SC notice to Centre, EC on electoral funding law

The Supreme Court on Tuesday issued a notice to the Union government and the Election Commission on a PIL by Association for Democratic Rights (ADR) challenging recent amendments to the Finance Act 2016 and 2017.

The changes, among others, introduced a system of electoral bonds to be issued by any scheduled bank for the purpose of funding to political parties. A bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud sought a response from the Centre and the poll panel on the plea, which claimed the changes would bring opacity into Indian politics and open the doors “to unlimited political donations”.

The petitioner, represented by advocate Prashant Bhushan, also maintained that the changes in laws on funding of political parties would “legitimise electoral corruption”.

The NGO also challenged the amendments made to the Reserve Bank of India Act, RP Act, the Income Tax Act, the Companies Act and the Foreign Contribution Regulation Act (FCRA) by the Finance Acts of 2016 and 2017.

It claimed the amendments have removed the cap on political donations by companies and legalised anonymous donations with the use of electoral bonds, which are exempted from disclosure to the EC.