What's New :
UPSC Interview Guidance Program. Register here...

Why electoral bonds scheme has been challenged in Supreme Court?

  • Published
    12th Oct, 2023

As per the latest update, Supreme Court has fixed 31 October to hear a bunch of petitions challenging the Centre’s electoral bonds scheme. These pleas question the validity of the electoral bonds scheme as a source of funding for political parties.

  • The electoral bond scheme was introduced in the Finance Bill, 2017.
  • The Centre notified the electoral bond scheme on 2 January 2018 with the aim of enhancing transparency in political funding.

What are electoral bonds?

  • An electoral bond is a bearer instrument like a promissory note that can be purchased by citizens or entities to donate funds to political parties.
  • Such bonds are issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore at select branches of the State Bank of India (SBI).
  • Similar to bank notes, these bonds are payable to the bearer on demand and are interest-free.
  • These bonds are available for purchase for 10-day periods each in the months of January, April, July and October.
  • The Centre can specify an additional period of 30 days in the year of Lok Sabha elections.
  • The political parties can encash such bonds within 15 days of receiving them.

Why the electoral bond scheme has been challenges in Apex Court?

  • Challenges to Electoral Bond Scheme: NGOs and political parties are questioning the scheme's legitimacy, citing unchecked funding and lack of transparency.
  • Amendments and Unlimited Funding: The Centre removed donation limits for companies in the Companies Act, allowing unrestricted political contributions.
    • Also, amendments through Finance Acts in 2016 and 2017 enabled anonymous donations through electoral bonds.
  • Transparency Concerns: Although electoral bonds require bank transfers, the purchaser remains anonymous, obscuring donation sources.
    • Transparency is disputed, with the government insisting that the SBI has access to funding information.
GS Mains Classes GS Classes 2024 GS Classes 2024 UPSC Study Material

Verifying, please be patient.

Our Centers

DELHI (Karol Bagh)

GS SCORE, 1B, Second Floor, Pusa Road, Karol Bagh, New Delhi - 110005 (Beside Karol Bagh Metro Station Gate No. 8)

Get directions on Google Maps

BHUBANESWAR (Jaydev Vihar)

GS SCORE, Plot No.2298, Jaydev Vihar Square, Near HCG Day Care, BBSR - 751013

Get directions on Google Maps

LUCKNOW (Aliganj)

GS SCORE, 2nd Floor, B-33, Sangam Chauraha, Sector H, Aliganj, Lucknow, UP - 226024

Get directions on Google Maps

Enquire Now