Electoral Bonds Day #8: Bench Decides to Hear Three Issues in Separate Cases

The Finance Act, 2016 was enacted in May of that year as a ‘Money Bill’. Money Bills require the approval of only the Lok Sabha, unlike other Bills which must be approved by both the Lok Sabha and the Rajya Sabha. The Act amended the Foreign Contribution (Regulation) Act, 2010 (FCRA) and made it easier for political parties to receive foreign funds with reduced oversight. In 2017, another Finance Act was enacted which amended the Representation of People Act, 1951, and allowed political parties to receive funding through electoral bonds without reporting it to the Election Commission. 

In January 2018, the Union notified a new electoral bonds scheme that allows individuals and corporations to anonymously make donations to a political party. This scheme was challenged by two NGOs: the Association for Democratic Reforms (ADR) and Common Cause. They argued that the 2016 and 2017 Finance Acts were illegally enacted as Money Bills and that anonymous foreign contributions threaten the right to free and fair elections. The Election Commission seconded the latter point through an affidavit arguing that the scheme would reduce transparency and increase foreign influence on political parties.