The Supreme Court’s landmark judgment scrapping electoral bonds could have a serious impact on the funding of political parties on the eve of elections. The court ordered the bond issuer State Bank of India (SBI) to submit details of political parties receiving electoral bonds to the Election Commission of India (EC) by March 6. This information should be published on the official EC site by March 13 and after that the bond amount should be returned to the buyers. In short the entire amount has to be returned.
The Court held the electoral bond to be a violation of the fundamental rights guaranteed under Article 19(1)(a) of freedom of expression as well as the right to information due to its anonymous nature. The petitioner was Association for Democratic Reforms. According to the Election Commission’s review of audited party accounts, BJP has earned 54 percent from electoral bonds.
It may have more impact on those small parties which depend on a little money, including Congress. Big parties do not survive with only one source. He has several funds to access and manage his affairs, which also includes the management of members of various legislatures. The Supreme Court, while striking it down, also said that the introduction of bonds through a money bill was not valid. This limits the powers of the Rajya Sabha to discuss.
Electoral bonds were introduced by the Finance Act 2017 declaring that they can be issued by any scheduled bank for the purpose of election funding. The petitions filed before the Supreme Court challenged five amendments to various laws through the Finance Act 2017. The major amendments were in the RBI Act, Income Tax Act and Representation of the People Act.
The Supreme Court has said that the bonds have opened the doors to unlimited, uncontrolled funding for political parties. The bonds which were repeatedly alleged favor the ruling party more and most of the money is put into the coffers of the ruling party. A review of the audit accounts of the BJP shows that in 2020-21, Rs 1294.14 i.e. 54 percent of its total income came from electoral bonds. It increased to Rs 1917 crore in 2021-22 and Rs 2361 crore in 2022-23, totaling Rs 5572.14 crore.
BJP’s election expenditure included, among other things, Rs 432.14 crore spent on advertisements and Rs 78.22 crore spent on hiring planes and helicopters. Rs 75.05 crore were given to the candidates as financial assistance, while the cost of the press conference was Rs 71.60 lakh.
The party received ₹2,120.06 crore from donations (including electoral bonds), while income from bank interest was ₹237.3 crore, compared to ₹133.3 crore in the previous financial year. The party spent ₹1,092.15 crore in the elections, which is five times more than the Congress’s expenditure. BJP had spent ₹645.85 crore in 2021-22.
On the other hand, the total receipts of Congress declined to Rs 541.27 crore in 2021-22. It spent Rs 192.55 crore on elections and Rahul Gandhi’s Kanyakumari to Kashmir in 2022-23 "India Jodo Yatra" spent Rs 71.83 crore, while its donations through electoral bonds declined to Rs 171.02 crore from Rs 236.09 crore last year.
Congress had raised questions over BJP receiving three times more funds than all other parties. Akhilesh Yadav-led Samajwadi Party earned ₹3.2 crore through electoral bonds in 2021-22. In 2022-23, the recognized state party will not receive any contribution from these bonds.
Telugu Desam Party, also a recognized state party, earned ₹34 crore through electoral bonds in 2022-23, 10 times more than the amount received in the previous financial year.
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