Electoral Bonds Scheme
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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.
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