ELECTORAL BONDS

 

 ELECTORAL BONDS - A mode of funding for political parties in INDIA , in this mode the transparency was lagged behind as the name of donar and party was hidden .

INTRODUCTION OF THESE ELECTORAL BONDS 

The scheme was introduces in The Finance Bill , 2017 - 18 during the UNION BUDGET by then Finance Minister Arun Jaitely . They were classified as a money bill , and thus bypassed certain parliamentry scrutiny processes, in what was alleged to be a violation of Article 110 of Indian Constitution .  

Althoug introduced in early 2017, the Department of Economic Affairs in Ministry of Finance n otifies the Electoral Bond Scheme 2018 in a Gazette only on 2 January 2018 .

According to an estimate, a total of 18,299 electoral bonds equivalent to a monetary value of rupees 9,875 crore , were successfully transacted during the period spanning from March 2018 to April 2022 . 

➡ In 2019 general elections , Congress announced its intention to eliminate electoral bonds , if the party came in to power .

➡ The Communist Party Of India ( Marxist ) has also opposed this scheme and was the sole national party to refuse donations through Electoral Bonds . 

WHAT IS HAPPENING....? 

On 15 February 2024 , a five - judge bench of the Supreme Court Of India , headed by Chief Justice DY Chandrachud , unanimously struck down the electoral bonds scheme, as well as amendments to the Representations of People Act, Comanies Act and Income Tax Act , as unconstitutional . They found it  " violate of RTI ( Right to Information ) " and of voters' right to informatin about political funding under Article 19 (1) (a) of the Constitution . 

The State Bank Of India was asked to hand over details of donors and recipients to the Election Commision of India by march 6 , and the ECI was to publish this online by march 13 on their website . 

DATA RELEASED BY THE ECI 

This data was subsequently released by the ECI on their website on March 15, 2024. It includes the details of all bonds encashed between April 12, 2019, and January 24, 2024. On 17th March 2024, the Election Commission unveiled data received directly from political parties and is believed to be from the period before 12th April, 2019.

The data released by the ECI showed that the biggest donor was Future Gaming and Hotels Pvt Ltd run by Mr Santiago Martin. This lottery company purchased bonds worth Rs 1,300 crore during the period 2019–2024. Of these, bonds worth Rs 100 crore were purchased seven days after a raid by India's Enforcement Directorate over charges of money laundering. The second and fifth biggest donors - Megha Engineering and Infrastructures Ltd and Vedanta Limited - also faced probes by law enforcement agencies during the period. Meanwhile, the third biggest donor - Qwik Supply Chain - was accused of being a subsidiary of Reliance Industries, a charge Reliance denied.

Political Party with Amount Encashed 2019 onwards - 

1 BHARTIYA JANTA PARTY =  ₹60,60,51,11,000.00

2 ALL INDIA TRINAMOOL CONGRES =  ₹16,09,53,14,000.00

3 PRESIDENT, ALL INDIA CONGRESS COMMITTEE =  ₹14,21,86,55,000.00

4 BHARAT RASHTRA SAMITHI =  ₹12,14,70,99,000.00

5 BIJU JANATA DAL = ₹7,75,50,00,000.00

6 DMK PARTY IN PARLIAMENT = ₹6,39,00,00,000.00

7 YSR CONGRESS PARTY (YUVAJANA SRAMIKA R =  ₹3,37,00,00,000.00

8 TELUGU DESAM PARTY =  ₹2,18,88,00,000.00

9 SHIVSENA (POLITICAL PARTY) = ₹1,58,38,14,000.00

10 RASTRIYA JANTA DAL = ₹72,50,00,000.00

11 AAM AADMI PARTY =  ₹65,45,00,000.00

12 JANATA DAL ( SECULAR ) = ₹43,50,00,000.00

13 SIKKIM KRANTIKARI MORCHA = ₹36,50,00,000.00

14 NATIONALIST CONGRESS PARTY = ₹30,50,00,000.00

15 JANASENA PARTY =  ₹21,00,00,000.00

16 ADYAKSHA SAMAJVADI PARTY = ₹14,05,00,000.00

17 BIHAR PRADESH JANTA DAL(UNITED) =  ₹14,00,00,000.00

18 JHARKHAND MUKTI MORCHA =  ₹13,50,00,000.00

19 SHIROMANI AKALI DAL =   ₹7,26,00,000.00

20 ALL INDIA ANNA DRAVIDA MUNNETRA KAZHAGAM =  ₹6,05,00,000.00

21 SIKKIM DEMOCRATIC FRONT = ₹5,50,00,000.00

22 RASHTRIYA JANTA DAL = ₹1,00,00,000.00

23 SHIVSENA =   ₹1,00,00,000.00

24 MAHARASHTRAWADI GOMNTAK PARTY = ₹55,00,000.00

25 NATIONALIST CONGRESS PARTY MAHARASHTRA PRADESH =  ₹50,00,000.00

26 JAMMU AND KASHMIR NATIONAL CONFERENCE = ₹50,00,000.00

27 GOA FORWARD PARTY = ₹35,00,000.00

CRITISCM 

All political parties have a tendency to possess a vested interest in maintaining the anonymity of fund origins due to the predominant presence of unreported funds. These parties not only tolerate the existence of illicit funds in the form of "black money" but also safeguard their sources and actively engage in their utilization. Regrettably, comprehensive documentation in regard to the allocation of these funds does not exist as it is not mandated by any of the existing laws. Consequently, electoral finances and expenditures emerge as the principal catalysts for corruption and the proliferation of unaccounted funds, hence the black money is widely prevalent in Indian politics.[50]

While the Modi-administration has taken steps to address the issue of political funding by imposing restrictions on cash donations and introducing "election bonds", some politicians and election officials believe that these measures will not have a significant impact. It is said that the upcoming elections will not be directly affected by these changes, but the government is likely to view them as an opportunity for Narendra Modi to enhance his reputation as a fighter against corruption. This comes after he announced several measures to address illegal wealth.

It is difficult to fully understand the financial aspects of politics in the world's largest democracy due to the lack of transparency in campaign financing. The introduction of Electoral Bonds has enabled companies to anonymously finance political parties without any limitations on the amount of donations. This development has been criticized by activists who argue that it grants corporations excessive influence and obfuscates the connections between politicians and business entities. The initial issuance of electoral bonds saw the BJP acquire approximately 95 percent of the total bonds, as per information obtained by Reuters through a Right to Information request and BJP submissions.

 

PURPOSE BECOMES ITS OPPOSITE -

 

The purpose of introducing the bonds was to expose illegal money and increase transparency in political funding. However, critics argue that it has had the opposite effect, as they claim the bonds are shrouded in secrecy. There exists an absence of publicly available documentation regarding the purchasers of individual bonds and the recipients of the corresponding donations. This lack of transparency renders the bonds susceptible to being deemed "unconstitutional and problematic," as it hinders taxpayers and citizens from obtaining knowledge about the origins of these contributions. Moreover, according to some critics, it is argued that the anonymity of the bonds is not absolute since SBI, the state-owned bank maintains a comprehensive record of both the benefactor and the beneficiary. Consequently, this enables the ruling government to effortlessly obtain pertinent information and potentially exploit it in order to exert influence over donors. This practice has been deemed as conferring an unjust advantage upon the ruling party and the government.

In 2017, upon the initial announcement of the bonds, the Election Commission of India expressed concerns regarding the potential compromise of electoral transparency[citation needed]. This apprehension was echoed by various entities including the central bank, the law ministry, and several Members of Parliament, who contended that the electoral bonds would not effectively deter the influx of illicit funds into the political sphere. Notably, the ECI later altered its stance and extended support to the electoral bonds after a year. Furthermore, the courts have postponed their verdict on the matter, thus leaving it unresolved. Those who oppose this scheme argue that the government has effectively enacted opacity through the implementation of electoral bonds.

There can be a possibility of shell companies' accounts to serve as a means to facilitate contributions for favorable political parties.[53] Opponents highlight that there exists a potential scenario wherein benefactors may procure bonds using funds acquired through legitimate means or subjected to taxation, and subsequently vend them to a third party utilizing illicitly obtained or undeclared funds for tax purposes. The third party may then transfer the bonds to a political organization.[52] A major issue with political financing in India is the anonymity of funding sources. Since the ₹2,000 limit still exist for donations in cash, there is an apprehension that political parties will hide a large portion of their illegal money in this category.

The potential consequences of a political party in possession of both Electoral Bonds funds and the Aadhaar and Jan Dhan account numbers of voters are significant. The party could potentially engage in a "Direct Benefit Transfer" of funds into the accounts of voters in advance of an election. The pathway from Electoral Bonds to Aadhaar and bank account numbers, or even just UPI numbers, presents a potential conduit for untraceable funds from anonymous sources to anonymous voters. This development could ultimately undermine the integrity of democratic elections, rendering them neither "free" nor "fair."

Retired Chief Election Commissioner V. S. Sampath said the Election Commission can't do much in situations where legislative modifications are tailored to accommodate the interests of corporate benefactors and political organizations that receive financial contributions from businesses including foreign entities.

TOP 10 REGIONAL PRATIES INCOME IN FY 2021 -22 FROM THESE BONDS - 

Party  - Total Income   - Unknown Sources   - % Unknown Sources 

Dravida Munnetra Kazhagam -  318.745 crore -   306.025 crore -   96%

Biju Janata Dal  - 307.288 crore  - 291.096 crore  - 95%

Bharat Rashtra Samithi  -  218.112 crore   - 153.037 crore   - 70%

YSR Congress Party  - 93.724 crore  - 60.0168 crore  - 64%

Janata Dal (United)  - 86.555 crore   -  48.3617 crore -  56%

Samajwadi Party -   61.011 crore -   3.66 crore  - 6%

Shiromani Akali Dal -   25.414 crore   -  12.1987 crore  - 48%

All India Anna Dravida Munnetra Kazhagam  - 25.263 crore -   nil  - 0%

Maharashtra Navnirman Sena   -  6.7683 crore  -  5.0762 crore   -  75%

Telugu Desam Party -   6.028 crore    -  3.667 crore  - 61%

Many evidences were provided to show that those companies who are giving large donations to political parties were constantly winning the government projects and were relaxed if there were any charges on them.

➡ Hoping that this information clear your doubts and inhance your knowledge 

THANK YOU !