The Supreme Court of India is set to deliver its verdict on Thursday regarding the legal validity of the electoral bonds scheme, a mechanism allowing anonymous donations to political parties. The anticipation surrounding this verdict stems from the profound implications it holds for the transparency and integrity of India's electoral process.

The case, which has been under the scrutiny of a five-judge Constitution bench comprising Chief Justice DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, reached its pinnacle on November 2, 2023, when the bench reserved its judgment following a three-day hearing. Central to the court's deliberations was the examination of data provided by the Election Commission of India, detailing electoral bonds sold under the scheme up to September 30, 2023.

At the root of the electoral bonds scheme lies the concept of anonymity, allowing donors to contribute funds to political parties without disclosing their identity. These bonds, akin to promissory notes or bearer bonds, are obtainable by individuals, companies, firms, or associations, provided they are citizens of India or incorporated within the country. The scheme, introduced via the Finance Act of 2017, amended several key statutes, including the RBI Act, Income Tax Act, and Representation of People Act, facilitating the issuance and utilization of electoral bonds for political funding.

However, the scheme has not been without controversy. Since its inception, it has faced legal challenges questioning its compatibility with democratic principles and electoral integrity. Various petitions filed before the Supreme Court have raised concerns about the potential for unchecked and unlimited funding of political parties, as well as the constitutional validity of passing the Finance Act of 2017 as a money bill, thereby circumventing the Rajya Sabha.

Amidst these legal battles, the Central government has staunchly defended the electoral bonds scheme, asserting its transparency and efficacy in promoting legitimate political funding. Despite earlier attempts to challenge the scheme, including a 2021 application seeking a stay, the Supreme Court has persisted in its examination, recognizing the significance of addressing these fundamental issues within the framework of Indian democracy.

Case: Association for Democratic Reforms and Anr vs Union of India Cabinet Secretary and ors.