OPACITY RULES 

#GS2 #ELECTORAL BONDS #POLICIES
CONTEXT:

  • The electoral bonds scheme undermines the voters’ right to know about funding of parties.
  • The reasons given by the Supreme Court for not staying the issuance of electoral bonds are unconvincing.
  • A Bench headed by the Chief Justice of India, Justice S.A. Bobde, has said there is no justification for staying the scheme as electoral bonds have been released in 2018, 2019 and 2020 without any legal impediment; and that “certain safeguards” have been provided in the Court’s interim order of April 12, 2019.

About Electoral Bonds: 

  • The electoral bonds were introduced with the Finance Bill (2017) and government notified the Electoral Bond Scheme 2018 to boost transparency in political funding.
  • It is a financial instrument for making donations to political parties.
  • It is like a promissory note that can be bought by any Indian citizen or company incorporated in India and the citizen or corporate can then donate the same to any eligible political party of his/her choice.
  • These bonds are issued in multiples of Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore without any maximum limit.

How the Bonds are sold?

  • The bonds are available for purchase for 10 days at the beginning of every quarter. The first 10 days of January, April, July and October have been specified by the government for the purchase of electoral bonds. An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.
  • These bonds are issued by the authorised branches of the State Bank of India (SBI) and are valid for 15 days from the date of the purchase.

Conditions to accept and redeem Electoral bonds:

  • Any party that is registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and has secured at least one per cent of the votes polled in the most recent General elections or Assembly elections is eligible to receive electoral bonds. The party will be allotted a verified account by the Election Commission of India (ECI) and the electoral bond transactions can be made only through this account.
  • The electoral bonds will not bear the name of the donor. Thus, the political party might not be aware of the donor’s identity.

Why were electoral bonds introduced in India? 

  • According to the central Government, the electoral bonds were being introduced to ensure that all the donations made to a party would be accounted for in the balance sheets without exposing the donor details to the public.
  • According to an ADR (Association of Democratic Reforms) analysis, 69% of the total income of national and regional parties between 2004-05 and 2014-15 was contributed through funding from unknown sources. 
  • The 255th Law Commission Report on Electoral Reforms observed that opacity in political funding results in “lobbying and capture” of the government by big donors. 
  • The government said that electoral bonds would keep a tab on the use of black money for funding elections. In the absence of electoral bonds, donors would have no option but to donate by cash after siphoning off money from their businesses.
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Controversy over the Bonds:

  • Experts have an opinion that if the electoral bonds scheme had been introduced to bring about greater transparency, the government must not restrain from allowing details of such donations to be made public.
  • SBI being a government-owned bank will hold all the information of the donors which can be favourable to the party in power and also deter certain entities from donating to the opposition due to fear of penalisation.
  • Experts and several politicians believe that since neither the purchaser of the bond nor the political party receiving the donation is required to disclose the donor’s identity, the shareholders of a corporation will remain unaware of the company’s contribution. Voters, too, will have no idea of how, and through whom, a political party has been funded.
  • Opponents of the electoral bond scheme argue that since the identity of the donor has been kept anonymous, it could lead to an influx of black money. Some others allege that the scheme was designed to help big corporate houses donate money without their identity being revealed. According to civil rights societies, the concept of donor “anonymity” threatens the very spirit of democracy.
  • Neither the donor nor the political party (receiver) is obligated to reveal whom the donation comes from. In 2019, the Supreme Court held that all political parties who had received donations through electoral bonds must submit details to the Election Commission of India. This undercuts a fundamental constitutional principle, the freedom of political information, which is an integral element of Article 19(1) (a) of the Constitution.
  • The removal of the limit cap of 7.5% on corporate donations, elimination of the requirement to reveal political contributions in profit and loss statements and also the elimination of the provision that a corporation must be three years in existence, undercuts the intent of the scheme.

Election Commission of India’s view on electoral bonds: 

  • The Election Commission on April 10, 2019, told the Supreme Court of India that while it was not against the Electoral Bonds Scheme, it did not approve of anonymous donations made to political parties.
  • The ECI stated that We are not opposed to electoral bonds…but want full disclosure and transparency. We are opposed to anonymity,” Senior Advocate Rakesh Dwivedi, appearing for the poll panel, told the apex court. The poll panel’s submissions came during a hearing on a bunch of pleas challenging the validity of electoral bonds in the apex court.

 SOURCE: THE HINDU

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