Court is the highest judicial authority and is entrusted with the responsibility of interpreting the Constitution, safeguarding fundamental rights, and ensuring justice. The power of judicial review allows the Supreme Court to examine the constitutionality of laws, government actions, and policies.
When individuals or groups challenge a government scheme or law in court, asserting that it violates constitutional principles, the Supreme Court has the jurisdiction to review those challenges. If the court finds that a scheme or law is inconsistent with the Constitution, it can declare it null and void. This decision is based on the court’s interpretation of constitutional provisions and its commitment to upholding the rule of law.
In the case of electoral bonds, the petitioners argued that the scheme violated the right to information under Article 19(1)(a) of the Constitution. The Supreme Court, after considering the arguments and evidence, declared the electoral bonds scheme unconstitutional, emphasizing its duty to protect constitutional rights and principles.
Concerns that were related to Electoral Bonds
Several concerns were raised regarding the Electoral Bonds scheme in India, leading to legal challenges and ultimately the Supreme Court declaring the scheme unconstitutional. Some of the key concerns related to Electoral Bonds included:
1. Anonymity of Donors
The scheme allowed for anonymous donations to political parties, raising concerns about transparency and accountability in political funding. Critics argued that this could lead to undisclosed and unaccounted contributions, undermining the democratic process.
2. Use of Black Money
There were apprehensions that the scheme might be misused to funnel black money into political financing. Black money, referring to undeclared income that escapes taxation, could be channeled through Electoral Bonds without proper scrutiny, potentially influencing political decisions.
3. Impact on Transparency
The non-disclosure of information regarding contributions to political parties was seen as detrimental to the transparency required for informed voter choices. Critics argued that citizens have a right to know the funding sources of political parties to make informed decisions during elections.
4. Unequal Access to Information
Concerns were raised about the unequal access to donor information, with the ruling party potentially having insight into contributors’ identities, while opposition parties lacked such access. This raised questions about fairness and impartiality in the political process.
5. Shell Companies and Accountability
Opponents contended that the scheme facilitated contributions through shell companies, creating challenges for accountability and integrity in electoral finance. There were fears that this could lead to a lack of scrutiny over the legitimacy of donors and their interests.
6. Potential for Quid Pro Quo Arrangements
The close nexus between money and politics raised concerns about the possibility of quid pro quo arrangements, where financial contributions could influence policy decisions and governance. Critics argued that such arrangements could compromise the democratic process.
7. Selective Anonymity
The scheme’s selective anonymity, where the ruling party might have access to donor information while others did not, was seen as a potential tool for institutionalizing kickbacks and favoritism, undermining the level playing field for political parties.
What is Finance Act 2017 & How Electoral Bonds are related to it
The Finance Act 2017 introduced the Electoral Bonds Scheme as part of larger legislative changes in India. Here’s the simplification:-
Finance Act 2017
- Passed by the Indian Parliament in February 2017.
- Encompassed various fiscal and taxation measures proposed in the Union Budget 2017-18.
- Aimed to promote economic growth, fiscal consolidation, and reforms in various sectors.
Electoral Bonds Scheme
- Introduced within the Finance Act 2017 (specifically through amendments to relevant acts).
- Designed to bring transparency and anonymity to political funding in India.
- Implemented in January 2018 through a separate notification.
How they are related
- The Electoral Bonds Scheme was not a standalone proposal but part of broader financial reforms within the Finance Act 2017.
- The Act included amendments to specific sections of laws like the Reserve Bank of India Act and the Representation of the People Act to facilitate issuing and using Electoral Bonds.
- Though distinct initiatives, the Act and the Scheme shared the objective of improving transparency and addressing concerns about black money in political funding.
How Electoral Bonds are related to Articles 14, 19, and 21
Articles 14, 19, and 21 of the Indian Constitution are often referred to as the “golden triangle” as they represent fundamental rights crucial for a democratic society:
- Article 14: Right to Equality: This guarantees equality before the law and prohibits discrimination based on religion, race, caste, sex, or place of birth.
- Article 19: Right to Freedom: This grants certain fundamental freedoms like freedom of speech, expression, assembly, association, and movement.
- Article 21: Right to Life and Personal Liberty: This guarantees protection of life and personal liberty.
The Electoral Bonds Scheme, now declared unconstitutional by the Supreme Court, raised concerns regarding its compatibility with these articles:
Challenges Related to Article 14:
- Unequal Playing Field: Large donors could exploit anonymity and higher contribution limits, hindering equal opportunities for smaller parties and individuals.
- Discrimination Against Voters: Lack of transparency could hinder informed voting, potentially discriminating against voters who want to know who funds political parties.
Challenges Related to Article 19:
- Violation of Freedom of Speech and Expression: Opaque funding could create an environment where individuals expressing dissent might face repercussions, leading to self-censorship.
- Restrictions on Right to Information: Public scrutiny and accountability are essential for healthy democracy. Anonymity in Electoral Bonds hindered accessing crucial information about political funding.
Challenges Related to Article 21:
- Indirect Impact on Personal Liberty: Unchecked political influence arising from anonymous donations could potentially impinge on individuals’ freedom and decision-making.
- Erosion of Public Trust: Lack of transparency could lead to decreased public trust in institutions and democratic processes, impacting individuals’ sense of security and participation.
Electoral Bonds & Representation of the People Act, 1951
The Electoral Bonds Scheme, while now declared unconstitutional, was originally introduced in 2018 and interacted with the RP Act in the following ways:
Interdependence
- Enabling Provisions: The Electoral Bonds Scheme wasn’t a standalone law but required amendments to specific sections of the RP Act to function.
- Eligibility of Parties: Only registered political parties under Section 29A of the RP Act, and having secured at least 1% of votes in the last election, were eligible to receive Electoral Bonds.
- Financial Reporting: Though anonymous, parties receiving bonds had to report their value under the RP Act’s election expenditure reporting requirements.
Areas of Friction
- Right to Information: The RP Act guarantees transparency in election processes, while the anonymity aspect of Electoral Bonds raised concerns about violating this right.
- Equality of Participation: The RP Act aims to ensure fair elections, but critics argued that Electoral Bonds gave an advantage to large, anonymous donors, creating an unequal playing field.
- Corruption Prevention: Both the RP Act and the Electoral Bonds Scheme aimed to curb corruption, but the lack of transparency in the latter was seen as potentially facilitating undue influence and hidden deals.
Supreme Court Verdict on Electoral Bonds Scheme – Supreme Court Judgment on Electoral Bonds Scheme
Supreme Court of India Case No: WP(C) 724/2017 & Others, Decided on February 15, 2024
Judgment
Held: The Electoral Bonds Scheme, introduced through amendments to the Finance Act, 2017, and relevant election-related legislation, is unconstitutional and void.
Reasoning
- Violates Article 14: Creates an unequal playing field due to anonymous donations and disproportionate advantage for large donors.
- Violates Article 19(1)(a): Hinders freedom of speech and expression by fostering an environment of potential repercussions for dissenting voices.
- Violates Article 21: Indirectly affects personal liberty by allowing unchecked political influence stemming from opaque funding.
- Violates Right to Information: Opaque donations contravene transparency and public scrutiny essential for a healthy democracy.
- Incompatible with Representation of the People Act, 1951: Undermines the Act’s spirit of transparency and equality in elections.
Key Concerns
- Anonymity: Lack of donor information hinders accountability and enables potential corruption and undue influence.
- Higher Contribution Limits: Creates an unequal advantage for large donors over smaller parties and individual contributors.
- Limited transparency: Reporting only total bond value received by parties restricts transparency in actual funding sources and expenditures.
Consequences
- Electoral Bonds Scheme declared null and void, with immediate cessation of issuance and redemption.
- State Bank of India directed to disclose details of bonds already issued (excluding donor information) to the Election Commission.
- Future of political funding reforms remains uncertain, prompting discussions on alternative approaches with enhanced transparency and accountability.
Read the Original Judgment – PDF from Live Law
Key Facts about Electoral Bonds
These are the key facts about Electoral Bonds Scheme:
| Fact | Description |
| Introduction Date | 2018, through Finance Act 2017 amendments |
| Aim | Bring transparency and anonymity to political funding |
| Mechanism | Bearer bonds purchased anonymously, donated to eligible parties |
| Denominations | ₹1,000 to ₹10 million |
| Issuer | State Bank of India |
| Anonymous Donations | Yes |
| Tax Exemption | Yes |
| Secrecy Feature | Anonymity of Donors |
| Legal Challenge | Yes |
| Eligibility | Indian citizens and companies |
| Anonymity | Donors remained anonymous |
| Reporting | Parties reported total bond value received |
| Validity | Declared unconstitutional on Feb 15, 2024 |
| Introduced by | Finance Act 2017 |
| Challenged by | Various Petitioners |
| Concerns Raised | Black Money, Transparency |
| Supreme Court Verdict | Unconstitutional |
| Supreme Court Directives | 1. Stop issuance of electoral bonds. 2. SBI to provide details of bond purchases to ECI. 3. SBI to disclose political parties receiving contributions. 4. Information submission deadline: March 6, 2024. 5. ECI to publish details on its website by March 13, 2024. 6. Unused bonds within 15 days to be returned for refund. |
| Judgment Date | February 15, 2024 |
| Bench Composition | Bench was the composition of the 5 Judges : 1. Chief Justice DY Chandrachud 2. Justice Sanjiv Khanna 3. Justice BR Gavai 4. Justice JB Pardiwala 5. Justice Manoj Misra |
| Lead Judge | Chief Justice DY Chandrachud |
| Concurring Judge | Justice Sanjiv Khanna |
| Impact on General Elections | Significant |
| Information Disclosure | Struck Down |
| Donor Identity Disclosure | Ordered by SC |
| Implementation Halted | Yes |
| Original Judgment | Download PDF of Live Law |
UPSC Questions on Electoral Bonds – Electoral Bonds PYQs – FAQs on Electoral Bonds
Question-1: What was Electoral Bond Scheme?
Answer. The Electoral Bond Scheme was a method of political funding in India where individuals and companies could donate money to political parties anonymously.
Question-2: Why electoral bonds are in the news?
Answer. Electoral bonds are in the news as India’s Supreme Court recently declared the scheme null and void, citing constitutional violations.
Question-3: Why did the Supreme Court strike down the Electoral Bonds Scheme?
Answer. The Supreme Court found the scheme unconstitutional, violating the right to information, and failing the doctrine of proportionality.
Question-4: What are quid pro quo arrangements?
Answer. Quid pro quo arrangements involve the exchange of favors, where political contributions may lead to reciprocal benefits or influence over policymaking.
Question-5: Why did the scheme fail the doctrine of proportionality?
Answer. The scheme failed proportionality by not justifiably balancing the right to information and informational privacy, according to the Supreme Court.
Question-6: What is the golden triangle of the Indian Constitution?
Answer. The golden triangle refers to the interdependence of three key elements: fundamental rights, directive principles of state policy, and parliamentary democracy.
Question-7: Why did the Supreme Court nullify Electoral Bonds?
Answer. The court nullified Electoral Bonds due to constitutional violations, primarily infringing on the right to information under Article 19(1)(a).
Question-8: Why were Electoral Bonds introduced?
Answer. Electoral Bonds were introduced to promote transparency, curb black money in political funding, and provide a legal, anonymous donation channel.
Question-9: Who introduced Electoral Bonds?
Answer. The Electoral Bonds were introduced by the Government of India in 2017.
Question-10: Which bench delivered the judgment on Electoral Bonds?
Answer. A constitution bench comprising Chief Justice DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra delivered the judgment.
Question-11: What were the court’s directives to the State Bank of India?
Answer. The court directed SBI to stop issuing electoral bonds, submit details of purchases to the Election Commission, and disclose information about bonds redeemed by political parties.
Question-12: What led to the Supreme Court declaring electoral bonds unconstitutional?
Answer. The court found the scheme violated the right to information, failed proportionality, and raised concerns about transparency and influence in policymaking.
Question-13: Who challenged the electoral bonds system in court?
Answer. Opposition parties and a civil society group challenged the electoral bonds system in court.
Question-14: How did electoral bonds function as a political funding method?
Answer. Individuals and companies could buy bonds, donate them to political parties, and the parties could exchange them for cash. The bonds, exempt from tax, kept the donor’s name confidential.
Question-15: What percentage of political donations used the electoral bonds scheme?
Answer. Nearly 57 percent of donations between 2018 and March 2022 went through the electoral bonds scheme, with over half of that going to the ruling Bharatiya Janata Party (BJP).
