In the Union Budget 2017, Electoral Bonds were introduced as a way of funding for political parties. What are electoral bonds and why were they introduced? Why have these bonds been subject of much criticism?
- Introduction should explain the meaning of Electoral Bonds.
- Explain the rationale behind their introduction i.e., to prevent black money entering political process.
- Bring out how these bonds fail to address some key aspects of political funding transparency
- Conclude appropriately
Electoral bonds are essentially like bearer cheques. Those wishing to donate to a political party can buy these bonds by making payments digitally or through cheque, and gift them to political parties. The political party can convert these bonds back into money. The finance minister said the bonds will encourage cleaner funding in politics.
Aimed at curbing black money in political funding:
- Today, most political parties accept cash donations from anonymous sources. They are only required to report any donation of over Rs. 20,000 to the IT department. But there has been a trend of more donations flowing by way of hard cash in smaller amounts.
- Electoral bonds will prompt donors to take the banking route to donate. With the introduction of electoral bonds, the upper limit on anonymous cash donations has been reduced from Rs. 20,000 to Rs. 2,000. The introduction of these bonds is aimed at reducing the flow of black money to political parties in the name of cash donations.
- Transparency in funding further reduced: The identity of the donor is not revealed to the party or public. The political parties would no longer need to reveal the donor’s name even for contributions above Rs. 20,000, provided these are in the form of electoral bonds. This adds more opacity to political funding.
- Favours ruling party: There are fears that the ruling party may access opposition parties’ donor information from banks. The Opposition parties may then struggle to raise adequate funds. Electoral bonds thus fail the level-playing field test.
- However, the government said that banking confidentiality laws protect the information.
- It may be worthwhile to study alternate methods to clean up political funding. One way as suggested by the former Chief Election Commissioner S.Y. Quraishi is the setting up of a National Electoral Fund to which all donors can contribute. The funds would be allocated to political parties in proportion to the votes they get. Not only would this protect the identity of donors, it would also weed out black money from political funding.
Subjects : Current Affairs