Electoral bonds are a financial instrument introduced by the Government of India in 2018 as a way to make political funding more transparent and reduce the use of black money in political campaigns.
These are interest-free bearer bonds or money instruments that can be purchased by companies and individuals in India from authorized branches of the State Bank of India (SBI).
Electoral bond would be issued/purchased for any value, in multiples of 1,000; 10,000; 1,00,000; 10,00,000; and 1,00,00,000 (1 crore).
Here's how electoral bonds work:
Purchase: Any eligible person or entity, including individuals and companies, can buy electoral bonds from authorized bank SBI in India. These bonds are available in various denominations, and the identity of the donor is kept confidential.
Donation: The electoral bonds can then be donated to a registered political party. Only political parties that are registered under the Representation of the People Act, 1951, and have secured at least 1% of the votes in the most recent Lok Sabha or state legislative assembly elections are eligible to receive these bonds.
Redemption: Political parties can redeem these bonds through their designated bank accounts within a specified period. The proceeds from these bonds are transferred to the party's account, and the party can use the funds for various political activities, including election campaigns.
The key objectives of electoral bonds were to bring transparency to political funding by channeling contributions through the formal banking system, thereby reducing the use of cash and unaccounted money in politics.
However, they have been a subject of debate and controversy, with concerns raised about the anonymity of donors and the potential for corporate influence on political parties.
Objections faced by electoral bonds in SC: The five-judge constitutional bench that commenced hearings on October 31, heard several arguments against the constitutionality and legality of the Electoral Bond Scheme and the threat it poses to Indian democracy.
It has been argued in the court that the Electoral Bonds violate the citizen's fundamental right to information under Article 19 (1), about political parties by keeping the donors anonymous.
Apparently, there is circumstantial evidence to prove that there were kickbacks being paid by corporations via electoral bonds to political parties in power to get favors for the corporations, thus, promoting corruption.
An argument against the bond states "Electoral Bond" is a misnomer as the money can be used for any purpose after it is withdrawn since no one is asking how the parties spent the money.
More than 50 percent have been received only by the ruling party at the Centre and the rest have only been received by the ruling party in States. Not even 1 percent has been received by opposition parties. This destroys and disturbs democracy in the country.
According to the opposition, the electoral bonds scheme did not primarily aim to reduce black money but rather aimed to reroute non-anonymous funding from normal banking channels to anonymous Electoral Bonds.
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