Centre opposes EC's stand in SC on electoral bonds, says poll panel's concerns lack merit

The Centre on Wednesday filed an affidavit in the Supreme Court (SC) opposing the Election Commission's stand on electoral bonds, stressing that the issuing of electoral bonds was “a pioneer step” aimed at bringing major poll reforms and “ensuring transparency” and “accountability” in funding for political parties.

In its new affidavit, the Centre said that earlier individuals or corporates were making huge cash donations to political parties using “illicit means of funding”. The affidavit added that unaccounted black money was also used in electoral process.

The Centre opposed the EC's stand just a day after the poll panel filed an affidavit before the apex court expressing concerns over the issuing of electoral bonds, saying the changes implemented by the central government in several laws will affect the 'transparency' of the electoral process.

On Wednesday, an SC bench headed by Chief Justice Ranjan Gogoi said that it will hear the petitions challenging the validity of the Centre’s decision on April 5.

The SC bench told advocate Prashant Bhushan, who represented Association for Democratic Reforms (ADR), that an appropriate bench will hear the matter on April 5.

In its plea, ADR has sought a stay on the Electoral Bond Scheme, 2018, which was notified by the Centre in January last year. The NGO has said that changes introduced in the relevant Acts have "opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies, which can have serious repercussions on the Indian democracy".

The Centre has said in its fresh affidavit that the electoral bonds “attempt at bringing greater transparency, ensuring KYC compliance and keeping an audit trail in comparison to the earlier opaque system of cash donations."

“Accordingly, the concern of the Election Commission of India that electoral bonds will enable foreign companies to influence Indian policies is without any legal or factual merit,” it said. 

The government added that there was unregulated flow of black money under the old system and “the unaccounted-for monies received by political parties were also spent without being accounted for, thus creating/enabling a parallel economy, as it were, through the use of unaccounted for cash”.

“It is submitted that contrary to the concerns raised by the Election Commission of India, the amendments in the respective legislatures have been made and the Electoral Bond Scheme has been introduced, as a pioneer step in bringing electoral reforms, to ensure that the spirit of transparency and accountability in political funding is maintained,” it said.

Further justifying the issuing of electoral bond, the government said, “Under the present system, electoral bonds can be issued only by an authorized bank, being the State Bank of India. All payments made for the issuance of the electoral bonds are accepted only by means of a demand draft, cheque or through the Electronic Clearing System or direct debit to the buyers’ account. No Black money can, therefore, be used for the purchase of these bonds,” it said.

The government said the new system makes it mandatory for the political party to disclose the receipt of money through electoral bonds. The Centre's affidavit also added that under the new system political party have to account for the receipt of money too.

 “The Electoral Bonds is a positive step in the right direction to ensure accountability and transparency in conducting elections. The need to bring about such a change was felt as the measures that existed on the book were either not enough or were proving to be ineffective/insufficient in dealing with the menace of corruption in Elections,” it said. 

It may be recalled that the electoral bonds were announced by the BJP-led government at the Centre in the earlier budget despite stiff resistance by opposition parties.