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Centre Allowed Electoral Bonds Sale for 15 More Days Despite Official Objection: ADR

The Electoral Bond Scheme was amended to ensure more donations can be made in a completely opaque manner before the elections, the election watchdog said in a Supreme Court affidavit.
SC to Hear Pleas Challenging Electoral Bond Scheme on December 6

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The Union finance ministry allowed the sale of controversial electoral bonds (EBs) for 15 more days by amending the Electoral Bonds Scheme after overruling objections of certain ministry officials and the law and justice ministry.

In a supplementary affidavit filed in the Supreme Court (SC), NGO Association for Democratic Reforms (ADR) has contended that the amendment is intended to “ensure that more and more donations can be made in a completely opaque manner before state elections”, LiveLaw reported.

The Scheme was amended on November 7 to allow an additional period of 15 days for the sale of EBs ahead of the Gujarat and Himachal Pradesh Assembly elections. Two days before the amendment, the 23rd tranche of EBs was sold for subscription between November 9-15.

On December 3, the sale of the 24th tranche was notified from Monday onwards during the second phase of voting for the Gujarat elections will be held till December 12, PTI reported.

The Scheme was amended and the sale of the 24th tranche was allowed despite the SC scheduled to hear five petitions challenging the Scheme on Tuesday. Besides ADR, Common Cause and CPI (Marxist) have challenged the Scheme questioning if it facilitates unaccounted anonymous political donations.

Officials in the finance and law and justice ministries and the department of economic affairs had warned senior officials of the finance ministry against amending the Scheme since the matter is sub judice in the SC and the Model Code of Conduct (MCC) is in force, the ADR said relying on documents obtained by transparency activist Commodore (Retd.) Lokesh Batra under the RTI Act.

The Centre amended the scheme despite the suggestion to obtain a legal opinion from the law and justice ministry and obtain the Election Commission of India’s (ECI) clearance.

In response to the objections of the officials, solicitor general of India Tushar Mehta said that there is no prohibition on amending the Scheme and allowing an additional window of 15 days similar to the extra 30 days allowed in the year of Lok Sabha elections.

While the economic affairs secretary in his response regarding obtaining the ECI’s clearance, according to the affidavit, said that a similar amendment was proposed in March 2021 which was noted by the ECI and therefore another reference was not required.

“The concurrence of ECI for the amendment or for the issuance from the MCC perspective is not needed. However, the ECI may be informed about the proposed issuance,” senior finance ministry officials said overruling the reservations.

Alleging “an absolute abuse of power by the party [the BJP] in power, the ADR submitted: “The fact that the ministry of finance did not consider it necessary to take prior approval of the Election Commission before bringing an amendment to the Electoral Bonds Scheme, 2018, amounts to an absolute abuse of power by the party in power and indicates suspicion towards the intent behind the amendment as well as government’s averseness towards the idea of participatory democracy.”

The ministry, according to the affidavit, had “deliberately tried to withhold the information regarding the amendment to the Electoral Bonds Scheme from the Commission”.

In a letter addressed to the cabinet secretary, Centre, chief secretaries and chief electoral officers of all States and UTs, the ECI had written that once the MCC comes into effect, the finance ministry would need to take its prior approval on any policy announcements, fiscal measures, taxation related issues and such other financial reliefs, and ministries would have to take its approval before announcing any benefits, the ADR submitted.

The SC, the petitioner further submitted, has not only recognised but endorsed the concept of MCC. The supplementary affidavit has been filed in the writ petition filed by the ADR in 2017 challenging the amendments made through Finance Act, 2017, which paved the way for the Scheme.

The introduction of EBs through the Finance Act, 2017, have removed the existing cap on campaign donations by companies, which was earlier fixed at 7.5% of net profit in the last three years and have legalised anonymous donations which opens doors to unchecked, unknown fundings to political parties, the ADR said.

“The Electoral Bonds Scheme has opened floodgates to unlimited corporate donations to the political parties and anonymous financing by Indian as well as foreign companies which can have serious repercussions on the Indian Democracy,” the petitioner added.

Batra termed that amendment “shocking” when the matter is set to be heard by the SC, The Wire reported. In 2018, he said, the Centre had already allowed the “illegal sale” of EBs beyond the time limit in view of the 2019 Lok Sabha election.

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