india

Updated: Apr 11, 2019 22:51 IST

The government said it is not necessary for voters to know the identity of contributors to political parties and seemed to suggest that such transparency in election funding was impractical.

The government’s statement came during a hearing on electoral bonds in the Supreme Court.

Appearing for the Centre, Attorney general KK Venugopal said donors would be victimised if their details are made public and added that this was against the right to privacy asserted by the nine-judge bench judgment in the Puttuswamy case.

His central argument was that the main purpose of electoral bonds was to curb the use of black money in elections. A bench led by Chief Justice Ranjan Gogoi concluded the hearing and reserved its order on an interim plea to stop the use of electoral bonds to fund political parties. It will pronounce its order on Friday morning. The top court is hearing pleas by the CPI(M) and NGO, Association of Democratic Reforms (ADR) challenging the scheme. “Transparency cannot be the mantra. It will have to take into account the realities of the day..,” Venugopal told the bench, which also comprised justices Deepak Gupta and Sanjiv Khanna.

Earlier, the AG argued that in the absence of state funding of elections, private contributions were the only source for political funding. To the petitioners’ contention that the scheme went against the voters’ right to know, the AG said: “In my opinion, voters have the right to know about their candidates. Why should they know where the money of political parties is coming from?”

Justice Gupta reminded Venugopal that the concern raised by petitioners was about the system promoting opacity and asked “Shouldn’t the voters know which party is funded by whom?” He added that this is “ an important part of the voters’ right to know”. Venugopal quoted the Puttuswamy judgment to insist donors have the right to privacy. He was also not very clear on whether the banks selling the bonds would know the identity of the purchaser. The CJI then said: “If the identity of the purchaser is not known, it will have wider ramifications. Your entire exercise of doing away with black money is negative”

Venugopal then responded that banks would definitely know the donor’s identity because the purchasers would have to fulfil the Know Your Customer requirement mandated for all financial transactions. He said people can buy bonds only with their money and from their accounts. The Election Commission informed the bench that it has received information from political parties on how much donations they have received in the form of bonds and handed over details to the court.

Electoral bonds were introduced after changes in the Finance Act 2017; there were related amendments in the Income Tax Act, the Reserve Bank of India Act, and the Representation of People Act. Even foreign companies can buy electoral bonds. In its petition, the CPI(M) claimed that the non-disclosure clause would add to the woes of Indian democracy. A bench headed by the then Chief Justice Dipak Misra issued a notice to the government in the case in October last year. The Bharatiya Janata Party (BJP) was the biggest beneficiary of the electoral bond scheme in 2017-18, receiving bonds worth around ₹210 crore of the ₹215 crore issued. As per the audit and income tax reports submitted by the party to the ECI, it earned ₹210 crore through electoral bonds, while the Congress, which earned ₹199 crore as income in 2017-18, got only ₹5 crore in donations from electoral bonds. When the bonds were announced in 2017, the ECI differed with the Centre’s view that their introduction would make the process transparent.

In March, the Election Commission expressed concern at legislative changes that allowed the use of electoral bonds for anonymous funding of elections, warning this would have “serious repercussions” on the transparency of the electoral process.

It also said changes in the Foreign Contribution Regulation Act, 2010, could “allow unchecked foreign funding of political parties”, raising the spectre of foreign influence on India’s politics and policies.