Daily Current Affairs : 11-October-2023
In recent news, the Supreme Court has announced its decision to hear petitions challenging the electoral bonds scheme, a financial mechanism introduced in the 2017 Union Budget. This scheme allows individuals and entities to donate money anonymously to political parties through interest-free bearer instruments called electoral bonds. However, this seemingly straightforward initiative has faced significant legal challenges and criticisms, raising questions about its transparency, funding limits, potential government influence, and its actual benefit to the common man.
Exploring the Electoral Bonds Scheme
- How do Electoral Bonds Work?
- Electoral bonds are bearer instruments available in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore.
- Donors purchase these bonds from authorized branches of the State Bank of India (SBI) through digital transactions or checks.
- Political parties receive these bonds and can encash them within 15 days, utilizing the funds for their electoral expenses.
- Notably, there is no cap on the number of bonds an individual or company can buy.
Challenges to the Electoral Bonds Scheme
- Lack of Transparency
- Critics argue that the scheme lacks transparency, as the anonymity of donors makes the funding process obscure.
- The initial goal of bringing transparency to political funding appears unmet due to this opacity.
- Unlimited Funding and Corporate Influence
- Before the scheme, there was a cap on corporate donations. However, the removal of this limit through amendments to the Companies Act 2013 has opened the door to unlimited corporate funding.
- This move has raised concerns about private corporate interests superseding the needs and rights of the general public in policy considerations.
- Government Influence and Potential Abuse
- The fact that electoral bonds are sold through a government-owned bank raises concerns about the government’s ability to track opposition party funding.
- Critics fear that this knowledge could lead to extortion or victimization of corporations, providing an unfair advantage to the ruling party.
- Lack of Benefit to the Common Man
- Despite the scheme’s intention to allow common people to fund political parties, data shows that a vast majority of bonds purchased are of the highest denomination, Rs 1 crore, indicating limited participation from ordinary citizens.
Important Points:
- Electoral Bonds Scheme Overview:
- Introduced in the 2017 Union Budget.
- Interest-free bearer instruments for anonymous political party donations.
- Denominations: Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore.
- Purchased from authorized branches of the State Bank of India (SBI) via digital transactions or checks.
- Political parties can encash bonds within 15 days for electoral expenses; no limit on purchase quantity.
- Challenges and Concerns:
- Lack of Transparency:
- Donor anonymity makes the funding process obscure.
- Transparency goal not achieved due to this opacity.
- Unlimited Funding and Corporate Influence:
- Removal of donation cap through amendments to the Companies Act 2013 allows unlimited corporate funding.
- Raises concerns about corporate interests overshadowing public needs in policy considerations.
- Government Influence and Potential Abuse:
- Electoral bonds sold through government-owned SBI raises concerns.
- Government’s ability to track opposition party funding could lead to extortion or victimization of corporations, favoring the ruling party.
- Limited Benefit to the Common Man:
- Intended to allow common people to fund political parties.
- Data shows majority of bonds purchased are of the highest denomination (Rs 1 crore), indicating limited participation from ordinary citizens.
- Lack of Transparency:
- Supreme Court Involvement:
- Supreme Court hears petitions challenging the electoral bonds scheme.
- Decision could impact the future of political funding in India.
Why In News
The Supreme Court announced its decision to hear petitions challenging the electoral bonds scheme, signaling a significant step towards addressing concerns about transparency and political funding in the country. This pivotal move highlights the Court’s commitment to upholding democratic principles and ensuring accountability within the electoral process, providing a ray of hope for citizens advocating for greater transparency in political financing.
MCQs about India’s Electoral Bonds Scheme Under Scrutiny
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What is the primary purpose of the Electoral Bonds Scheme in India?
A. To provide interest-free loans to political parties.
B. To allow anonymous donations to political parties.
C. To offer tax deductions for corporate contributions.
D. To fund government infrastructure projects.
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What is the major concern raised about the transparency of the Electoral Bonds Scheme?
A. Limited participation from ordinary citizens.
B. Donor anonymity making the funding process obscure.
C. Political parties encashing bonds within 15 days.
D. The removal of donation cap for corporate contributions.
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How can electoral bonds be purchased under the Electoral Bonds Scheme?
A. Only through cash transactions.
B. Only through digital transactions or checks from authorized SBI branches.
C. Only through credit card payments.
D. Only through direct transfers from foreign banks.
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What has the removal of the donation cap in the Companies Act 2013 led to under the Electoral Bonds Scheme?
A. Limited corporate funding for political parties.
B. Strict government regulations on corporate contributions.
C. Unlimited corporate funding for political parties.
D. Increased transparency in political funding.
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