SC seeks Centre, EC reply on corporate funding of parties through electoral bonds

New Delhi, Oct 3 (IANS) The Supreme Court on Tuesday sought response of the Centre and the Election Commission (EC) on a plea challenging changes to various statutes through two Finance Acts for issuance of electoral bonds for electoral funding.

The bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud sought responses on the plea by petitioner NGOs Association of Democratic Reforms (ADR) and the Centre for Public Interest Litigation (CPIL) who also sought direction that political parties must not be allowed to accept any cash donations.

The petitioner NGOs have challenged various amendments to the Companies Act, Income Tax Act, Representation of the People Act, Reserve Bank of India Act and the Foreign Contribution Regulations Act (FCRA) made through the Finance Act 2017-2018 and the Finance Act 2016-2017.

The petitioner NGOs have contended the import of these amendments was that corporate houses could make unlimited donations to political parties and need not even give details of such donations.

Besides, the annual contribution reports of political parties to be furnished to the Election Commission need not mention names and addresses of those contributing by way of electoral bonds, the petition said.

"This will have a major implication for transparency in political funding," said counsel Prashant Bhushan appearing for the ADR and the CPIL.

Through the amendments under challenge, the earlier limit of 7.5 per cent of the company's average three-year net profit for political donations has also been removed.

In other words, corporate houses can make unlimited political donations without divulging the name of political parties they are funding.