Clean It Up More

Source: The post is based on an article “Clean It Up More” published in The Times of India on 19^th October 2022.

Syllabus: GS 2 – Governance

Relevance: problems associated with electoral bonds

News: There are lots of money spent in fighting elections. Political parties often receive funding for elections from different sources.

These sources of funds are mostly anonymous therefore an effort was needed to make the system transparent. This led to the introduction of electoral bonds.

What are electoral bonds?

Electoral bonds were introduced in 2018. It set a limit of Rs 2000 for anonymous cash donations.

Further, electoral bonds in denominations ranging from Rs 1,000 to Rs 1 crore can be issued by the State Bank of India to an Indian citizen.

They can further use these bonds in donating the amount to any political party of their choice. More than Rs 10,000 crore worth of bonds have been issued till 2022.

Moreover, as per Solicitor General electoral bonds are the transparent mode of political funding. Therefore, it is impossible for political parties to convert these bonds into black money.

However, the claim of the Solicitor General cannot be relied and there are problems associated with the electoral bonds.

What are the problems with the electoral bonds?

First, these bonds do not improve transparency as the name of the donor is hidden from the public and other political parties.

Second, according to the Association for Democratic Reform, over 90% of the amounts issued are in the Rs 1 crore slab. This amount must have come from the very rich individuals or corporations which is also a concern.

Third, public cannot judge whether these donations were made out of goodwill or there were ill- intentions involved.

Fourth, the Election Commission had also objected to the bonds.

Fifth, these bonds are issued by the public sector bank. Therefore, there are chances that the incumbent government can get the details of the donors donating to the non-incumbent parties which may create problem for the donors.

Moreover, another problem with the electoral bonds is that it provides advantages to incumbent governments/party and the money obtained from electoral bonds is considered white money as it is legal.

How do electoral bonds provide advantages to incumbent parties?

First, those parties using unaccounted cash could come under investigation which will allow the governing party to easily label them corrupt.

Second, the incumbent could use its white money to influence the voters and spend in the campaigns whereas non-incumbent parties may face scrutiny under the investigation agencies for using black money for the campaigns.

Third, elections today are fought on the digital media (Facebook, WhatsApp, etc.) using digital campaigns. These social media need white money which provides advantage to the incumbent party.

Fourth, the incumbent parties generally receive more donation due to their popularity or power.

Therefore, the problem with electoral bonds is they make clean payments easier for the incumbent and hard for others. So, there is a need to ensure a level-playing field for non-incumbent parties.