Crime & Justice

India’s top court cancels discreet political donations that hide donor’s identity

New Delhi, Feb 15 (EFE) – India’s top court invalidated a political funding scheme on Thursday that allowed donors to fund political parties, widely believed to have favored the ruling party of Prime Minister Narendra Modi.

A five-judge constitution bench, led by Chief Justice DY Chandrachud, unanimously struck down the scheme, deeming it “unconstitutional” to permit anonymous financial contributions to political parties.

The court criticized the scheme for allowing “unlimited corporate funding to political parties,” labeling it “arbitrary and violative” of the Indian constitution.

“(The) ability of a company to influence the election process through political contribution is much higher when compared to that of an individual,” the court asserted, highlighting the disproportionate influence of corporate contributions on the political process.

The court argued that company donations could constitute “purely business transactions made with the intent of securing benefits in return.”

The top court had last year heard a bunch of petitions challenging the so-called electoral bonds scheme introduced by the Modi government in 2018. The final verdict was reserved until announced on Thursday.

The arrangement allowed individuals and companies to donate these electoral bonds — issued by India’s largest government-run State Bank of India in multiple denominations ranging from 1,000 Indian rupees ($12) to 10 million rupees ($120,000).

Donors would buy these bonds and fund political parties of their choice.

Before 2018, political parties were required to disclose the identity of donors contributing more than 20,000 Indian rupees.

The contentious scheme allowed them to reveal the amount received in electoral bonds but not the identity of the bond’s purchaser.

According to the Association for Democratic Reforms, an independent election watchdog, Indian political parties received over 165 billion rupees in election funding from March 2018 to January this year.

The ruling Bharatiya Janata Party (BJP) received 66 billion rupees, or 55 percent of the total, from electoral bonds worth over 121 billion Indian rupees sold until 2023.

The opposition Indian National Congress received less than ten percent of the total funds in the five years, around 11 billion rupees, as per audited reports cited by the watchdog.

The BJP has staunchly defended the electoral bond system, arguing that it eliminates the possibility of funneling unaccounted cash into India’s political system.

However, rights groups have often noted that the alleged nexus between politics and business poses a significant challenge to democracy.

Critics of the electoral bond system criticize its lack of transparency, arguing that it promotes opacity and legitimizes illegal money in the electoral process.

In its ruling, the court directed the bank to “submit details of the electoral bonds…to the Election Commission of India (ECI)” within the next three weeks.

The court’s verdict was announced several months before India’s national election, scheduled to take place later this year. EFE

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