Here are 10 points about electoral bonds, Supreme Court verdict and its starting date, etc., that may be useful for UPSC, SSC, PSC students:

• Electoral bonds are anonymous banking instruments that allow corporations, firms, and individuals to donate to political parties without disclosing their identity or the amount of donatio

• The electoral bond scheme was introduced by the Central government in 2018 through amendments in the Finance Act 2017, the Income Tax Act 1961, the Representation of the People Act 1951, and the Companies Act 2013.

• The scheme was challenged by three petitioners – Association for Democratic Reforms (ADR), Common Cause, and CPI(M) – on the grounds that it violates the constitutional right to freedom of speech and expression, the right to information, and the principle of free and fair elections.
• The petitioners argued that the scheme reduces transparency in political funding, enables money laundering and corruption, and gives an unfair advantage to the ruling party and its allies, who received more than 90% of the electoral bonds sold till date.
• The Central government defended the scheme, saying that it ensures that only legitimate money is used for political funding through proper banking channels, and that keeping donors’ identity secret protects them from retaliation by political parties.
• The Election Commission of India (ECI) also opposed the scheme, saying that it goes against its recommendation of bringing more transparency and accountability in political finance, and that it hampers its ability to monitor and regulate the flow of funds to political parties.

• The Supreme Court, in a unanimous judgement delivered on February 15, 2024, struck down the electoral bond scheme as unconstitutional, saying that it violates the right to information of the voters, who have a right to know the source and destination of political donations.

• The Supreme Court also held that the amendments made to the Companies Act, which removed the cap on corporate donations and the requirement of disclosing the name of the recipient party, are unconstitutional, as they enable shell companies and foreign entities to influence Indian politics.
• The Supreme Court directed the State Bank of India (SBI), the only authorized seller of electoral bonds, to stop issuing them with immediate effect, and to furnish the details of all the donations made through electoral bonds and the political parties that received them to the ECI within three weeks.
• The Supreme Court further ordered the ECI to publish these details on its website by March 31, 2024, to ensure transparency and public access to the information. The Supreme Court also suggested that the Parliament should enact a comprehensive law on political funding that balances the interests of transparency and anonymity.