Electoral Bonds Scheme

Description

Copyright infringement is not intended

Context - The Supreme Court of India agrees to Urgent hearing of the Electoral Bonds Case.

Details

The Chief Justice of India N.V. Ramana Stated that the court agrees to start an urgent hearing of a long-pending challenge against the Electoral Bonds Scheme of the Union Government.
The Public Interest Litigation (PIL) was filed against the Electoral bond scheme in 2017 by the Association for Democratic Reforms.

About Electoral Bond Scheme

The Electoral bonds were introduced with the Finance Bill (2017).
The Union Government has notified the detailed guidelines about the Electoral Bonds Scheme in January 2018, with the objective to cleanse the system of political funding in the country.
The Electoral Bond is a bearer instrument in the nature of a Promissory Note and an interest-free banking instrument.
- A bearer instrument is a document that authorises the holder with the right of ownership or title of the property, such as Currency, shares or bonds.
- Unlike normal registered instruments, no record is kept about the owners of bearer instruments or about the transfer of ownership.
- Whoever physically holds the bearer document is assumed to be the owner of the property.
Electoral bonds may be purchased by a person, who is a citizen of India or established in India.
- An individual can buy electoral bonds either singly or jointly with other individuals.
- The Electoral Bond does not carry the name of the payee.
Electoral bond would be issued/purchased for any value, in multiples of Rs 1,000 from the specified branches of the State Bank of India (SBI).
- Electoral Bonds have a validity of 15 days.
Political parties registered under Section 29A of the Representation of the People Act, 1951 and also secured a minimum of 1% of votes polled in the last general election to the House of the People or the Legislative Assembly of the State, are eligible to receive electoral bonds.
The Electoral Bonds shall be available for purchase for a period of 10 days each in the months of January, April, July and October, as may be specified by the Central Government.
- An additional period of 30 days shall be specified by the Central Government in the year of the General election to the House of People.
Electoral Bonds can be encashed by an eligible political party only through their bank accounts with the authorised bank.
- The bonds do not have the name of the donor or the receiving political party.
- It only carries a unique hidden alphanumeric serial number as an in-built security feature.
Electoral bonds protect the identity of political donors and parties receiving contributions.
- Donors who contribute less than Rs 20,000 to political parties through the purchase of electoral bonds need not provide their identity details such as PAN, etc.

Finance Bill (2017)

Before the bill came into force;
- A company donating to a political party could contribute a maximum of 7.5% of the average of its net profits in the last three financial years.
- It was required to disclose the details of the contributions made to any political parties along with the name of the political parties to which such contribution were made.
The Finance Bill (2017) introduced new provisions;
- It removed the maximum limit set on the companies for donations to political parties, now there is no limit on companies for donating to political parties.
- It also removed the requirement for a company to disclose the name of the political parties to which it was donating.
The bill adds that "contributions will have to be made only through a cheque, bank draft, electronic means, or any other scheme notified by the government to make contributions to political parties."

Arguments in favour of Electoral Bond

It promotes transparency in funding and donation received by political parties.
It is an important “electoral reform” toward a “cashless-digital economy”.
It is a tool to eradicate black money in political funding.

Arguments against Electoral Bond

The bonds increase the anonymity of political donations, Citizens will not be able to know who is donating how much money to which political party.
Promoting corruption and lack of transparency in the accounts of all political parties.
The electoral bonds scheme has opened floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies which is a threat to Indian democracy.

Concern

The Election Commission and the Reserve Bank of India objected to electoral bonds and had advised against the issuance of electoral bonds as a mode for donation to political parties.
It alleged that almost 99% of electoral bonds purchased are of value one crore and 10 lakh denominations which shows that it is not individual citizens but large corporations which are purchasing these bonds with a view to receiving kickbacks from the government.
The Election Commission of India had filed an affidavit in 2019, saying the government’s scheme for political funding has legalised anonymity.

Important Reforms Taken in Electoral System

The right to vote irrespective of Caste, Creed, Religion or Gender.
Lowering the voting age from 21 to 18 through the 61st Amendment Act of 1988.
Provision was made for voting by Certain Classes of Persons through Postal ballot.
A facility for voting through Proxy was provided to the Service voters belonging to the Armed forces.
Rajya Sabha elections were reformed by removing the domicile of the Contesting Candidate and the Introduction of an open ballot system was introduced.
Exemption of travelling expenditure from being included in the election expenses of the Candidate was made.
Restrictions were imposed on conducting exit Polls and Publishing the results of exit Polls.
Provision was made for the disqualification of a Person found guilty of Corrupt Practices.
Appointment of appellate authorities within the district.
Voting rights to Citizens of India living abroad were provided in 2010.
The ceiling on election expenditure was increased.
Those who are deemed unsound of mind and People Convicted of Certain Criminal offences are not allowed to vote.
Introduced Electoral Photo Identity Card, also allows certain alternative documents like government I-Cards, Passports, PAN Cards, driving license, bank/Post office account Passbook, Property documents, SC/ST/OBC Certificate, Pension documents, Job cards issued under NREGA and Health insurance Scheme Smart Cards to establish the identity of the electors in the Polling Stations.
Introduced by 52nd Amendment Act, for the disqualification of the members of Parliament and the State legislatures on the ground of defection from one Political Party to another.
- Disqualification on grounds of defection is not to apply in the case of a Split.
Model Code of Conduct evolved by Election Commission on the basis of a consensus among political parties.
All Recognised National and State Parties have been allowed free access to the State-owned electronic media: AIR and Doordarshan.
NOTA Option - In its efforts of Cleansing the Political System, Supreme Court upheld the right of voters to reject all Candidates Contesting the elections.