Electoral bonds hit transparency in political funding, says Election Commission

Electoral bonds hit transparency in political funding, says Election Commission

1. The Election Commission of India has filed an affidavit in the Supreme Court. It said that the introduction of electoral bonds and the removal of the cap on corporate funding by the government will have a serious impact on the transparency of political funding.
2. EC has said that the amendment made to the Foreign Contribution Regulation Act,2010 allows parties to receive funding from foreign companies that own a majority stake in an Indian company. This is a shift from the existing law which barred receipt of donations from foreign sources. This would allow unchecked foreign funding of political parties and could lead to Indian policies being heavily influenced by foreign companies.
3. EC has also said that any donation received by a political party through an electoral bond has been taken out from the ambit of reporting under the contribution report as prescribed under section 29C of the Representation of the People Act, 1951.This amendment would lead to difficulty in ascertaining if the political parties received donations from government companies or foreign sources.
4. Earlier, petition has been filed in the Supreme Court which challenged the validity of the Electoral Bonds scheme on the grounds that (a)It keeps the identity of the donor absolutely confidential and (b)would enable corporate houses to anonymously donate their unaccounted cash to political parties. It is scheduled to be taken up by the Court on April 2.
5. However, Central government has told the Supreme Court that electoral bonds will promote transparency and accountability in funding and donations received by political parties in India.
6. Electoral bonds are bearer instrument in the nature of a promissory note and an interest-free banking instrument. A citizen of India or a body incorporated in India is eligible to purchase the bond. Electoral bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India.
7. Every party that is registered under section 29A of the Representation of the Peoples Act,1951(43 of 1951) and has secured at least one per cent of the votes polled in the most recent Lok Sabha or State election will be allotted a verified account by the Election Commission of India. Electoral bond transactions can be made only via this account. The bond have to be encashed within 15 days.