India’s Supreme Court scraps electoral bonds, calls them ‘unconstitutional’

Election funding system was challenged by the opposition and activists on grounds that it hindered people’s right to know who gives money to parties.

India’s Supreme Court has scrapped a seven-year-old election funding system, called “electoral bonds”, that allows individuals and companies to donate money to political parties anonymously and without any limits.

Coming nearly two months before the general election, Thursday’s decision is being seen as a setback for Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP), which has been the largest beneficiary of the system it introduced in 2017.

The secretive election funding system was challenged by the opposition parties and a civil society group on the grounds that it hindered the public’s right to know who had given money to political parties.

A five-judge top court bench headed by Chief Justice DY Chandrachud on Thursday said the system is “unconstitutional” and directed the state-run State Bank of India (SBI) to not issue any more of these bonds, to furnish identity details of those who bought them, and to provide information about bonds redeemed by each political party.

“Political contributions give a seat at the table to the contributor … this access also translates into influence over policy-making,” Chandrachud said.