Electoral bonds have emerged as a contentious issue, provoking widespread debate and analysis within the political and economic spheres. Introduced as a financial instrument to promote transparency in political funding, electoral bonds have faced criticism for their potential to undermine democratic principles. Critics argue that the anonymity provided by these bonds allows for untraceable donations to political parties, raising concerns about the influence of undisclosed corporate interests on the political landscape. Additionally, the lack of disclosure requirements for political parties receiving these bonds has sparked fears of corruption and a lack of accountability. Proponents, on the other hand, contend that electoral bonds encourage legitimate and transparent financial contributions to political parties, shielding donors from potential retribution. As the debate unfolds, the efficacy of electoral bonds in striking a balance between financial privacy and political transparency remains a central point of discussion in the ongoing discourse on electoral reforms.
Tag: GS-3 Indian Economy GS-2 Indian Political System
Context:
As the constitutionality of electoral bonds faces increasing challenges, it is imperative for citizens to advocate for a fairer electoral landscape in the upcoming elections.
What are Electoral Bonds?
- The electoral bonds system, introduced in 2017 through a Finance bill and implemented in 2018, provides a mechanism for individuals and entities to contribute to registered political parties while maintaining donor anonymity.
- Key features include the issuance of bonds in denominations ranging from Rs 1,000 to Rs 1 crore by the State Bank of India (SBI), being payable to the bearer on demand and interest-free.
- These bonds can be purchased by Indian citizens or entities established in India, individually or jointly, and are valid for 15 calendar days from the date of issue.
- SBI is the sole authorized issuer of electoral bonds, distributed through designated branches.
- Eligibility for political parties to receive these bonds is contingent on being registered under Section 29A of the Representation of the People Act, 1951, and securing not less than 1% of the votes polled in the last general election.
- Electoral bonds can be acquired digitally or through cheques, with encashment permitted only through an authorized bank account of the political party.
- To ensure transparency and accountability, parties must disclose their bank account details with the Election Commission of India (ECI), and the entire donation process is conducted through banking channels.
- Political parties are also obligated to explain the utilization of the funds received.
- The system’s benefits include heightened transparency in political party funding, accountability in disclosing donation utilization, discouragement of cash transactions, and the preservation of donor anonymity.
Issues with electoral Bonds
- The electoral bonds scheme, aimed at bringing transparency to election funding, has faced significant criticism for contradicting its basic idea.
- Critics argue that the anonymity provided by electoral bonds only shields donors from the broader public and opposition parties, leaving room for potential extortion and unfair advantages for the ruling party.
- The bonds, sold through a government-owned bank (SBI), raise concerns about the government’s ability to identify donors, potentially leading to extortion or victimization of contributors.
- Additionally, the exemption of political parties from disclosing donations under the scheme compromises the voters’ right to know, a fundamental aspect of a representative democracy.
- The Electoral Bonds Scheme has been accused of favoritism towards wealthy corporates, as it enables unlimited corporate donations with 100% tax exemption.
- This, coupled with the lack of transparency, opens the door to crony capitalism, allowing well-resourced corporations to influence elections without limits.
- The scheme’s impact on free and fair elections is questioned, as the government can access donor details, potentially disrupting the democratic process.
- The removal of pre-existing limits on political donations further exacerbates concerns about crony capitalism, fostering close relationships between business leaders and government officials.
Way Forward
- Effective regulation of political financing, coupled with bold reforms, is essential to disrupt the harmful cycle of corruption and the deterioration of the quality of democratic governance.
- It is imperative to address the loopholes in existing laws to enhance accountability and transparency throughout the governance machinery.
- Citizens can play a significant role in driving substantial changes by advocating for awareness campaigns.
- By rejecting candidates and political parties that engage in overspending or bribery, voters can contribute to elevating the standards of democracy.
Source: TH
Frequently Asked Questions (FAQs)
1. Q: What are electoral bonds, and how do they function in the context of political funding?
A: Electoral bonds are financial instruments that individuals and corporate entities can purchase from authorized banks and then donate to political parties in India. These bonds were introduced to streamline the process of political funding and make it more transparent. Donors can purchase these bonds and then transfer them to the chosen political party, ensuring a degree of anonymity.
2. Q: How do electoral bonds address the issue of transparency in political funding?
A: Electoral bonds aim to enhance transparency by channeling political contributions through banking channels. The bonds are intended to reduce the use of cash in political donations and create a traceable, auditable trail for contributions. However, concerns have been raised about the anonymity aspect, as the donor’s identity is not disclosed to the public.
3. Q: Are there any restrictions on who can purchase and donate electoral bonds?
A: Yes, electoral bonds can be purchased by individuals and entities incorporated in India. Foreign entities are not eligible to buy these bonds. Additionally, the bonds have a specific validity period, and they can only be donated to political parties that are registered under the Representation of the People Act, 1951.
4. Q: Why do critics express concerns about electoral bonds, and what are the main points of contention?
A: Critics argue that electoral bonds compromise transparency as the identity of the donor is not disclosed to the public. This anonymity raises concerns about the potential influence of undisclosed corporate interests on political decisions. Additionally, the lack of disclosure requirements for political parties receiving these bonds has led to fears of corruption and a lack of accountability.
5. Q: How have electoral bonds impacted political funding in India since their introduction?
A: Since their introduction, electoral bonds have become a significant source of political funding. Proponents argue that they have streamlined the process and reduced the use of cash in political donations. However, concerns persist about the lack of transparency and the potential for misuse. The impact of electoral bonds on the overall political funding landscape continues to be a subject of ongoing debate and scrutiny.
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