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SC to hear petition challenging electoral bonds
Context
The Supreme Court said that it will hear petitions challenging the electoral bonds scheme on October 31.
About
Points made in the petition
- The Association for Democratic Reforms, which monitors the criminal antecedents of the candidates of various parties, has alleged that the ruling party had received more than 60% of total electoral bonds in the audit of the parties in two years of 2017-18 and 2018-19.
- The NGO has noted that even the Election Commission and the Reserve Bank of India had in 2017 objected to the electoral bonds, advising against their issuance as a mode of donation to the political parties.
- Simply put, the scheme is said to be“an obscure funding system which is unchecked by any authority”.
- The government has all through defended the electoral bond scheme, describing it as completely transparent, that takes care of unaccounted funding of the political parties.
What is Electoral Bond?
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Electoral bonds were introduced through Finance Act 2017, which amended three other statutes - the RBI Act, the Income Tax Act and the Representation of People Act for enabling introduction of such bonds. |
- The government of India notified the Electoral Bonds Scheme in January 2018.
- Purpose:The bonds are issued specifically for the purpose of funding political parties.
- Issuer:Under this scheme, bonds for contributions to political parties can be issued by theState Bank of India and can be bought by any donor with a Know Your Customer (KYC) compliant account.
- Who can purchase?Electoral bonds may be purchased by a person, who is a citizen of India or a body incorporated or established in India.
- Nature:It is issued in the nature of a promissory note which shall be a bearer banking instrument. It shall not carry the name of the buyer.
- Denomination:The bonds shall be issued in the denomination of Rs 1,000, Rs 10,000, Rs 1,00,000, Rs 10,00,000 and Rs 1,00,00,000.
Why they attract Criticism?
- Contradicting its Basic Idea: The scheme does the exact opposite of what it was meant to do i.e. to bring transparency to election funding.
- Possibility of Extortion: The fact that such bonds are sold via a government-owned bank (SBI) leaves the door open for the government to know exactly who is funding its opponents.
- A Blow to Democracy: Political parties are exempted from disclosing donations received through electoral bonds.
- Against Free & Fair Elections: Electoral bonds provide no details to the citizens.
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