[Answered] In your opinion, has the electoral bonds scheme been able to ensure transparency and integrity of the electoral process?

Electoral bonds are interest-free bearer instruments (like Promissory Notes) that are available for purchase from the State Bank of India within a designated window of 10 days in every quarter of the financial year. The general public can also issue these bonds to fund eligible political parties. For this, political parties eligible to run campaigns must register in the Representation of the People Act, 1951, under Section 29A.

How it is useful?

• Cutting black money: Payments made for the issuance of the electoral bonds are accepted only by means of a demand draft, cheque or through the Electronic Clearing System or direct debit to the buyers’ account. Buyers of these bonds must comply with KYC requirements, and the beneficiary political party has to disclose the receipt of this money.
• Eliminating fraudulent political parties: The parties which are formed on pretext of tax evasion, as there is a stringent clause of eligibility for the political parties.
• Protects donors from political victimization: It provides non-disclosure of the identity of the donor. Further, the records of the purchaser are always available in the banking channel and may be retrieved as and when required by enforcement agencies.

Concerns:

• Favouring Ruling Party: While a donor’s identity is hidden from the public view, it is possible for the ruling party to know since these bonds are issued by a government-owned bank (SBI). This advantage allows the government to either extort money or victimise those individuals/ entities that fund the Opposition.
• Anonymity: Through an amendment to the Finance Act 2017, the Union government has exempted political parties from disclosing donations received through electoral bonds.
• No cap on corporate funding: The government had removed the cap on how much money a company could donate. A quick closure in these matters is critical to the integrity of the electoral process.
• Transparency: The concerns have been raised about anonymous donations which challenge the very core of our democratic functioning.

Way forward:

• An alternative to electoral bonds is a National Electoral Fund to which all donors can contribute. The funds can be allocated to political parties in proportion to the votes they get.
• The issue of electoral bonds can be rectified easily if the political parties wish to improve transparency.
• There is need to educate the Voters through awareness campaigns especially about the ill-effects of money power during elections.