In the wake of impending elections in several states, the Central government has introduced amendments to the Electoral Bond Scheme. This move is significant as electoral bonds are regarded as instruments for political funding, aimed at fostering transparency in India’s political election finances. Introduced in 2018, the scheme has faced criticisms and raised concerns which will be discussed herein.
About Electoral Bonds and its Scheme
Electoral bonds are akin to promissory notes that can be purchased by companies and individuals in India from the State Bank of India (SBI). These bonds are then given to a political party which can cash them. The bonds, only redeemable in the specific account of a registered political party, can be purchased individually or jointly with other individuals.
The Electoral Bond Scheme was launched with the objective of cleansing political funding in India. Considered an “electoral reform,” the scheme was seen as a step towards enhancing transparency in electoral funding, aligning with the country’s shift towards a “cashless-digital economy.”
The Amendments to the Electoral Bond Scheme
Several amendments have been introduced to the scheme. A new paragraph stipulates an additional period of 15 days, specified by the Central Government, during a general election year to the Legislative Assembly of States and Union territories with Legislature.
When first introduced in 2018, these bonds were available for 10 days each in January, April, July, and October, as specified by the central government. An extra period of 30 days was to be specified during a General election year for the House of People.
Further stipulations include that Electoral Bonds shall be valid for fifteen calendar days from the date of issue with no payment made to any political party if deposited after expiry. Eligibility for receiving the bonds is restricted to political parties registered under Section 29A of the Representation of the People Act, 1951, having secured at least 1% of votes polled in the last General Election.
Concerns Associated with Electoral Bonds
While the scheme was designed to enhance transparency, critics argue it does precisely the opposite. The anonymity offered by electoral bonds is mainly for the public and opposition parties.
The sale of bonds through a government-owned bank potentially lets the government know who is funding its opponents, facilitating possible extortion or victimization. This scenario could provide an unfair advantage to the ruling party.
In addition, political parties have been exempted from revealing donations received through electoral bonds due to an amendment to the Finance Act 2017. Consequently, voters cannot ascertain who has funded which party and to what extent. This lack of transparency can be seen as undermining democracy and the citizens’ right to know, compromising fair elections.
The fact that anonymity doesn’t extend to the government raises concerns about misuse of voter information for disrupting free and fair elections. Also, the scheme permits corporations to fund elections without limits, potentially steering toward crony capitalism.
Way Forward: Need for Regulation and Reform
To prevent corruption and erosion of democracy, effective regulation of political financing along with bold reforms is necessary. It’s vital to fix the gaps in existing laws to make the entire governance machinery more transparent and accountable. Additionally, voters can play a significant role in bringing changes by demanding awareness campaigns and rejecting candidates or parties that overspend or offer bribes.
