Electoral bond-like new scheme likely after Lok Sabha 2024 polls: Report

The government is reportedly working on a new scheme for funding political parties which would be an alternative to the electoral bonds scheme that was struck down by the Supreme Court earlier this year.

What will new scheme for funding political parties include? 

A report by Mint cited two sources aware of the discussions in the government, saying the new scheme will “address the concerns” the apex court had pointed out while striking down the electoral bonds scheme.

When will the new scheme replacing electoral bonds scheme be launched?

The report cited unnamed sources as saying that the new scheme is expected to be introduced after the Lok Sabha 2024 polls.

Voting for 543 seats in Lok Sabha will be held in seven phases from April 19 to June 1. The counting of votes and announcement of results is scheduled for June 4.

Intense discussions underway

As per the report, the Ministry of Finance has been holding internal consultations on the new scheme, which when introduced, may open new routes for funding for political parties which were stopped after the apex court struck down electoral bonds as unconstitutional.

Meanwhile, Prime Minister Narendra Modi, in his first reaction to the scrapping of the poll bond scheme, said those “dancing and taking pride” will soon regret it.

In a recent interview with a Tamil channel - Thanthi TV, PM Modi dismissed the argument that the top court’s striking down of the electoral bond scheme as unconstitutional was a setback to his government.

The PM stated that no system is perfect and any shortcomings could be improved upon.

“Tell me, what have we done that I should see it as a setback? I firmly believe that those celebrating over it (bond details) and taking pride in it are going to repent,” the Prime Minister said.

The electoral bonds scheme, which were launched in 2017, allowed individuals and corporate entities to donate money to political parties anonymously through financial instruments.

In a significant ruling on February 15 this year, the Supreme Court scrapped the electoral bonds scheme saying that some provisions of the scheme that were signed into law through the Finance Act of 2017 were “unconstitutional” on account of non-disclosure of information relating to political funding.

Underscoring the complexity of political funding, AK Verma, director of the Centre for Study of Society and Politics, said: “The possibility of evolving a political funding regime that addresses the transparency requirements without causing embarrassment to parties and donors, through a consensus among parties, cannot be ruled out provided there is effort in that direction.”

“This can happen only after the elections. “The apex court should have given guidance on an alternative mechanism,” Verma said.

Experts unanimously pointed out that political parties could come together to frame a transparent funding regime after the elections and also emphasised the importance of guidance from the Supreme Court on alternative mechanisms.