Editor, Goemkarponn
AERIAL VIEW
The proponents of electoral bonds argue that they promote transparency by ensuring that political parties receive donations through formal banking channels, which can be audited by government authorities. Furthermore, the identity of the donors remains confidential, reducing the risk of retaliation or intimidation for their political affiliations.
However, since their inception, electoral bonds have been a subject of significant controversy, with many questioning whether they have achieved their intended goals or have instead facilitated opacity in political financing.
One of the main criticisms of electoral bonds is the lack of transparency regarding the source of funds.
SURAJ NANDREKAR
Editor, Goemkarponn
The Supreme Court on Thursday struck down the electoral bonds saying it violates the Right to Information.
The petitioners argued that the anonymity in the electoral bonds affects the transparency of political funding and infringes on the voters’ right to information, which is sacrosanct in a democracy
The government implemented the electoral bonds in 2018. A press release by the Ministry of Finance in January 2018 said the government had notified the scheme to cleanse the system of political funding.
The concept behind these bonds was to reduce the influence of black money in politics and to provide a legal and transparent mechanism for individuals and corporations to contribute to political parties.
The Finance Ministry said in 2018 that electoral bonds would be a bearer instrument. In case of bearer instruments, generally, no ownership information is recorded and the holder of the document is assumed to be the owner.
Who can buy these bonds and from where?
The electoral bonds are interest-free banking instruments and a citizen of India or a body incorporated in the country is eligible to purchase them.
These bonds are available in multiple denominations, ranging from Rs 1,000 rupees to Rs 1 crore in specified branches of the State Bank of India (SBI).
Electoral bonds can only be bought by making payment from a bank account. The bond, the finance ministry press release said, would not carry the name of the payee and have a life of only 15 days, during which it can be used for making donations to political parties meeting certain criteria.
The electoral bonds, handed over to political parties, can be encashed only through designated bank accounts by the parties.
Electoral bonds shall be available for purchase for a period of 10 days each in January, April, July and October, as may be specified by the central government, the finance ministry said in 2018. An additional 30-day period shall be specified by the Centre in a general election year.
WHY ELECTORAL BONDA WERE CONTROVERSIAL?
The proponents of electoral bonds argue that they promote transparency by ensuring that political parties receive donations through formal banking channels, which can be audited by government authorities. Furthermore, the identity of the donors remains confidential, reducing the risk of retaliation or intimidation for their political affiliations.
However, since their inception, electoral bonds have been a subject of significant controversy, with many questioning whether they have achieved their intended goals or have instead facilitated opacity in political financing.
One of the main criticisms of electoral bonds is the lack of transparency regarding the source of funds.
The donor’s identity is not disclosed to the public or the Election Commission, which makes it difficult to track the origin of political contributions. This opacity has led to concerns that electoral bonds could be used to launder illicit money into the political system.
In 2017, then Reserve Bank of India (RBI) Governor Urjit Patel spoke about the possibility of misuse of electoral bonds, especially through the use of shell companies. He suggested that the electoral bonds be in digital form, instead of being in physical form.
It has also been seen that the party in power gets most of the funding and this uneven funding hasn’t been rectified even with the introduction of the electoral bond system. Critics argue that this undermines the principle of a level playing field in democratic elections.
BJP Benefitted from electoral bonds?
The ruling Bharatiya Janata Party received nearly Rs 1300 crore through electoral bonds in the 2022-23, which was seven times more than what the Congress got in the same period through the same route.
The BJP’s total contributions stood at Rs 2120 crore in the 2022-23 fiscal, of which 61 per cent came from electoral bonds, according to the party’s annual audited report submitted to the Election Commission.
In FY 2021-22, the party’s total contributions were to the tune of Rs 1775 crore. The party’s total income in 2022-23 stood at Rs 2360.8 crore, up from Rs 1917 crore in FY 2021-22.
The Congress, on the other hand, earned Rs 171 crore from electoral bonds which was down from Rs 236 crore in FY 2021-22.
The Samajwadi Party, a recognised state party, had earned Rs 3.2 crore through electoral bonds in 2021-22. In 2022-23, it received no contributions from these bonds.
Another state recognised party, the TDP, earned Rs 34 crore through electoral bonds in 2022-23 which was up 10 times from the previous fiscal.
The BJP also earned Rs 237 crore from interests in the last fiscal, up from Rs 135 crore in 2021-22.
Out of its total expenditure on ‘election and general propaganda’, the BJP paid Rs 78.2 crore for use of aircraft and helicopters, which is down from Rs 117.4 crore in 2021-22.
The party also paid Rs 76.5 crore as financial assistance to candidates, down from Rs 146.4 crore in 2021-22. The party has shown this assistance under the head ‘total payments’.
