SC to hear plea against sale of electoral bonds
Details:
- Chief Justice of India Sharad A. Bobde agreed to urgently hear a plea by NGO Association for Democratic Reforms to stay the sale of a new set of electoral bonds on April 1, before the Assembly elections in crucial States such as West Bengal and Tamil Nadu.
- The Reserve Bank of India (RBI) and the Election Commission had both said that the sale of electoral bonds had become an avenue for shell corporations and entities to park illicit money and even proceeds of bribes with political parties.
Electoral Bond:
- An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
- The citizen or corporate can then donate the same to any eligible political party of his/her choice.
- The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest.
- The electoral bonds were introduced with the Finance Bill (2017). The government notified the Electoral Bond Scheme 2018.
- Use of electoral bonds:
- The bonds will be issued in multiples of Rs 1,000, Rs 10,000, Rs 100,000 and Rs 1 crore (the range of a bond is between Rs 1,000 to Rs 1 crore).
- These will be available at some branches of SBI.
- A donor with a KYC-compliant account can purchase the bonds and can then donate them to the party or individual of their choice.
- The receiver can encash the bonds through the party's verified account. The electoral bond will be valid only for fifteen days.
- Bond availability:
- The electoral bonds are available for purchase for 10 days in the beginning of every quarter.
- An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.
- Conditions:
- Any party that is registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and has secured at least one per cent of the votes polled in the most recent General elections or Assembly elections is eligible to receive electoral bonds.
- The electoral bonds will not bear the name of the donor. Thus, the political party might not be aware of the donor's identity.
Controversy over electoral bond:
- If the electoral bonds scheme had been introduced to bring about greater transparency, the government must not restrain from allowing details of such donations to be made public.
- 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.
- Opponents of the electoral bond scheme argue that since the identity of the donor has been kept anonymous, it could lead to an influx of black money.
- Some others allege that the scheme was designed to help big corporate houses donate money without their identity being revealed.
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Election Commission of India's view on electoral bonds: The Election Commission on April 10, 2019 told the Supreme Court of India that while it was not against the Electoral Bonds Scheme, it did not approve of anonymous donations made to political parties.
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 in 2019 on electoral bonds: On April 12, 2019 the Supreme Court asked all the political parties to submit details of donations received through electoral bonds to the ECI. It also asked the Finance Ministry to reduce the window of purchasing electoral bonds from 10 days to five days. |
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