Amendments in Electoral Bond Scheme-The Hindu-09-11-2022

Amendments in Electoral Bond Scheme-The Hindu-09-11-2022
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POLITY


What is the Electoral Bond Scheme?

Electoral Bonds:

Electoral bonds are money instruments like promissory notes, which can be bought by companies and individuals in India from the State Bank of India (SBI) and donated to a political party, which can then encash these bonds.

The bonds are only redeemable in the designated account of a registered political party.

A person being an individual can buy bonds, either singly or jointly with other individuals.

Electoral Bond Scheme:

Electoral Bonds Scheme was launched in 2018 to to cleanse the political funding in India.

The central idea behind the electoral bonds scheme is to bring about transparency in electoral funding in India.

The government had described the scheme as an “electoral reform” in a country moving towards a “cashless-digital economy”.

What are the Amendments Made to the Scheme?

Additional Period of 15 Days:

Introduced a new para, stating that an additional period of fifteen days shall be specified by the Central Government in the year of general elections to the Legislative Assembly of States and Union territories with Legislature.

In 2018, when the Electoral Bond Scheme was introduced, these bonds were made available for a period of 10 days each in January, April, July and October, as may be specified by the central government.

An additional period of 30 days was to be specified by the Central Government in the year of the General election to the House of People.

Validity:

The Electoral Bonds shall be valid for fifteen calendar days from the date of issue and no payment shall be made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period.

The Electoral Bond deposited by an eligible Political Party in its account shall be credited on the same day.

Eligibility:

Only the political parties registered under Section 29A of the Representation of the People Act, 1951 which secured at least 1% of votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly are eligible to receive Electoral Bonds.

Electoral Bonds


Transparency & Accountability

Government Policies & Interventions

Elections

Issues Arising Out of Design & Implementation of Policies

Electoral Bond

Electoral Bond is a financial instrument for making donations to political parties.

The bonds are issued in multiples of Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore without any maximum limit.

State Bank of India is authorised to issue and encash these bonds, which are valid for fifteen days from the date of issuance.

These bonds are redeemable in the designated account of a registered political party.

The bonds are available for purchase by any person (who is a citizen of India or incorporated or established in India) for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government.

A person being an individual can buy bonds, either singly or jointly with other individuals.

Donor’s name is not mentioned on the bond.

Background: The Electoral Bond Scheme acts as a check against traditional under-the-table donations as it insists on cheque and digital paper trails of transactions, however, several key provisions of the scheme make it highly controversial.

Misuse of Electoral Bonds as Pointed Out in the Supreme Court:

Anonymity: Neither the donor (who could be an individual or a corporate) nor the political party is obligated to reveal whom the donation comes from.

Government’s Defence:

Conditions for Electoral Bonds: Only parties registered under the Representation of the People Act 1951 could receive donations through electoral bonds, and they also should not have secured less than 1% of the votes polled in the previous elections.

To Take on the Menace of Black Money in Politics: Only white money is involved in the Bonds as the amounts are paid only through cheque or demand draft.

KYC norms are also followed.

Election Commision of India’s Support: ECI was not opposed to the bonds but was only concerned about the aspect of anonymity.

It also urged the court not to stay the bonds and said the scheme is one step forward compared to the old system of cash funding, which was unaccountable