00:00 The Supreme Court on Thursday struck down the electoral bond scheme, a mechanism that
00:05 allows anonymous funding to political parties.
00:08 A five-judge Constitution bench headed by Chief Justice D.Y.
00:12 Chandrachud had on November 2 last year reserved its verdict in the matter.
00:16 The Supreme Court has striked down the electoral bond scheme by terming it unconstitutional.
00:22 So what are electoral bonds?
00:25 Electoral bonds are money instruments that act as promissory notes or bearer bonds that
00:29 can be purchased by individuals or companies in India.
00:32 The bonds are issued specifically for the contribution of funds to political parties.
00:36 These bonds are issued by the State Bank of India and are sold in multiples of 1000, 10,000,
00:41 1 lakh, 10 lakh and 1 crore.
00:44 The donations made under this scheme by corporate and even foreign entities enjoy 100% tax exemption.
00:51 The name and other information of the donor are not entered on the instrument and thus
00:56 electoral bonds are said to be anonymous.
00:58 There is no cap on the number of electoral bonds that a person or company can purchase.
01:04 Who can receive funding via electoral bonds?
01:09 Political parties that secured at least 1% of the votes polled in the recent Lok Sabha
01:13 or State Assembly elections and are registered under the RPA can get a verified account from
01:18 the Election Commission of India.
01:20 The bond amounts are deposited in this account within 15 days of their purchase.
01:24 The political party has to encash the amount within those 15 days.
01:28 The amount received as a donation gets deposited into the Prime Minister's relief fund.
01:33 These bonds, however, are not available for purchase all the time.
01:37 They are available for a period of 10 days in a gap of 4 months - January, April, July
01:41 and October.
01:42 They are also open for 30 days in the Lok Sabha election years.
01:48 Why was it challenged in the Supreme Court?
01:51 The electoral bond scheme was first announced by former Finance Minister Arun Jaitley during
01:55 the 2017 budget session.
01:57 Later, it was notified in January 2018 as a source of political funding by way of money
02:02 bills introducing amendments to the Finance Act and the Representation of the People Act.
02:08 In order to implement the scheme, the Centre carried out certain amendments to the Companies
02:11 Act, Income Tax Act, Foreign Contribution Regulation Act, Income Tax Act, Foreign Contribution
02:17 Regulation Act and the Reserve Bank of India Act.
02:20 However, several petitions were filed in the Supreme Court, including those filed by CPIM,
02:25 Congress and some NGOs against the unconstitutional validity of the electoral bonds scheme.
02:31 The hearing into this matter began on October 31 last year.
02:34 Several arguments were made by the petitioners on the scheme including its legality and the
02:38 possible threat it may impose to the country.
02:41 According to the petitioners, the scheme violates the right to information, opens doors to shell
02:46 companies and promotes corruption.
02:48 Rajya Sabha MP and senior advocate Kapil Sehbal had raised that the political party could
02:53 use the donation for any other purposes than election.
02:57 However, the Centre has maintained that the scheme ensures transparency and is a powerful
03:02 check on the use of illicit money in elections.
03:12 [BLANK_AUDIO]
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