Decoding Electoral Bonds

Electoral Bonds

Electoral Bonds

Electoral bonds are a controversial financial instrument introduced by the Government of India in 2018 as a means of funding political parties. These bonds were introduced with the aim of increasing transparency in political funding and reducing the use of cash in elections. However, they have been widely criticized for their potential to increase the influence of corporate donors and for their lack of transparency.Electoral bonds are essentially a form of promissory note that can be purchased from specified branches of the State Bank of India (SBI) by any citizen or corporate entity. These bonds can then be donated to registered political parties, who can encash them through their designated bank accounts. The identity of the donor is kept anonymous, and the political party is not required to disclose the identity of the donor to the Election Commission or the public.

Arguement on Electoral Bonds

Supreme Court: Review Petition filed against Electoral Bonds judgment
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One of the main criticisms of electoral bonds is that they allow for unlimited and anonymous donations to political parties, which can increase the influence of corporate donors in the political process. Critics argue that this could lead to a situation where political parties become beholden to their corporate donors, rather than to the electorate.

Another criticism of electoral bonds is that they lack transparency. Unlike donations made through other means, such as cheques or online transfers, donations made through electoral bonds do not require the political party to disclose the identity of the donor. This lack of transparency makes it difficult for the public to know who is funding political parties and raises concerns about the potential for corruption and crony capitalism.

Proponents of electoral bonds argue that they are a step towards increasing transparency in political funding. They argue that electoral bonds provide a legal and transparent means for individuals and corporate entities to donate to political parties, without the use of cash. They also argue that electoral bonds help prevent black money from being used in political funding, as all donations must be made through banking channels.

The Court held that the Scheme by permitting anonymous political donations infringed upon the fundamental right to Information Under Article 19(1)(a) of the Constitution . It pointed out that such a right is not only restricted to fulfilled the Freedom of Speech and Expression but plays a key role in furthering participatory democracy by holding the government accountable . Thus, it is not just a means to an end but an end in itself . It highlighted that Economic inequality leads to differing levels of political engagement because of the deep association of Money and Politics. There is a legitimate possibility that financial contributioin to a political party would lead to quid pro quo arrangements.

Electoral Bonds Data: Who's Behind Megha Engineering & Infrastructure  Limited, Linked to Donations Worth Rs 1200 Cr?
Image Source: thequint

The Court found that the ammendment made to Section 182 of the Companies Act, 2013, permitting unlimited political contributions by companies. This unlimited Corporate Donations violate Free and Fair Elections. Therefore, SBI has been ordered to immediately stop the issuance of any further electoral bonds and furnish details of such April 12, 2019, to the ECI by March 6, 2024.

However, critics argue that electoral bonds do not address the underlying issues of political funding in India, such as the lack of accountability and transparency in political parties. They argue that electoral bonds only serve to further entrench the influence of big donors in the political process, while excluding smaller donors and the general public. The Central Criticism of the Electoral Bonds scheme is that it does the exact opposite of what it was meant to do i.e. to bring transparency to election funding.

Electoral bonds are a controversial financial instrument introduced by the Government of India to fund political parties. While proponents argue that they increase transparency in political funding, critics argue that they increase the influence of corporate donors and lack transparency. The debate over electoral bonds highlights the complex nature of political funding in India and the challenges of balancing transparency and accountability in the political process.

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