W.P.(C) 880 of 2017
Introduction of Electoral Bonds Challenged


Status Report

Common Cause and the Association for Democratic Reforms (ADR) have challenged the introduction of the Electoral Bonds, as part of the Finance Act 2017, which have, arguably, made electoral funding of political parties more opaque and legitimised corruption to an unprecedented scale. A PIL filed in the Supreme Court alleges that the bonds make the electoral funding unlimited for big corporates and open the doors for foreign lobbyists.    

The PIL seeks directions from the Supreme Court to strike down the amendments made through Finance Act, 2017 and Finance Act, 2016. It is alleged that such wide-ranging amendments in The Representation of Peoples Act, 1951, The Reserve Bank of India Act, 1934, The Income Tax Act, 1961 and The Companies Act, were brought in illegally as a “Money Bill”, in order to bypass the Rajya Sabha. Hence, it has been urged that suitable directions be given so that the practice of by-passing the Rajya Sabha for important Bills by classifying them as money bills be stopped. This matter is likely to be taken up on October 3, 2017.

The Finance Act, 2017 has introduced a system of electoral bonds to be issued by any scheduled bank for the purpose of electoral funding. The earlier restriction that political donations would not exceed 7.5 per cent of the donating company’s average three-year net profit has been done away with. This may result in even loss-making companies making donations of any amount to political parties out of their capital or reserves. Also, a company is no longer required to disclose the name of the parties to whom such contributions are made.

The Finance Act, 2016 has allowed foreign companies with subsidiaries in India to fund political parties in India, effectively, exposing the Indian politics and democracy to corporate lobbyists who may want to further their agenda. According to the petitioners, these Amendments pose a serious danger to the autonomy of the country and are bound to adversely affect electoral transparency, encourage corrupt practices in politics and make the unholy nexus between politics and corporate houses more opaque and treacherous and is bound to be misused by dubious interest groups and corporate lobbyists. 


W.P.(C) 880 of 2017