India’s electoral bond scheme, introduced in 2018 to enhance transparency in political funding, has instead become a focal point for controversy and calls for reform. Designed to anonymize donors and mitigate black money in elections, the scheme has been criticized for exacerbating opacity and facilitating unaccounted contributions. With the Supreme Court poised to review its constitutionality and growing public demand for clean electoral processes, the time is indeed ripe for comprehensive reform. Addressing the shortcomings of electoral bonds is crucial to restoring faith in India’s democratic framework, ensuring fair competition, and upholding the principles of transparency and accountability in political financing.
Tag: GS-2 Polity
In News: The recent ruling by the Supreme Court, which invalidated the electoral bonds scheme, has provided opposition parties with a significant opportunity to elevate it as a critical issue during the ongoing parliamentary election campaign.
Addressing the Imperative for Transparency and Reform
- The imperative for transparency and reform has been underscored both by the Supreme Court’s rulings and by the prevailing public sentiment, emphasizing the urgent need to curtail the prevalence of untraceable funds within political circles.
- As awareness among the public regarding the operational methods and financial resourcing of political entities continues to burgeon, it presents a ripe occasion for the government to enact substantive reforms.
- The ensuing proposals are geared towards mitigating the concerns surrounding the operational and monetary aspects of political parties.
Reforms in Political Party Functioning
- Recognition as Public Bodies: It is proposed that political parties should be recognized as public bodies under the Constitution. Consequently, they should be brought under the purview of the Right to Information Act to ensure transparency.
- Institutional Regulation: The establishment of a National Commission for Political Parties, akin to the Election Commission of India (ECI), is advocated. This commission would regulate all aspects of political parties, allowing the ECI to focus solely on conducting elections.
- Non-secular nature: A prerequisite for registration should be that political parties must not indicate a non-secular nature in their names.
- Secular and Democratic Principles: Political parties should be mandated to operate on secular and democratic principles. Additionally, there should be limited tenures for elected office-bearers to foster inclusivity and prevent the consolidation of power.
- Annual Audits: It is suggested that the accounts of political parties undergo annual audits, with the results being made public for transparency purposes.
Funding Reforms
- Transparency in Donations: Complete transparency regarding donors and recipients is deemed essential. To achieve this, all donations should be made through banking channels, and details of each transaction should be reported to the National Commission for Political Parties.
- Tax Incentives and Liabilities: Political parties should not incur tax liabilities on donations received. Conversely, donors should receive a 100% tax rebate on their contributions. However, to deter the use of cash donations, such contributions should be subject to heavy taxation.
- Income Tax Returns: Irrespective of tax liability, political parties should be obligated to file income tax returns.
- Donation Limits: A donation cap should be imposed to prevent any single donor from contributing more than 20% of their average net profits over the previous three years to political parties. Additionally, donors must report all their contributions to the National Commission for Political Parties.
- Sector-Specific Norms: Donors from tax-exempt sectors, such as agriculture, should channel their donations through banking channels. Norms for such donations should be set by the government based on the respective sector’s holdings.
- Auditing Powers: The National Commission should possess the authority to audit the accounts of any political party, if deemed necessary, utilizing the services of the Comptroller and Auditor General (CAG).
Public Consultation and Implementation
- The central government should engage in soliciting public comments on the proposed policy for funding political parties before finalizing it.
- This approach aims to minimize legal challenges and ensure that the policy resonates with public expectations and interests.
Conclusion
The implementation of these reforms holds the potential to enhance the transparency and accountability of political parties, thereby fortifying the democratic process in India. Public support for these measures is imperative, and it is anticipated that many enlightened politicians would endorse these suggestions as they ultimately serve to bolster public trust in their respective parties.
Source: DH
FAQs
1. What are Electoral Bonds?
Answer: Electoral Bonds are financial instruments introduced in India in 2018, which are used for funding political parties. These bonds can be purchased from designated banks and donated to political parties anonymously. The aim was to bring transparency to political funding and reduce the influence of black money.
2. Why is there a need for Electoral Bond Reform?
Answer: Electoral Bond Reform is necessary due to several concerns:
- Lack of Transparency: The anonymity of the donors undermines transparency in political funding.
- Possible Misuse: There are fears that these bonds could be used to launder black money.
- Impact on Democracy: The secrecy could lead to a situation where political parties become more beholden to corporate donors, impacting democratic processes.
- Disproportionate Influence: Wealthy individuals and corporations might gain disproportionate influence over the political system, skewing policies in their favor.
3. What are the criticisms against the current Electoral Bond Scheme?
Answer: Criticisms of the current Electoral Bond Scheme include:
- Anonymity of Donors: It allows donors to remain anonymous, making it difficult to track who is funding whom.
- Potential for Corruption: There is a concern that the system may promote corruption and enable the circulation of black money.
- Lack of Regulation: There is insufficient regulation and oversight over how the funds are used by political parties.
- Inequitable Access: Smaller parties may find it harder to compete for funds, leading to an uneven playing field.
4. What reforms are suggested for improving the Electoral Bond system?
Answer: Suggested reforms include:
- Enhanced Transparency: Mandating disclosure of donor identities to ensure greater transparency.
- Regulatory Oversight: Strengthening regulatory oversight to monitor the use of electoral bonds and ensure compliance with the law.
- Capping Donations: Introducing caps on the amount that can be donated through electoral bonds to prevent disproportionate influence by wealthy donors.
- Independent Audits: Conducting independent audits of political party finances to ensure proper use of funds and adherence to regulations.
5. How can Electoral Bond Reform strengthen democracy in India?
Answer: Electoral Bond Reform can strengthen democracy in India by:
- Promoting Fairness: Ensuring that all political parties have an equal opportunity to raise funds, leading to a more level playing field.
- Enhancing Accountability: Making political funding more transparent will hold parties accountable to their donors and the public.
- Reducing Corruption: Transparent funding mechanisms can reduce the scope for corruption and the influence of black money in elections.
- Encouraging Public Trust: When the electoral process is seen as fair and transparent, it enhances public trust in the democratic system and its institutions.
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