Supreme Court will hear the petition challenging electoral bonds

Why In News ?

• Recently, the Supreme Court has said that it will hear the petitions challenging the electoral bond scheme in the last week of October. Petitions challenging the plan were filed by Common Cause and Association for Democratic Reforms (ADR) NGOs.
• The petitioners believe that anonymous funding through electoral bonds promotes corruption and violates the right of citizens to a corruption-free nation.

With reference to electoral bonds:    

• The electoral bond system was introduced through a Finance Bill in the year 2017 and was implemented in the year 2018.
• They serve as a means for individuals and institutions to donate to registered political parties while maintaining the anonymity of the donor.
• An electoral bond is a bearer instrument like a promissory note, which is payable to the holder on demand for donating his contribution to political parties.

Features of Electoral Bonds:

• State Bank of India (SBI) issues bonds in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore. Payable on demand of the holder and interest free.
• This bond is purchasable by Indian citizens or institutions established in India. Along with this, this bond is purchasable individually or jointly with other persons.
• The lifespan of an electoral bond is only 15 days, during which it can be used to make donations only to registered political parties.
• The bonds will be available for purchase for a period of 10 days in the months of January, April, July and October as specified by the Central Government.
• Political parties will have to disclose the amount to the Election Commission.
• Donations are made through banking channels, ensuring transparency.
• Political parties are bound to inform about the use of funds received.

Bank issuing electoral bonds:

• State Bank of India (SBI) is the authorized issuer of electoral bonds.
• Electoral bonds are issued through designated SBI branches.

Provision for eligibility of electoral bonds:

• To obtain electoral bonds, a political party must be registered under Section 29A of the Representation of the People Act, 1951.
• Political parties must have secured at least 1% of the votes in the recent Lok Sabha or State Assembly elections.

Objectives of introducing electoral bonds:

• The electoral bond scheme was aimed at promoting a shift from cash-based political donations to digital transactions.
• By facilitating donations through banks, the government aims to reduce the use of unaccounted or black money in political funding.
• Its purpose was to provide anonymity to donors. The name of the donor is not mentioned on the bond.
• Donors contributing less than Rs 20,000 to political parties through purchase of electoral bonds are not required to provide their identity details such as PAN etc.
• The move aims to establish a documentary trail of donations, making the process more transparent and accountable.
• The objective of the Electoral Bond Scheme is to increase transparency in political funding.

Criticism of Electoral Bonds:

• Electoral bonds are donations given to political parties that keep the identity of the donors and recipients anonymous. They may compromise the right to know, which is part of the right to freedom of expression under Article 19 of the Constitution.
• Anonymity can be compromised due to government access to donor data. This means that the government in power can take advantage of this information which can disrupt free and fair elections.
• Critics argue that the anonymity provided by electoral bonds can be misused for money laundering or channeling black money into the political system.
• This, in turn, opens the possibility for the current government to extort money, especially from big companies, or harass them for not handing over funds to the ruling party.
• Unlike other forms of political funding, electoral bonds do not require approval or verification by the Election Commission of India, which may weaken the Election Commission of India’s monitoring role in regulating political funding and ensuring a level playing field.

Source – PIB

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The post Supreme Court will hear the petition challenging Electoral Bonds appeared first on Youth Destination IAS.