Electoral bonds: All you need to know -Governance Now

Electoral bonds: All you need to know

Supreme Court in interim order asks parties to share details with poll panel

GN Bureau | April 12, 2019

#Association for Democratic Reforms #Lok Sabha elections #political funding #Arun Jaitley #electoral bonds #Supreme Court #Election Commission

Illustration: Ashish Asthana

A bench headed by chief justice of India Ranjan Gogoi in interim order on Friday asked all parties to submit receipts of the electoral bonds to the EC in sealed covers, while posting the matter for detailed hearing at an “appropriate date”. The background to the debate:

What is the electoral bond scheme?

Political parties are voluntary organisations and not profit-making bodies. They run on donations, which unfortunately are often in cash – in black money. As part of the government’s drive against black money, soon after the demonetization of November 2016, the budget 2017 announced the electoral bond scheme to clamp down on this channel of underground economy. It was notified in the gazette on January 2, 2018.

How does the scheme work?

Any individual or organization can buy electoral bonds (of Rs 1,000, Rs, 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore) from the specified branches of the State Bank of India, during ten days at the beginning of every quarter. The bank issues the bonds only after a KYC, establishing the identity of the bond buyer. The buyer can then give the bonds to the political party/parties, which can deposit the same in their bank accounts. The bank accounts are verified by the election commission (EC). The bond works like a promissory note or a bearer bond.

How does this curb corruption?

The budget 2017 capped the maximum amount of cash a party can accept in donation to Rs 2,000, promoting payments through cheques, digital platforms and these bonds. The bonds have the full money trail in the bank, though the political party at the receiving end would not know the identity of the donor. Finance minister Arun Jaitley has maintained that the scheme is a step towards transparency.

What is the criticism of the scheme?

Civil society activists have argued that, forget transparency, the scheme is actually increases opaqueness – especially for the voter, who has no way to figure out which corporates or interest groups have given how much donation to which political party. Earlier, this was possible as the names of all donors for amounts above Rs 20,000 would be revealed in the statements parties file with the EC. That bit of transparency is gone with the electoral bonds.

Is the criticism valid?

While the finance minister has repeatedly spoke of enhanced transparency, in the supreme court the government has admitted otherwise. In opposing the interim plea by the Association for Democratic Reforms (ADR) seeking a stay on the electoral bonds, attorney general KK Venugopal argued in the supreme court that “transparency cannot be the mantra”. He also said, “why should voters know where the money of the political parties is coming from”.

Comments

Other News

Careless whispers and the impossible trinity

Time can never mend, the careless whispers of … As the RBI marches ahead, for the upcoming monetary policy meeting this June, whispers from the corridors echo around several policy options to defend the rupee – by deploying forex reserves, raising in

Bullet Train Project: Third mountain tunnel breakthrough achieved

A major engineering milestone has been achieved in the Mumbai–Ahmedabad Bullet Train Project with the successful breakthrough of the third mountain tunnel (MT-07) at Ambesari village in Dahanu Taluka of Palghar district, Maharashtra. With this achievement, three mountain

Supreme Court gets five new judges

Five new judges were appointed to the Supreme Court of India on Monday. "Vide Notifications of even number dated 01.06.2026, in exercise of the powers conferred by clause (2) of Article 124 of the Constitution of India, the Hon’ble President of India is pleased to appoint (i) Shri

Astonishing breadth and depth of ancient Indian knowledge systems

The Greatest Books of Ancient India: Incredible Ideas about Science, Music, Maths, Art and More By Dr. Pradeep Chakravarthy and Dr. R. Thiagarajan Hachette India, 208 pages, Rs 399

Strong El Nino threat over India`s monsoon, food & water security

India is heading into the southwest monsoon season this year under the shadow of a rapidly strengthening El Nino, with meteorologists warning that the climate phenomenon could significantly disrupt rainfall patterns, intensify heat stress and place additional pressure on the country’s agriculture-d

How corporates can nudge real change

The Business Of Business Is (Not) Just Business: How Behavioural Tools Can Drive Real Change Edited by Sutapa Banerjee, with Foreword by Nadir Godrej HarperCollins, 336 pages, Rs 699