Before the announcement of Lok Sabha elections, the Supreme Court has given a big decision regarding electoral bonds. SC has declared electoral bonds illegal and has banned the purchase of new bonds. The court has said that electoral bonds are a violation of the right to information. Voters have the right to know about the funding of parties.
Before the announcement of Lok Sabha elections, the Supreme Court has given a big decision regarding electoral bonds. The SC has declared the electoral bond scheme illegal and banned it. The court has said that electoral bonds are a violation of the right to information. Voters have the right to know about the funding of parties. The court has ordered that the list of bond buyers be made public.
The Supreme Court has said that citizens have the right to know where the government’s money comes from and where it goes. The court held that anonymous electoral bonds are a violation of the Right to Information and Article 19(1)(A). While giving the verdict, CJI said that apart from electoral bonds, there are other ways to stop black money. The court said that the secrecy of electoral bonds is against the ‘right to know’. Having information about the funding of political parties provides clarity to people in exercising their franchise.
SBI will share information with the Election Commission
While giving the verdict, CJI said that not disclosing information about funding of political parties is contrary to the purpose. SBI will have to make public the information from April 12, 2019 till now. SBI will have to give this information to the Election Commission. EC will share this information. SBI will have to provide this information within three weeks.
There was a condition in the rule to get one percent votes
The scheme was notified by the government on January 2, 2018. According to this, electoral bonds could be purchased by any citizen of India or any entity established in the country. Any person could purchase electoral bonds either singly or jointly with other persons. Political parties registered under Section 29A of the Representation of the People Act 1951 were eligible to accept electoral bonds. The only condition was that he should have got at least one percent votes in the last Lok Sabha or Assembly elections. Electoral bonds were encashed by an eligible political party only through its account with an authorized bank. It was mandatory for the concerned party to deposit the bonds in their registered bank account within a fortnight of purchasing them. If the party fails in this then the bond becomes null and void i.e. canceled.
What are electoral bonds?
This bond was launched in the year 2018. The idea behind implementing this was that it would increase transparency in political funding and bring in clean money. In this, individuals, corporates and institutions used to buy bonds and give them as donations to political parties and political parties used to get the money by encashing these bonds in the bank. 29 branches of State Bank of India were authorized to issue and encash electoral bonds. These branches were in New Delhi, Mumbai, Kolkata, Chennai, Gandhinagar, Chandigarh, Patna, Ranchi, Guwahati, Bhopal, Jaipur and Bengaluru.
Why was the electoral bond issued?
To improve the election funding system, the government had launched Electoral Bond in the year 2018. On January 2, 2018, the then Modi government had notified the Electoral Bond Scheme. Electoral bonds were brought under the Finance Act 2017. These bonds were issued four times a year in January, April, July and October. For this, the customer could buy it by visiting the bank’s branch or online on its website.
What was the merit of electoral bond?
Any donor, hiding his identity, could purchase electoral bonds worth up to Rs 1 crore from State Bank of India and donate them to the political party of his choice. This system does not reveal the identity of the donors and is also exempt from tax. Only a political party that gets at least 1 percent votes in the general elections could receive donations from this bond.
Is there transparency in funding?
The central government had launched this bond with the claim that it would increase transparency in political funding and bring in clean money. Finance Minister Arun Jaitley had written in January 2018, ‘The scheme of electoral bonds was brought to bring ‘clean’ money in the system of political funding and increase ‘transparency’.
How do these bonds work?
An individual, group of people or a corporate could purchase electoral bonds from designated branches of SBI within 10 days of the month of bond issue. The bonds were issued in multiples of Rs 1000, Rs 10000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore, with a validity of 15 days from the date of issue. These bonds could not be purchased in cash and the buyer had to submit a KYC (Know Your Customer) form to the bank.
Money was credited to account upon redemption
Political parties can encash the bonds through their accounts in SBI. That is, the party to whom the customer gave this bond as donation could encash it by depositing it in his designated account of SBI. Cash payment was not made to the party under any circumstances and the money was transferred to its designated account only.
KYC norms are followed
The Aadhaar and account details of the people who donated money to political parties were available through electoral bonds. Contribution to electoral bonds was made only through ‘cheque payable to a bank account or electronic clearing system from a bank account’. While issuing the notification of electoral bonds in January 2018, the government had also made it clear that the person purchasing it will have to completely fulfill the Know Your Customers (KYC) norms and make the payment through a bank account.
