Electoral Bonds Scheme
Features:
- The Finance Bill of 2017 and the Electoral Bond Scheme were both introduced on January 29, 2018.
- An electoral bond may be bought by any Indian citizen, any business entity established or incorporated in India, or both.
- Electoral bonds may be purchased individually or in groups.
- The bonds are similar to cash in that the bearer can immediately redeem them and no interest is charged.
- To be eligible to receive Electoral Bonds, a political party must be registered under Section 29A of the Representation of the People Act (RPA), 1951 (43 of 1951), and it must have received at least one percent of the votes cast in the most recent general election for the House of the People or the State’s Legislative Assembly.
Procedure:
- Through its 29 authorised branches, the State Bank of India (SBI) is permitted to issue and redeem electoral bonds.
- There are 1,000, 10,000, one lakh, ten lakh, and one crore rupee bonds available from the SBI.
- For these bonds, only checks or online purchases are accepted.
- The only way to redeem election bonds issued by a recognised political party is through a bank account with the Authorized Bank.
- The placed Electoral Bond that day is credited to the account of an eligible Political Party.
- Election Bonds are only redeemable for payment to the payee political party for a period of fifteen calendar days following the date of issuance.
Advantages of electoral bonds:
- Increased Transparency: This enables political parties to communicate more openly and directly with the election commission, regulatory agencies, and the general public.
- Election bond donations would only be credited to the party bank account that was disclosed to the ECI, ensuring accountability. All donations are redeemed through banking channels, so it is expected of each political party to provide details on how the total sum received was used.
- Delaying payment The Purchase will only be accessible to a select number of banks that have been told, and even then, only checks and electronic payments will be allowed. You won’t be compensated in any way.
- Maintains Anonymity: Donations made through electoral bonds may be made anonymously by individuals, groups of persons, NGOs, religious institutions, and other trusts. Thus, the donor’s identity is concealed.
Issues with electoral bonds:
- Because they won’t be able to ascertain who, what, or how much has backed each political party, voters’ access to information will be restricted. Before electoral bonds were established, political parties were required to provide the names and addresses of any contributors who gave more than Rs 20,000. The modification compromises the public’s “Right to Know” and increases the political class’s irresponsibility.
- The current government is exempt from anonymity since it can always request data from the State Bank of India to obtain donor details (SBI). This suggests that the taxpayers are the only ones who are unaware of the origin of these presents.
- Unsolicited Contributions: It is impossible to tell from a review of a political party’s contribution report whether the party has accepted any contributions that are in violation of Section 29B of the RPA, 1951, which forbids political parties from accepting contributions from governmental entities and foreign sources. This is true in cases where contributions from electoral bonds are not disclosed.
- This could encourage crony capitalism if companies use it as a convenient way to give money to political parties that they have stashed away in tax havens in exchange for a favour or advantage. Black money could be injected as a result of an unidentified financial source.
- The removal of the 7.5% corporate donation cap by electoral bonds, which enables even loss-making companies to make unlimited contributions, as well as the possibility that corporate entities won’t benefit from transparency if they are required to disclose donations to the Registrar of Companies, are just a few examples of loopholes.
Position of the Supreme Court on electoral bonds:
- While pointing out that these transactions only took place through conventional banking channels, the Supreme Court (SC) agreed that the strategy hides the identities of election bond buyers.
- All political parties must report the ECI of any contributions made through electoral bonds, according to a 2019 Supreme Court order. Additionally, it requested that the 10-day window for buying electoral bonds be shortened to 5-days by the Finance Ministry.
- The Election Commission of India (ECI) informed the Indian Supreme Court that it disapproved of anonymous payments made to political parties in addition to underlining that it disagreed with the Electoral Bonds Scheme.
