Electoral Bonds
What are Electoral Bonds?
An Electoral Bond is a mechanism for anonymously funding political parties in India. Introduced in the 2017 Union Budget, it allowed individuals and companies to purchase bearer bonds from the State Bank of India (SBI) and donate them to eligible political parties.
Electoral bonds are a way for individuals and organizations to donate money to political parties in India. These bonds can be purchased from selected banks and then given to political parties. They're designed to make political funding more transparent and accountable.
Key Features of Electoral Bonds:
1. Anonymity: Donors can buy electoral bonds without revealing their identity, ensuring privacy.
2. Validity Period: These bonds are valid for a certain period, typically 15 days, after which they must be used.
3. Authorized Banks: Electoral bonds can only be bought from specific branches of authorized banks.
4. Denominations: They come in different amounts, allowing donors to contribute according to their means.
5. Transparency: While donors remain anonymous, political parties must declare the bonds they receive, promoting transparency in funding.
How Electoral Bonds Work?
Electoral bonds function as a method for individuals and entities to contribute funds to political parties in India. The process involves several steps:
1. Purchase: Individuals or entities buy electoral bonds from specified branches of authorized banks. These bonds are available in various denominations, allowing donors to choose the amount they wish to contribute.
2. Donation: Once purchased, the electoral bonds are given to the political party of the donor's choice. Donors can donate these bonds to any registered political party.
3. Redemption: Political parties can redeem the electoral bonds within a specified validity period, typically 15 days, by depositing them into their designated bank accounts. The funds received through the redemption of electoral bonds can be used by the political parties for various legitimate activities, including election campaigning, organizational expenses, and other party-related functions.
4. Transparency: While donors remain anonymous, political parties are required to declare the details of the electoral bonds they receive in their financial statements. This ensures transparency and accountability in political funding, as the sources of funding are recorded and disclosed publicly.
Benefits of Electoral Bonds
1. Transparency: They make political funding more transparent by ensuring that donations are traceable.
2. Anonymity for Donors: Donors can support parties without fear of exposure, protecting their privacy.
3. Regulated Funding: Electoral bonds help regulate political funding, reducing the risk of illegal or corrupt practices.
4. Accountability: Political parties are accountable for the bonds they receive, enhancing transparency in the electoral process.
Controversy and Abolition
1. Lack of Transparency: The anonymous nature of the scheme was challenged, citing violation of the Right to Information (RTI) Act.
2. Concerns over Influence: Critics argued it could lead to undue influence from undisclosed corporate donors on political parties.
Supreme Court Ruling regarding Electoral Bonds Scheme in India:
In Feb, 2024, the Supreme Court of India declared the Electoral Bond scheme unconstitutional.
The court highlighted the anonymity aspect as contradicting the RTI Act and directed:
1. Immediate cessation of issuing Electoral Bonds.
2. Disclosure of past transactions: State Bank of India to submit details of bond purchases to the Election Commission of India.
Current Status of Electoral Bonds in India as of 2024
As of March 13, 2024, the Electoral Bond scheme stands abolished. The Election Commission is mandated to publish details of past transactions on their website by March 15, 2024.
Electoral bonds simplify and regulate the process of political funding, promoting transparency and accountability in India's electoral system.
