Electoral Bonds : Benefits, Debates and Challenges for Electoral Bonds for APSC Mains
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APSC Mains Model Answers
Topic Wise APSC Mains Questions Answers
In this article we have provided you Topic Wise APSC Mains Questions Answers. So, read all these important Model Answers for APSC Mains exam preparation. These APSC Mains Model answers are extremely important and should be a part of your preparation.
APSC Mains Important Questions and Answers
The Electoral Bonds : Benefits, Debates and Challenges for Electoral Bonds is an very important topic for APSC Main exam. Therefore, aspirants are advised to understand the Electoral Bonds, including its benefits, challenges etc. Read this most important Apsc Mains Questions Answers in order to answer the questions :
Electoral Bonds : Benefits, Debates and Challenges for Electoral Bonds for APSC Mains
Electoral bonds are a form of anonymous donations to political parties that were introduced by the Finance Bill 2017 and notified on January 29, 2018. The scheme allows any individual or entity to purchase electoral bonds from SBI in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore and donate them to any registered political party. The name of the donor is kept confidential and the bonds are available for purchase by any citizen of India for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government - and an additional 30 days of sales in a Lok Sabha election year. The scheme was then amended in November 2022 to add another 15 days of sales in any Assembly election year.
The political parties have to create a specific account which is verified by the ECI to receive the electoral bonds. Only those parties that secured not less than 1% of votes polled in the last general election to the House of the People or the Legislative Assembly of the State are eligible to receive electoral bonds.
The Amendments done to bring the Electoral Bonds ::
The government brought in amendments to four Acts to introduce the Electoral Bond Scheme via the Finance Act of 2016 and 2017. These acts are
• Representation of the People Act, 1951, (RPA),
• the Companies Act, 2013,
• the Income Tax Act, 1961, and
• the Foreign Contributions Regulation Act, 2010 (FCRA), through the Finance Acts of 2016 and 2017.
Debate Around Electoral Bond Scheme ::
The purpose behind launching the ‘Electoral Bond’ was to ensure accountability and transparency since receiving political parties had to disclose their bank accounts with the ECI. At the same time, the identity of the buyer was kept confidential to remove any bias or influence on donors for political funding.
Some debates around the Electoral Bond scheme are as follows:
• While the ultimate objective was transparency in funding for political parties the anonymity of buyers was flagged by critics.
• It violated the Right to Information under Article 19(1) and conflicted with the RoPA 1951 (Representation of Peoples Act).
• Allowed unlimited political funding, as evident in official data released by ECI, reveals some of the country’s biggest companies as top funders over the last 5 years.
• It enabled backdoor lobbying and opened doors for shell companies to channel black money into political donations.
Benefits of Electoral Bonds ::
More Transparency: It helps the political parties to operate in a more transparent manner with the election commission, regulatory authorities and the general public at large.
Ensures Accountability: Donations through Electoral Bonds will only be credited in the party bank account disclosed with the ECI. As encashment of all the donations are through banking channels, every political party shall be obliged to explain how the entire sum of money received has been expended.
Discouraging Cash: The Purchase will be possible only through a limited number of notified banks and that too through cheque and digital payments. Cash will not be encouraged.
Regulatory Compliance: The Reserve Bank of India and the Election Commission of India regulate the scheme, ensuring compliance with legal and regulatory requirements, thereby enhancing the integrity of the electoral process.
Maintains Anonymity: The individuals, groups of individuals, NGOs, religious and other trusts are permitted to donate via electoral bonds without disclosing their details. Therefore, the identity of the donor is being preserved.
Encouragement of Legitimate Funding: By providing a legal and transparent mechanism for political donations, electoral bonds encourage legitimate sources of funding for political parties, reducing their reliance on illicit or questionable sources of financing.
Promotion of Democratic Process: This helps in promoting a more level playing field in elections by providing financial support to political parties across the spectrum, thereby strengthening the democratic process.
Challenges for Electoral Bonds ::
Hindering Right to Know: Voters will not know which individual, company, or organisation has funded which party, and to what extent. Before the introduction of electoral bonds, political parties had to disclose details of all its donors, who have donated more than Rs 20,000. The change infringes the citizen’s ‘Right to Know’ and makes the political class even more unaccountable.
Shallow Anonymity: Anonymity does not apply to the government of the day, which can always access the donor details by demanding the data from the State Bank of India (SBI). This implies that the only people in the dark about the source of these donations are the taxpayers.
Unauthorized Donations: In a situation where the contribution received through electoral bonds are not reported, on perusal of the contribution report of political parties, it cannot be ascertained whether the political party has taken any donation in violation of provision under Section 29B of the RPA, 1951 which prohibits the political parties from taking donations from government companies and foreign sources.
Leading to Crony-Capitalism: It could become a convenient channel for businesses to round-trip their cash parked in tax havens to political parties for a favour or advantage granted in return for something. Anonymous funding might lead to infusion of black money.
Loopholes: Corporate Entities may not enjoy the benefit of transparency as they might have to disclose the amount donated to the Registrar of Companies. Electoral bonds eliminate the 7.5% cap on company donations which means even loss making companies can make unlimited donations etc.
Limited Accountability: Parties disclose total electoral bond amounts, but lack of donor info hampers accountability and conflict tracking.
Lack of Public Confidence: Lack of transparency and accountability in electoral bonds erodes public trust in democracy.
Facts Related to Electoral Bond ::
Data shows 99.9% of all electoral bonds bought so far are worth Rs 10 lakh or 1 crore.
The bonds of Rs 1 crore are the most popular among all the electoral bond purchases so far.
Before the introduction of the Scheme, cash donations of over Rs 20,000 could not be anonymous.
The fact that donations through electoral bonds remain anonymous as well as tax exempt, and given most have been of high value, has raised concerns among experts.
The amendment to Section 29C of the Representation of the People Act has made it no longer mandatory for the parties to report the details of donations received through the bonds.
Through an amendment to the Finance Act 2017, the Union government has exempted political parties from disclosing donations received through electoral bonds.
In other words, they don’t have to disclose details of those contributing by way of electoral bonds in their contribution reports filed mandatorily with the Election Commission every year.
Conclusion ::
Introduction of Electoral Bonds shows the intention of the government to move towards transparency in political funding but the scheme hardly empowers anyone. The government’s rationale of maintaining anonymity is well understood but the amount of money received by political parties is important to be disclosed to voters to ensure free and fair democracy. Even the global evidence suggests much of the transparency and accountability in well-functioning democracies have come through strong records of disclosures and strict scrutiny of accounts of parties and candidates receiving funds.
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APSC Mains Answer Writing Practice Questions and Answers
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