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Election Commission of India and Electoral Bond

15 Mar 2024 Election Commission of India and Electoral Bond

Posted at 19:18h in Daily current-affairs by
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Source – The Hindu and PIB.

 

General Studies – Electoral Bond Scheme, Political Parties, Representation of the People Act, 1951, Impact of Electoral Bonds on the electoral process, Transparency and accountability in the electoral process, Government policies and intervention issues arising from formulation and implementation of policies.

Why in the News ?

 

 

 

  • Recently, following strict directions from the Supreme Court of India, State Bank of India had shared electoral bond data with the Election Commission of India on March 12.
  • The Supreme Court of India had given time till 5 pm on March 15 to the Election Commission to upload the data on its website.
  • The Election Commission has put out the details on ‘Disclosure of Electoral Bonds offered by SBI’ in two parts.
  • According to data uploaded by the poll panel, buyers of electoral bonds included Grasim Industries, Megha Engineering, Piramal Enterprises, Torrent Power, Bharti Airtel, DLF Commercial Developers, Vedanta Ltd, Apollo Tyres, Sula Wines, Welspun, and Sun Pharma, Lakshmi Mittal, Edelweiss, PVR, Keventer.
  • According to the data, the parties that have encashed electoral bonds include BJP, Congress, AIADMK, BRS, Shiv Sena, TDP, YSR Congress, DMK, JDS, NCP, Trinamool Congress, JDU, RJD, AAP and Samajwadi Party.
  • In a landmark judgment delivered on February 15 by the Supreme Court of India, a five-judge Constitution bench had struck down the Centre’s electoral bond scheme that allowed secret political funding, calling it “unconstitutional” and The Election Commission was ordered to make public the names of donors, the amount donated by them and the recipients. ,
  • According to electoral bond data released by the State Bank, Future Gaming and Hotel Services PR, whose managing director is well-known lottery magnate Santiago Martin, was the biggest donor to political parties between April 12, 2019, and January 24, 2024. Published by the Election Commission of India on 14 March on the orders of the Supreme Court of India.
  • The firm donated a cumulative amount of ₹1,368 crore through electoral bonds during this period. Incidentally, the Enforcement Directorate had seized ₹411 crore in the bank accounts of this firm and other companies in March 2022 and later filed a prosecution complaint against it under the Prevention of Money Laundering Act, 2002, before the PMLA Court, Kolkata on September 9, 2023. Did..
  • Bharatiya Janata Party has received electoral bonds worth ₹6060.5 crore between April 12, 2019 and January 24, 2024, which is the highest amount raised through electoral bonds by all political parties in India. During this period, BJP’s share in the total bonds redeemed was more than 47.5%.
  • Indian Trinamool Congress received an amount of ₹1,609.50 crore (12.6%) through electoral bonds followed by Congress with ₹1,421.9 crore (11.1%), are making them the second and third largest parties in terms of encashment during this period. 

Gradual developments related to the validity of the electoral bond scheme in India :

 

 

Electoral bond scheme in India is a way of funding various political parties. In the case related to the validity of the electoral bond scheme, a five-judge Constitution bench of the Supreme Court has given a historic verdict on 15 February 2024, canceling it.

  • The Electoral Bond Scheme was introduced in the Parliament through the Finance Bill in the year 2017 In India.
  • On September 14, 2017, an NGO called ‘Association for Democratic Reforms’ (ADR) filed a challenge in the Supreme Court against this scheme as the lead petitioner.
  • On October 03, 2017, the Supreme Court issued notice to the Central Government and the Election Commission of India on the PIL filed by that NGO.
  • On January 2, 2018, the Central Government notified the Electoral Bond Scheme in India.
  • On November 7, 2022, the electoral bond scheme was amended to increase the number of sale days in a year from 70 to 85, where any assembly election can be scheduled.
  • On October 6, 2023, Chief Justice of the Supreme Court of India D.Y. The Supreme Court bench headed by Chandrachud referred the petitions against the scheme to a five-judge constitution bench.
  • On October 31, 2023, Chief Justice of the Supreme Court of India D.Y. A five-judge Constitution bench headed by Chandrachud began hearing petitions against the plan.
  • On November 2, 2023, the Supreme Court reserved its decision on this scheme.
  • On February 15, 2024, the Supreme Court of India gave a unanimous verdict striking down the electoral bond scheme, saying that it violates the constitutional right to freedom of speech and expression as well as the right to information granted to Indian citizens by the Indian Constitution. Does.

The Supreme Court of India had agreed to focus mainly on two important issues during the hearing related to the electoral bond scheme. Those two important issues are the following – 

  1. Violations of citizens’ right to information about the legality of secret donations to political parties and the financing of political parties, potentially fueling corruption.
  2. These issues relate to violation of Constitutional Articles 19, 14 and 21.

Introduction and background of Electoral Bond Scheme :

  • The electoral bond system in India was introduced in the Parliament through a Finance Bill in the year 2017 and was also implemented in the year 2018.
  • Electoral bonds in India serve as a vehicle for individuals and institutions to make donations to registered political parties under the scheme without keeping the names of the donors secret or making public.

Features of Electoral Bond Scheme :

 

 

  • Under the electoral bond scheme in India, State Bank of India issues bonds of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
  • This bond issued by State Bank of India is interest free and is payable on demand by the holder.
  • This bond can be purchased by any Indian citizen or any institutions established in India.
  • Electoral bonds in India can also be purchased individually or jointly.
  • This electoral bond issued by State Bank of India is valid only for 15 days from the date of issue.

 

Authorized issuing banks for electoral bonds in India :

 

 

  • The authorized issuing bank for electoral bonds in India is the State Bank of India.
  • In India, electoral bonds are issued only through designated State Bank of India branches.

Eligibility of political parties to buy electoral bonds in India :

  • Section 29A of the Representation of the People Act, 1951 Under this, only those registered political parties in India, which have secured at least 1% of the votes cast for the Lok Sabha or Assembly in the last general election, are eligible to purchase this electoral bond.
  • In India, electoral bonds can be purchased only through digital medium or cheque.
  • In India, encashment of electoral bonds can be done only through the authorized bank account of the political party.

Transparency and accountability towards electoral bonds :

  • Political parties in India are required to disclose their bank account details to the Election Commission of India.
  • To ensure transparency in electoral bonds, donations are made through banking channels.
  • In India, it is mandatory for various political parties to give details of the use of money received from electoral bonds.

Benefits of Electoral Bond Scheme in India :

 

 

  • The money received under the Electoral Bond Scheme in India increases the transparency of the election funding expenses of various political parties in India.
  • Political parties are liable to disclose the use of funds received under the Electoral Bond Scheme or as donations.
  • Under the Electoral Bond Scheme there is a reduction in cash in kind or cash transactions.
  • Donors’ names are kept secret or the confidentiality of the donor’s identity is protected.

 

Main concerns and challenges related to electoral bond scheme in India :

Electoral bond scheme being contrary to its basic idea :

  • The main reason for criticism of the electoral bond scheme in India is that it works completely contrary to its basic idea or objective, which is to bring transparency in electoral funding.
  • A section of critics regarding the electoral bond scheme in India argue that the secrecy of electoral bonds is applicable only to the public and opposition parties and does not apply to political parties receiving donations.

Strong possibility of extortion under electoral bond scheme : 

  • In India, electoral bonds are sold through the state-owned bank (SBI), which allows the ruling government to know who is funding its opponents’ parties.
  • Under the Electoral Bond Scheme it provides the facility to the ruling party or the current government to recover money especially from the big companies or sometimes it facilitates the ruling party to harass that person or that company for not giving money to the ruling party. It also shows the strong possibility of. It somehow provides an unfair advantage to the ruling party.

Strong possibility of the right to information being compromised :

  • The Supreme Court of India has long held that the right to information is an integral part of the right to freedom of expression (Article 19) under the Indian Constitution, especially in the context of elections.
  • In India, the Central Government had made several amendments to the Electoral Bond Scheme through two Finance Acts, Finance Act, 2017 and Finance Act, 2016, both Finance Acts. ‘Money Bill’ As it was passed in the Lok Sabha.
  • The petitioners challenged these amendments in the Supreme Court of India.‘Unconstitutional’, ‘Principles of Separation of Powers’ and ‘Fundamental Rights’ The electoral bond scheme was challenged on the ground of violation of a series of provisions.

Against fair and free election process :

  • Electoral bonds in India do not provide any details of the source of funds received by Indian citizens.
  • Keeping the names of donors given in the form of electoral bonds secret or not making their names public, the effect of the said anonymity does not apply to the then ruling political parties or the government, which always demands data from the State Bank of India (SBI). By doing this you can access the details of the donor.
  • This means that the government in power can take advantage of this information and disrupt free and fair elections.

Against the basic concept of Indian democratic system :

  • In India, the Central Government, through an amendment in the Finance Act 2017, has given exemption to political parties to declare the name of donations received through electoral bonds.
  • No citizen or voter of India ever knows which person, which company or which organization has provided how much funds to which party through electoral bonds.
  • In a representative democracy of any country with a democratic system, citizens cast their votes for those who represent them in the Parliament. Therefore, the citizens of India should have the right to know how much money any political party has received through electoral bonds.

Focusing on the profits of big corporate houses and big business houses :

  • The electoral bond scheme in India has opened the door to unlimited corporate donations and secret financing by Indian and foreign companies to various political parties in India, which can have serious implications for Indian democracy.
  • Big business houses benefit from 100% tax exemption on donations made by corporate and even foreign entities in India under the electoral bond scheme.

Promotion of crony capitalism :

  • The electoral bond scheme in India removes all previously existing limits on political donations and allows corporations with effective resources to finance elections. As a result, the path to crony capitalism is paved.
  • Crony capitalism is a capitalist economic system characterized by close, mutually beneficial collusion between businessmen and government officials. Due to which there may be a threat to India’s democratic system.

 

 

Conclusion /Solution :

 

 

  • There is an urgent need to implement measures to increase transparency in the electoral bond scheme in India.
  • There should be strict rules regarding disclosure to the Election Commission regarding receipt of donations by political parties in India and the Election Commission of India should be empowered to investigate any kind of donations and both electoral bonds and money spent on elections and elections. There should be a strict provision for clarification regarding
  • There is an urgent need to identify and address the existing shortcomings in electoral bonds to prevent risks such as potential misuse, violation of donation limits and crony capitalism and flow of black money in respect of funds raised from the electoral bond scheme in India.
  • Time bound implementation of the Electoral Bond Scheme through judicial scrutiny, periodic review and public participation to address emerging concerns about democracy in the current Indian democratic system, to adapt to changing political scenarios and to ensure a more inclusive decision making process in a democracy. There is an urgent need to ensure monitoring.
  • There is an urgent need for bold reforms at the political level as well as effective regulation of political financing to stop the vicious cycle of corruption prevalent in India’s democracy and bureaucracy and the decline in the quality of democratic politics.
  • To make the entire governance system more accountable and transparent in India’s democracy, it is extremely important to remove the loopholes in the existing laws regarding the Electoral Bond Scheme.
  • In Indian democracy, significant changes can be brought about in the existing electoral bond scheme by starting voter awareness campaigns.
  • In Indian democracy, if the voters become aware of the basic principles of democracy and reject those candidates and political parties who spend more money in elections or bribe the voters, then Indian democracy will move a step forward towards its basic objective. Will go. Which is a sign of a bright future for the democracy of the Indian democratic system.

 

Practice Questions for Preliminary Exam :

Q.1. Consider the following statements regarding electoral bonds.

  1. The Electoral Bond Scheme was introduced in the Parliament through the Finance Bill in the year 2017  in India
  2. The authorized issuing bank for electoral bonds in India is the Reserve Bank of India.
  3. In India, electoral bonds can be purchased through cash, digital medium, demand draft, ATM and cheque.
  4. Electoral bonds are interest free and payable on demand by the holder.

Which of the above statement/statements is/ are correct?

(A)  Only  1 and 3

(B) Only 2 and 3

(C) Only 2 and 4

(D) Only 1 and 4 

 

Answer – (D)

 

Practice Questions for Main Exam :

Q.1. What do you understand about electoral bonds? Discuss that in India How do electoral bonds affect the clean, fair, malpractice-free and transparent election process? Explain logically. 

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