Significance of Model Code of Conduct
It is a set of guidelines issued by the Election Commission to regulate political parties and candidates prior to elections, to ensure free and fair elections. ... Read more
Supreme Court Ruling on Electoral Bonds
What are Electoral Bonds?
1. It is a bearer instrument like a Promissory Note that is payable to the bearer on demand and free of interest. The government had notified the electoral bond scheme on 2nd January 2018.
2. It was introduced after changes in the Finance Act 2017 as well as related amendments in the Income Tax Act, the Reserve Bank of India Act, and the Representation of People Act.
3. The bonds will be issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore and will be available at specified branches of State Bank of India.
4. The anonymity provided to the donor and the recipient political party raised concerns among campaigners over transparency in funding.
Who can buy and receive Electoral Bonds?
1. According to provisions of the scheme, a person, who is a citizen of India or company incorporated or established in India, may purchase electoral bonds.
2. A person being an individual can buy electoral bonds, either singly or jointly with other individuals.
3. Only political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than one percent of votes polled in the last general election to the House of the People or the Legislative Assembly of the State shall be eligible to receive electoral bonds.
Why is it in the news?
1. The Supreme Court recently ordered all political parties to disclose to the Election Commission of India the details of every donation they receive through electoral bonds till 15 May 2019.
2. But the court, passing an interim order because of the shortage of time, refused a stay on the bond scheme that had been sought by the not-for-profit Association for Democratic Reforms (ADR).
3. The Election Commission had also stated that it would support the electoral bond scheme only if the donor’s name is revealed.
4. Now, all political parties have to furnish all details of all donations they receive, including amounts, names, and bank details of the donors, in a sealed envelope to the poll panel by 31st May.
How the Election Commission and the Government view it?
1. The government has justified the bonds, saying it will promote transparency in political funding.
2. According to the Election commission, the changes made in the law would have serious repercussions, making election funding opaque, and, further, making Indian elections vulnerable to foreign interference.
Where are the loopholes?
1. Detailed provisions of the scheme as well as amendments to existing laws to put the scheme into operation, will make the electoral process almost completely opaque.
2. It will also legalize the unchecked flow of money to political parties from all kinds of sources without anyone, except the State Bank of India, knowing who has given how much money to which party.