Electoral bonds worth ₹1,213 crore were sold by the State Bank of India (SBI) in January, with most of them (₹784.84 crore) being encashed in the New Delhi branch, pointing towards national parties, while the Mumbai branch sold the most (₹489.6 crore worth), according to a Right to Information.
GS-II: Polity and Governance (Governance and Government Policies)
Dimensions of the Article:
- What are Electoral Bonds?
- Points in the Plea against the Electoral Bonds scheme
- Government’s response defending the Electoral Bonds scheme
What are Electoral Bonds?
- An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
- The citizen or corporate can then donate the same to any eligible political party of his/her choice.
- The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest.
- An individual or party will be allowed to purchase these bonds digitally or through cheque.
Points in the Plea against the Electoral Bonds scheme
- The Reserve Bank of India (RBI) and the Election Commission had both said the sale of electoral bonds had become an avenue for shell corporations and entities to park illicit money and even proceeds of bribes with political parties.
- Data obtained through RTI has shown that illegal sale windows have been opened in the past to benefit certain political parties. There is a serious apprehension that any further sale of electoral bonds before the upcoming State elections in West Bengal, Tamil Nadu, Kerala and Assam would further increase illegal and illicit funding of political parties through shell companies.
- The plea said that the Electoral Bonds scheme “opened doors to unlimited political donations, even from foreign companies, thereby legitimising electoral corruption at a huge scale, while at the same time ensuring complete non-transparency in political funding”.
Government’s response defending the Electoral Bonds scheme
- The Government said that the Electoral Bond Scheme allowed anonymity to political donors to protect them from “political victimisation”. The earlier system of cash donations had raised a “concern among the donors that, with their identity revealed, there would be competitive pressure from different political parties receiving donation”.
- The Ministry of Finance’s affidavit in the top court had dismissed the Election Commission’s version that the invisibility afforded to benefactors was a “retrogade step” and would wreck transparency in political funding.