Electoral Bonds: Scheme introduced in spirit of transparency and accountability, Centre tells Supreme Court

In the case pertaining to the validity of the electoral bonds scheme, the Centre has opposed the concerns of the Election Commission (EC) over the impact of the scheme on the transparency of political funding..While the EC had communicated its concerns over the “serious repercussions” the scheme of electoral bonds would have on the transparency of political funding, the Union Ministry of Finance, in its affidavit, has stated that the scheme was introduced “in the spirit of transparency”..“[C]ontrary 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.” .The Ministry of Finance, in its affidavit, has stated that the scheme would curb and curtail the inflow of black money into the system, considering the fact that electoral bonds will have to be purchased through the authorised banker, the State Bank of India..While the personal details of the purchaser of the electoral bond will not be disclosed for privacy purposes, the bank will have authentic details of the purchaser in conformity with the Reserve Bank of India’s KYC norms..Further building a case for the scheme as a way to bring transparency in the political funding sphere, the Centre has called it a “marked shift” from the old system which “suffered from many lacunae”. It has hinted at the large number of donations made in cash which effectively shielded the identity of the donor as well as the recipient party. The parties also sought tax exemptions under the Income Tax Act, 1961, and at times, political parties were floated merely for the purpose of being used as “vehicles for generating /handling large amounts of tainted cash”, the Centre avers..The Centre has also termed the EC’s concerns over Indian policies being influenced by foreign companies as lacking “legal or factual merit”..“[T]he 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.” .As regards the protection of the identity of the purchaser of the bond, the rationale given by the Centre is to protect the purchaser from political victimization. The affidavit further states that the details are to be furnished before competent courts when asked for the same..The Centre has also stressed on the scheme’s aim to bring down cash transactions in political funding and has stated that the cap imposed on cash donations stands reduced from Rs 20,000 to Rs 2,000. Any amount of donation to be made beyond this cap will have to take the electoral bonds route..The Supreme Court is scheduled to hear the petition filed by Association of Democratic Reforms challenging the validity of this scheme on Friday, April 5..Read the affidavit: