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Under the scheme, an individual or company could buy these bonds from the SBI in denominations ranging from 1,000 rupees to 10 million rupees and donate them to a political party of their choice.
The bonds – which were first sold in early 2018 – were then delivered to the party, which can exchange them for cash. The bonds, which were exempt from tax, did not bear the name of the donor. Cash donations are still permitted in elections, but are not tax-exempt.
Information about the funding of a political party is essential for voters to be able to exercise their right to vote effectively. The electoral bond scheme and the challenged provisions violate Article 19(1)(a) in that they infringe the voter's right to information by anonymising donations through electoral bonds,” the court added.
Since their introduction, electoral bonds had become an important method of political funding. Although donors were technically anonymous, citizens feared that the government could access the data through the state SBI.
Because of the close connection between money and politics, it was possible for financial contributions to “ lead to quid pro quo arrangements”, the court said as it reinstated the caps on corporate donations, declaring that it was "manifestly arbitrary" to treat corporations and individuals equally in this regard.
The ability of a corporation to influence the electoral process through political contributions is much greater than that of an individual … Corporate contributions are purely business transactions made with the intention of securing benefits in return,” the supreme court’s decision states.
The court's judgement, which reinstates caps on corporate donations and emphasises transparency in political funding, is a watershed moment in Indian democracy. By recognising the right of voters to essential information, the court reaffirms the basic principles of democracy and electoral integrity.
The challenge to the poll bond system was brought by various stakeholders, including the Association for Democratic Reforms, political parties and concerned citizens. Their arguments, based on precedents emphasising the voters' right to information, were well received by the court and resulted in a clear rejection of the government's defence.
To further continue reading https://www.pixstory.com/story/milestone-judgement-on-electoral-bonds-part-31709720994/301548