Topic:General Studies 2:
- Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these.
Context:
The Supreme Court declined to stay the electoral bond scheme of the government.
Also, a fresh window for purchase of bonds is set to open, coinciding with the Delhi Assembly election.
What is Electoral Bond Scheme?
Electoral bonds: Conditions
Why were electoral bonds introduced in India?
Restrictions that were done away with after the introduction of the electoral bond scheme
Criticisms of EBS
Legalising Political Corruption: Since neither the purchaser of the bond nor the political party receiving the donation is required to disclose the donor’s identity, the shareholders of a corporation will remain unaware of the company’s contribution. Voters, too, will have no idea of how, and through whom, a political party has been funded.
Possibility of Money Laundering: Since the identity of the donor has been kept anonymous, it could lead to an influx of black money. With doing away with all the safeguard that were present in Corporate donations to Political parties (through Companies Act), Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.
Large Corporations and not common man is utilizing this route: Nearly 91.76% (Rs 5,624 crore) of the total number of bonds purchased during the 12 phases were in the denomination Rs 1 crore. Thus, there is possibility of unholy nexus developing between Corporates and Political parties for favourable policies which comes at the cost of public welfare
Against Smaller Regional Parties: 80.5% of the total Electoral Bonds redeemed between March 2018 and October 2019 were encashed in New Delhi (while maximum value of bonds was purchased in Mumbai) where national parties’ headquarters are located
New sale windows during State elections: The government’s scheme was meant for Lok Sabha elections, but the sale window for bonds had been opened before State Assembly elections repeatedly, which is beneficial for Central ruling party.
Non Transparency: The SBI has refused to divulge the names of those who purchased the electoral bonds under the RTI Act. The scheme infringes the citizens’ fundamental ‘Right to Know’ by withholding crucial information regarding electoral funding
Election Commission of India’s view on electoral bonds
ECI, in its response filed in the court, said the provisions would enable the creation of shell companies for the sole purpose of making political donations.
It also stated that the amendments to the law on foreign contributions would mean that there would be unchecked foreign funding of political parties, leading to foreign influence on India’s policy-making.
Reserve Bank of India on electoral bonds scheme
The central bank had warned the government that the bonds would “undermine the faith in Indian banknotes and encourage money laundering.”
Supreme Court’s View on Electoral Bonds
In an order in April 2019, SC had asked political parties to disclose to the Election Commission of India (ECI), in sealed covers, details of the donations they had received through the anonymous bond. However, it had refused to stay the scheme on the grounds of “limited time” available then (impending General Elections to Lok Sabha) and “the weighty issues” involved in the matter.
Way Forward
Connecting the dots:
