The Supreme Court Friday refused to stay for now the contentious electoral bonds scheme, which enables anonymous funding to political parties but asked all parties to submit to the Election Commission details of electoral bonds received by them till date. The poll body is expected to preserve the furnished details till the time the apex court hears the matter again on an “appropriate day”.
What are electoral bonds?
The Finance Bill, 2017 introduced “Electoral bonds” as interest-free bearer instruments (like Promissory Notes) that will be available for purchase from the State Bank of India within a designated window of 10 days in every quarter of the financial year. The scheme, which was notified on January 2, 2018, allows individuals and domestic companies to present these bonds — issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore — to political parties of their choice, which have to redeem them within 15 days. Buyers of the bonds have to submit full KYC details at the time of buying. But the beneficiary political party is not required to reveal the identity of the entity that has given it the bond(s).
How will electoral bonds help?
Terming its decision to introduce electoral bonds as “a big step towards electoral reform”, the Centre told the Supreme Court on Thursday that the process envisaged in acquiring and encasing the bonds “will ensure transparency” and “accountability”.
The Union Finance Ministry said this in an affidavit filed in response to petitions filed by the CPM and others, who alleged that the bonds, by way of which contributions can be made to political parties, sought to create an anonymous and secretive mechanism for increasing the wealth of parties and brought in unreasonable restrictions on the freedom to know the identity of the contributor.
The move, the Centre said, was part of a “conscious legislative policy” to further electoral reforms “to defeat the growing menace of black money, especially when the country is moving towards a cashless-digital economy”.
What does the Election Commission think of electoral bonds?
In its affidavit to the Supreme Court filed on March 25, the EC said that “any donation received by a political party through an electoral bond has been taken out of the ambit of reporting under the Contribution Report”, and if information on the money received through such bonds is not reported, “it cannot be ascertained whether the political party has taken any donation in violation of provisions” of the Representation of the People Act, which “prohibits the political parties from taking donations from government companies and foreign sources”.
The Commission also flagged the issue of laws being changed to allow political parties to receive contributions from foreign companies, which would “allow unchecked foreign funding of political parties in India which could lead to Indian policies being influenced by foreign companies”.
Opposition on Electoral bonds
Senior Congress leader Abhishek Singhvi hailed the Supreme Court direction to political parties to provide details of donations received in electoral bonds and the identity of the donors to the Election Commission in a sealed cover by May 30.
He said, the ruling is a setback to the ruling BJP as electoral bonds had become electoral corruption of the BJP.Singhvi asked the BJP to reveal its “murky flood of money” received through such bonds and predicted that the flow of money to the BJP will now suddenly dry up.