What are Electoral Bonds and why you should know it
- Last updated on March 24
- 9:27 am
What are Electoral Bonds?: Electoral bonds are financial instruments introduced in India in 2018 as a means of making political donations more transparent and accountable. They were introduced by the government as part of its efforts to reform political funding and reduce the influence of black money in elections.
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What are Electoral Bonds and why you should know it.
The tenure of electoral bonds is only 15 days. During which it can be used only to donate to political parties registered under the Representation of the People Act. Donations can be made through the Electoral Bond only to those political parties that have secured at least one percent of the votes in the last general election for the Lok Sabha or Assembly.
The Government of India had announced the Electoral Bond Scheme in 2017. This scheme was implemented by the government on January 29, 2018. In simple words, electoral bonds are a financial means of donating to political parties. It is like a promissory note that any citizen or company of India can purchase from select branches of SBI and donate to any political party of their choice.
Why ban imposed on Electoral Bonds?
The Supreme Court said the electoral bond scheme is a violation of Article 19 (1) (a). For this reason, the Supreme Court has banned electoral bonds. The public has every right to know how much money has been received by which government. The court issued instructions saying, “State Bank of India (SBI) should give all the details of the contributions made so far through electoral bonds to the Election Commission by March 31, 2024.” The court also directed the Election Commission to share the information on its official website by April 13, 2024.
When and who can buy electoral bonds?
Electoral bones are released in the months of January, April, July, and October. Electoral Bond can be purchased by any citizen who has a bank account whose KYC details are available. Electoral Bond does not contain the name of the payer. Under the scheme, Electoral Bonds of any denomination of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore can be purchased from specified branches of SBI.
The tenure of electoral bonds is only 15 days, during which it can be used only for donations to political parties registered under the Representation of the People Act. Donations can be made through electoral bonds only to those political parties that have secured at least 1% of the votes polled in the last general election for the Lok Sabha or the Legislative Assembly.
Under the scheme, electoral bonds are made available for purchase for a period of 10 days in the months of January, April, July, and October. These may also be issued during an additional period of 30 days notified by the Central Government in the year of Lok Sabha elections.
How do electoral bonds work?
It is quite easy to use electoral bonds. These bonds are offered in multiples of Rs 1,000 such as ₹ 1,000, ₹ 10,000, ₹ 100,000 and can be in the range of ₹ 1 crore.
You get these at some branches of SBI. Any donor having a KYC-compliant account can purchase such bonds, and can later donate them to any political party. After this, the receiver can convert it into cash. The party’s verified account is used to encash it. Electoral bonds also remain valid only for 15 days.
Who gets electoral bonds?
All the political parties in the country get this bond, but the condition for this is that that party should have got at least 1% or more votes in the last general election. Such a registered party will be entitled to receive donations through electoral bonds. According to the government, ‘Black money will be curbed through electoral bonds and accounts of the amount given as donations in elections can be maintained. The central government said in its counter affidavit that the electoral bond scheme is transparent.
When and why were Electoral Bonds started?
In 2017, the Central Government introduced the Electoral Bond Scheme in the Parliament through the Finance Bill. After being passed by the Parliament, the notification of the Electoral Bond Scheme was issued on 29 January 2018. The main reason behind the issuance of the Electoral Bond scheme is that it helps Political parties receive donations.
How far did the matter reach the Supreme Court?
The case was heard by a five-member Constitution bench headed by Chief Justice of India DY Chandrachud. It includes Justice Sanjeev Khanna, Justice BR Gavai, Justice JB Pardiwala, and Justice Manoj Mishra along with the CJI. The Constitution Bench heard the arguments given by both the parties and the opposition from October 31 to November 2. After three days of hearing, the court reserved its decision on November 2.
What is the controversy over electoral bonds?
Several individuals and organizations, such as Congress leader Jaya Thakur, the Marxist Communist Party, and the NGO Association for Democratic Reforms (ADR), have raised concerns about electoral bonds in India. They argue that the system of secret funding through electoral bonds undermines transparency in political financing. According to data from the Association for Democratic Reforms (ADR), political parties received significant amounts through electoral bonds, with the ruling party receiving a large share. Critics contend that this lack of transparency allows for potential misuse of funds and raises questions about the integrity of the electoral process. The controversy surrounding electoral bonds highlights the ongoing debate over the balance between transparency and political funding in India.
Which party received how much donation?
According to reports, Rs 13,000 crore has been transferred to several political parties between March 2018 and July 2023. , The report said electoral bonds worth Rs 9,208 crore were sold between 2018 and 2022 and the BJP received 58 percent of the total money.
Data released by the Election Commission in January 2023 revealed that four national political parties – BJP, Trinamool Congress, Congress, and Nationalist Congress Party – collected 55.09 percent of their total income i.e. Rs 1811.94 crore through electoral bonds in 2021-22. BJP received the lion’s share of donations through electoral bonds in 2021- 22, followed by Trinamool Congress (TMC) and Congress.
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