With all India elections around the corner many issues associated with the Representation of peoples act, Model Code of Conduct and Electoral funding are continuosly making it to the news. The issue of Electoral bonds which is a new funding mechanism its advantages and disadvantages and the recent challenges in the Supreme Court are very relevant areas for UPSC to pick a question from.
SC to hear plea seeking stay on Electoral bonds
Placing it in the syllabus
Constitutional bodies, Representation of People’s Act
- What are Electoral bonds?
- Brief history
- Eligibility criteria and how does it work
- Advantages and disadvantages
- Supreme Court hearing of Plea regarding Electoral bonds
What are Electoral bonds?
Electoral Bond is a bearer Banking Instrument(in the nature of promissory note ) to be used for funding eligible Political Parties. These are issued by the State Bank of India upon authorisation from the Central Government to intending donors, but only against cheque and digital payments (it cannot be purchased by paying cash).
An eligible Political Party is the one registered under Section 29A of the Representation of the People Act, 1951 and secured not less than one per cent of the votes polled in the last General Election to the House of the People or the Legislative Assembly.
A brief history of Electoral Bonds
- Electoral bond was announced in the Union Budget 2017-18.
- Expected changes to the Reserve Bank of India Act 1934, the Representation of People Act 1951, the Income Tax Act 1961 and Companies Act were made through Finance Bill, 2017.
Eligibility criteria and how does it work
The Electoral Bonds under this Scheme may be purchased by a Person, who is a Citizen of India or Incorporated or Established in India. The definition of “Person” includes-
- An Individual.
- Hindu Undivided Family
- A Company.
- A Firm.
- An Association of Persons or a Body of Individuals, whether incorporated or not.
- Every Artificial Juridical Person, not falling within any of the preceding subclauses; and
- Any Agency, Office or Branch owned or controlled by such person.
Electoral Bond is an effort made to cleanse the system of political funding in India. The scheme of electoral bonds addresses the concerns of donors to remain anonymous to the general public or to rival political parties.
From the bonds, no subtleties of the contributor nor of the intended political recipient can be made out. So electoral bond can’t be distinguished or connected with a specific purchaser or Political party. However, some security features are encoded into the bonds to prevent the issuance of fake or forged bonds. These incorporate an irregular sequential number invisible to the naked eye. In any case, the number isn’t noted by the SBI in any record related with the purchaser or political party depositing a particular electoral bond. The number isn’t being utilized or can be utilized to track the donation or the buyer.
Advantages and disadvantages
- The identity of the donor is safeguarded.
- These bonds guarantee the privacy on the political inclination of the payers. Because the name of the donor is not necessary to be filled.
- Under the cover of Election Commission of India: the donations collected through these bonds will only be credited in the party disclosed with ECI.
- Less Transparent: The plan invalidates the point for which it was envisaged. The name of the benefactor won’t be uncovered either to the party or to the general public. so, the issue to supplant unknown donations and realize transparency and accountability towards voters will continue as before. It just advances the way of life of murkiness that swarms India’s present political fund regime.
- Black Money generation: opacity in the process of Electoral bond would pave the for generation of black money into the political system.
- A threat to democracy: It seems that Government removal of the cap on donations of money to political parties to a political party by corporations in March 2017 and the present principle of keeping up namelessness of the giver will additionally build the corporate and legislators nexus to move in the direction of the satisfaction of their own aims. It will hamper democracy and making it less liable to the individual voter and progressively receptive to profound pocket particular vested parties.
Supreme Court hearing of Plea regarding Electoral bonds
The challenges of the petitioners
- The petitions have been filed by political party Communist Party of India(Marxist), and NGOs Common Cause and Association for Democratic Reforms(ADR), which challenge the scheme as “an obscure funding system which is unchecked by any authority”
- It also stated that most of the bonds that have been purchased since 2018 have been of the denominations of 10 lakh and 1 crore, indicating that it is not common citizens but corporates that have been purchasing these bonds while enjoying complete anonymity accorded by the scheme.
- It sought an immediate stay of the scheme, stating that these electoral bonds are being made available for a large number of days in three months leading to general elections solely to benefit big corporate donors.
- The petitioners further alleged that the scheme could not have been brought in through amendments made by Finance Act 2017, which was introduced and passed as a “money bill”. According to the petitioners, the amendments were disguised as money bill to bypass the upper house.