Election Commission publishes the data on poll bonds received from SBI
Context:
Recently, the Supreme Court of India had scrapped the electoral bonds scheme, stating it “unconstitutional”. Moreover, it had asked the SBI to submit to the EC all details of the bonds which had been purchased since the interim order of the court was issued.
- However, SBI seeking an extension, disclosed the data on the electoral bonds
Relevance:
GS-02 (Polity)
Electoral Bonds:
- The electoral bonds system was established in 2017 via a Finance bill which became operational in 2018.
- It’s a mechanism where individuals and entities contribute funds to registered political parties while safeguarding the anonymity of the donor.
Key Features:
- It is issued by the State Bank of India (SBI) in denominations ranging from Rs 1,000 to Rs 1 crore.
- It is Interest-free and payable to the bearer on demand.
- Available for purchase by Indian citizens or entities domiciled in India, either individually or jointly.
- Validity period of 15 calendar days from the date of issue.
- SBI exclusively serves as the authorized issuer, distributing electoral bonds through designated branches.
Eligibility Criteria for Political Parties:
- Only political parties registered under Section 29A of the Representation of the People Act, 1951, and securing at least 1% of the votes polled in the preceding general election to the House of the People or the Legislative Assembly, qualify to receive electoral bonds.
Purchase and Redemption Process:
- Electoral Bonds can be acquired digitally or through cheque payments.
- Redemption is permissible solely through the political party’s authorized bank account.
Transparency and Accountability Measures:
- Political parties are mandated to disclose their bank accounts to the Election Commission of India (ECI).
- Donations are routed through formal banking channels, ensuring transparency in the contribution process.
- Parties are obligated to elucidate the utilization of funds received from electoral bonds.
Benefits:
- Promotes transparency in political party funding by facilitating disclosure.
- Enhances accountability by necessitating explanations regarding the allocation of donated funds.
- Discourages cash transactions, fostering a more transparent financial ecosystem.
- Safeguards the anonymity of donors, encouraging wider participation in the democratic process.
Reasons behind invalidation of Electoral Bonds Scheme?
- The Supreme Court’s decision to strike down the Electoral Bonds Scheme stemmed from various concerns raised during the legal proceedings.
- The Court highlighted the violation of the right to information, emphasizing that the scheme’s allowance for anonymous political donations encroached upon the fundamental right to information enshrined in Article 19(1)(a) of the Constitution.
- It noted that the scheme was not proportionally justified to curb black money, as it did not adopt the least restrictive methods to achieve its objective, as mandated by the proportionality test.
- Furthermore, the Court raised issues regarding the right to donor privacy, asserting that the right to privacy of political affiliation does not extend to contributions made with the intent to influence policies.
- The Court also found fault with the provision in the Companies Act, 2013, permitting unlimited political contributions by companies, deeming it manifestly arbitrary.
