The Logical Indian

Electoral bonds are largely promissory notes that any citizen can buy or any company incorporated in India could buy from selected branches of the State Bank of India (SBI). After that, the buyer can donate the bond to any political party of their choice. Like banknotes, the electoral bonds are also payable to the bearer on demand and free of all interest. Any individual or company could purchase these bonds via cash or cheque. On January 29, 2018, Prime Minister Narendra Modi notified the Electoral Bond scheme after it was discussed in the Finance Bill in 2017 by then Finance Minister Arun Jaitley.

How Are Electoral Bonds Used?

Moreover, the electoral bonds neither hold the information about the buyer or the payee nor the receiver or the bond's owner, a political party. SBI is the only bank authorized to sell the bonds in denominations of ₹ 1,000; ₹10,000, ₹1 Lakh and ₹ 1 crore. After the donor donates the bonds, the political party can encash the amount within 15 days. Buyers could purchase any number of bonds they wish to. If the political party fails to encash the bonds within fifteen days, SBI deposits the amount to the Prime Minister's Relief Fund. Between March 2018 and January 2021, the bank collected more than 12,900 electoral bonds worth ₹6,534.78 crores in fifteen phases.

However, when the proposal was placed, the Opposition vehemently criticized the bonds. The central point of contention was the clause of anonymity to the donors. Before the electoral bonds were in place, all the political parties were supposed to receive all donations of about ₹ 20,000. The politics, which already severely in the news for corruption, became even more unaccountable after implementing electoral bonds.

What Was The Criticism of Electoral Bonds?

The Indian Express quoted the Association of Democratic Reforms (ADR), which moved to the Supreme Court against the authorization of electoral bonds, saying, "while electoral bonds provide no details to the citizens, the said anonymity does not apply to the government of the day, which can always access the donor details by demanding the data from the State Bank of India (SBI). This implies that the only people in the dark about the source of these donations are the taxpayers. It may also be noted that the printing of these bonds & SBI commission for facilitating the sale and purchase of the bonds is paid from the taxpayers' money by the central government".

In three years, from 2018 to 2021, electoral bonds have become the most common route of donation to the political parties by anonymity to the donors. ADR analyzed that more than half of the income to the national parties between 2018 and 2019 came through the electoral bonds. The ruling Bharatiya Janata Party (BJP) received over 60 per cent of the total amount of ₹2760 crores. Ironically, PM Modi-led NDA government had started the electoral bonds to ensure transparency in the electoral procedure. The government had said that the bonds would keep a tab on black money. Moreover, the government had been told that the donors donated money in cash after siphoning it off their respective businesses in the absence of the electoral bonds.

The experts argued that if the bonds were indeed formulated to bring more transparency to the system, then the donations' details should be made available to the public. The Opposition had also argued that since the bonds' donors and recipients would remain undisclosed, the shareholders would remain unaware of their companies' contribution to the elections. Moreover, the voters would be kept in a dilemma without knowing where and from whom the political party has been funded. Congress even allege that any donation received through electoral bonds was equivalent to money laundering.

Election Commission's Stand

In 2017, the Election Commission of India (ECI) had also demonstrated apprehension about the new system to the Supreme Court. After that, the top court heard the plea in April 2019 and asked all the political parties to give the details of their donations to the ECI. Moreover, it had requested the Ministry of Finance to reduce the withdrawal window to five days. The ECI had told the top court that while it was not against the scheme of electoral bonds, it would not approve of the clause of anonymous donations for the political parties.

Apart from the Opposition and the ECI, the Reserve Bank of India (RBI), the Ministry of Law and Justice, and other MPs had also raised eyebrows over the legitimacy of the electoral bonds. The anonymity clause infringes upon the citizen's 'right to know and makes the political class unanswerable and unaccountable. In a more dubious instant, the identity of the donors is kept hidden from the citizens but is shared with the government authorities.

Advocate Bharat Bhushan had said that "Electoral Bond scheme would be seen as facilitating electoral bonding and can offset the war against black money". Public opinion on the scene was also tilted against the ruling party as they wanted accountability from the government regarding the funding of political parties during the elections.

The electoral bonds scheme came ahead of the 2019 general elections, and a considerable sum of money went unaccounted for. On the other hand, while speaking in favour of the ruling party, Union Leader Piyush Goyal had tweeted, "The Electoral Bonds are a prime instance of electoral reform, aimed to remove corruption from the system as now donors will be able to donate only through cashless channels".

Recent Developments

In a recent development, electoral bonds worth ₹1213 crores were sold by SBI in January. Out of the total, ₹ 784 crores were encashed in New Delhi and pointed a direct finger at the political parties, while Mumbai sold bonds worth more than ₹489 crores. The development comes when campaigning is in full swing in Goa, Manipur, Punjab, Uttar Pradesh and Uttarakhand.

While the debate has been going on for more than four years now, it is probably time for the ruling party to pay heed to the public's calls to disclose the source of the funds. If the scheme continues similarly, it will remain clouded with doubts.

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