CHALLENGING ELECTORAL BONDS
07, Apr 2019
Prelims level : Election & Electoral Reforms Mains level : GS - II Governance, Constitution, Polity, Social Justice and International relations
Why is it in News?
- The Election Commission of India, in an affidavit filed in the court, said the electoral bonds had made political funding opaque and would have “serious repercussions on transparency of political funding” owing to its anonymous nature.
What is electoral bond scheme?
- It is an attempt to “cleanse the system of political funding in the country.” A donor may buy an electoral bond at specified banks and branches using electronic modes of payment and after having completed the KYC (know your customer) requirements.
Where are they available?
- The electoral bonds are available at specified branches of the State Bank of India (SBI) for 10 days each in the months designated by the government from time to time. The bonds may be bought for any value, in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh or ₹1 crore.
- The bone of contention over the electoral bond scheme is that while the government has consistently said the scheme will increase transparency in electoral funding, it has ignored the reservations of several political parties and even the Election Commission.
- The parties do not have to disclose where their money comes from, as long as the mode of funding is through electoral bonds. This provision, to exempt parties from declaring the sources of the electoral bonds they receive, was done through an amendment to the Representation of the People Act by the Finance Act, 2017. Another amendment that has been criticised is the one to the Foreign Contribution Regulation Act (FCRA), which the Election Commission said will allow political parties to receive funding from foreign companies with a majority stake in Indian companies.
Are people using these bonds?
- Data revealed through the Right to Information replies by the State Bank of India show that large sums have been bought through electoral bonds. A separate RTI reply by the SBI has shown that the bank had sold ₹222 crore worth of electoral bonds in March 2018, the only month in financial year 2017-18 when these bonds were sold.