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In 2017’s Union Budget, the government announced the electoral bonds which are considered as the interest-free banking instrument that can be purchased by a person. The bond will be issued from 1000 to 1 crore rupees. On 2nd January 2018, the Indian government introduced an electoral bond scheme. In India, the State Bank Of India has the only authority to issue such bonds. However, the bond has 15 days of its shelf-life from the date of issue. As per the statement, no payment can be made after the expiry date gets over, especially to any payee of the political party.
Introduction of Electoral Bonds in India
Electoral bonds are considered as a certain amount of money that can be owned by an individual to donate the money to a registered political party of his or her choice. The amount starts from 1000 Indian rupees to 1 crore rupees. If a person collects an electoral bond of any amount and donates the money to a political party, the electoral bond will be valid for the next 15 days. Last January, SBI sold electoral bonds worth 1.213 crores. A person can donate by buying electoral bonds by him or jointly with other individuals. The donor’s name will not be mentioned on the bond.
Features and Process-related with Electoral Bond Scheme
The interest in buying electoral bonds is increasing day by day. This process needs to follow some steps for a successful transaction. First, it is important to choose a bank that can have an electoral bond scheme. In the next step, it is important for the individual or the group of individuals to notify the bank. In the third step, the person or group of individuals need to buy the bond by using a cheque or by digital payment. The bank provides a timeframe for the bond and hands it over to the buyer. Then the buyer can give the bond to his or her choosable political party.
The main feature of the electoral bond is to give a donation to the choosable registered political party for the sake of societal betterment.
Benefits and Challenges related to Electoral Bond
The electoral bond scheme has both some benefits and some challenges that can be both beneficial or detrimental for the financial structure of the political parties and the economy of the country. The benefit of using electoral bonds is it is interest-free and the starting amount is not very expensive. In the donation cheque, there is no name mentioned of the doner which can be beneficial for maintaining the confidentiality of an individual. Commoners are buying the electoral bonds for the sake of societal development.
On the other hand, the State Bank of India where the encashment can be done stated that the 29 authorized branches faced some issues during the process of encashment on 1st July 2021 to 10th July 2021. Another challenge that can be faced by the political parties is the validity of the bond is 15 days and they have to liquidate the cash within the time. Otherwise, the parties will be unable to claim the bond.
The Stance of the Supreme Court on EB
The apprehension that foreign corporate houses may buy the bonds and the bonds can influence the electoral process in the country. However, this idea becomes misconceived. Under the clause of the number 3 scheme, the bond can be purchased by one individual or the individuals who are citizens of India only. Thus, it cannot be applicable for individuals who belong to other countries. Even if they want to donate a certain amount of money, it can not be possible for the branches of SBI to sanction the electoral bond for them.
Connection of RBI and EB Scheme
The electoral bond scheme is strongly opposed by the transparency activists because according to the Finance Act of 2017, the political parties should maintain confidentiality about the total amount of electoral bonds they are getting and the total number of money. It can help in securing information about the individuals or the company. The voters will not know which individual or which company supports which political parties. However, if an individual or a company donates more than 20,000 rupees to a political party, the political party has to disclose detailed information about the individual or the company to the government.
Required Reformation with Relation to “Indian Electoral Funding”
The challenges that can be faced by the electoral bonds can be mitigated by changing some of the processes. The efficiency of Indian electoral funding by electoral bonds can increase by reforming the cash donation process, by increasing the intensive scrutiny process, increasing the expenditure limit, by doing simultaneous elections, incorporating with national electoral funds, and state funding of election.
Conclusion
The electoral bond scheme is a process where an individual can donate a certain amount of money to a registered political party for societal betterment. However, the individual needs to be a citizen of India for claiming the electoral bond scheme.
