Electoral Bonds in India

Introduction:

Electoral bonds were introduced in India in 2018 by the government as a means to reform political funding and ensure greater transparency. These bonds allow individuals and corporations to donate to political parties anonymously, with the intention of reducing the influence of black money in elections.

Key Features:

1. Eligibility:

• Only Indian citizens and entities incorporated or established in India can purchase electoral bonds.
• Political parties registered under Section 29A of the Representation of the People Act, 1951, and that have secured at least 1% of the votes in the previous general election, are eligible to receive these bonds.

2. Denominations and Validity:

• Bonds are available in denominations of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore.
• They are valid for 15 days from the date of issuance.

3. Purchase and Redemption:

• Bonds can be bought from specified branches of the State Bank of India (SBI) during designated periods.
• Political parties can redeem these bonds only through a designated bank account.

4. Anonymity:

• The donor’s identity remains confidential, although the information is accessible to the bank.
• This anonymity is intended to protect donors from potential political retribution.

Objectives:

• Enhance Transparency: To bring transparency to the electoral funding process by moving donations from cash to banking channels.
• Curb Black Money: To reduce the use of illicit money in political campaigns.
• Encourage Clean Funding: To promote donations from legitimate sources.

Criticisms:

1. Lack of Transparency:

• While the bonds aim to enhance transparency, the anonymity feature has been criticized for potentially obscuring the source of funds.
• Critics argue that this could lead to an increase in undisclosed donations and reduce public accountability.

2. Potential for Influence:

• There are concerns that corporations and wealthy individuals could use electoral bonds to buy political influence.
• This could lead to a scenario where political decisions are swayed by large donations from powerful entities.

3. Impact on Smaller Parties:

• The system may disproportionately benefit larger, well-established political parties.
• Smaller parties and independent candidates might find it harder to compete for funds.

4. Bank Secrecy:

• Although banks know the identity of the donors, this information is not available to the Election Commission or the public, leading to questions about the effectiveness of oversight.

Legal and Public Debates:

• The electoral bond scheme has faced legal challenges in the Supreme Court of India, with petitioners arguing that it undermines democratic transparency.
• Public debate continues around whether the benefits of electoral bonds in reducing black money outweigh the concerns regarding donor anonymity and potential misuse.

Conclusion:

Electoral bonds represent a significant step in the effort to reform political funding in India. While they aim to curb black money and promote transparency, their implementation has sparked considerable debate. Balancing the goals of donor privacy and public transparency remains a crucial challenge. The ongoing scrutiny and legal challenges suggest that further reforms and adjustments may be necessary to address the concerns raised and to ensure that the electoral process remains fair and transparent.