The Supreme Court is scheduled to hear on Friday the pleas challenging the validity of of the Centre's decision on issuance of electoral bonds for political funding.
The top court is hearing a batch of pleas questioning the validity of and seeking a stay on the scheme, which was introduced in January 2018. The petitioners include the Association for Democratic Reforms and Communist Party of India (Marxist) General Secretary Sitaram Yechury.
ADR has recently filed an application in the court seeking stay on the Electoral Bond Scheme, 2018, which was notified by the Centre in January last year.
It has said that amendments carried out in the relevant Acts have "opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies, which can have serious repercussions on the Indian democracy".
The application further said: "Electoral bonds are being made available for a large number of days in the three months leading to the general election in the country...In April-May 2019 to constitute the 17th Lok Sabha."
The matter holds importance as the Centre and the Election Commission (EC) have taken a contrary stand with the former justifying the decision saying it would promote transparency in political funding while the later saying the changes made in the law would have "serious repercussions".
On Wednesday, the Centre had opposed the concerns raised by the Election Commission on issuing electoral bonds and justified the changes in law by saying that it was "a pioneer step" to bring poll reforms "ensuring transparency" and "accountability" in political funding.
The government in its fresh affidavit said that the massive amount of political donations were earlier made in cash by individuals or corporates using "illicit means of funding" under the old system and unaccounted black money was pumped in for financing elections.
The Centre's stand is significant as the poll panel in its affidavit said that the changes made in several laws by the central government will have "serious repercussions" on transparency.
The BJP-led NDA government had announced electoral bonds in the earlier budget, claiming that the scheme would clean up political funding. The government's move was resisted by opposition parties.