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Electoral Bond Scheme – Meaning, Features, Benefits: Greetings to all the aspirants who are preparing for the various competitive examinations like UPSC, SPSC, etc. Recently, you might have listened about the Electoral Bond Scheme in the news. And this topic is very much essential to be covered in subjects like Governance and Ethics, which plays an important role in all competitive exams. So, for the sake of all aspirants, we have written an article that covers all the details about the Electoral Bond Scheme. All the aspirants can go through this complete page to get more details on Electoral Bond Scheme. And for more updates on current events, you can follow our website @ freshersnow.com. Without being late, let us get into a detailed explanation of the Electoral Bond Scheme.
Electoral Bond Scheme – Why In News?
The Supreme Court of India had separated the petitions related to the Electoral Bonds Scheme into three sets and decided to hear those sets separately.
What is an Electoral Bond?
- Electoral Bonds comes under the money instruments like promissory notes through which anyone can donate money to political parties.
- The person who wants to donate money can get the bond from authorized branches of SBI by paying the amount by cheque or digitally. (Note: Cash is not allowed).
- The Electoral Bond can be sold in multiples of Rs.1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakhs, and Rs.1 crore.
When Electoral Bond Scheme was Introduced?
- The Electoral Bonds Scheme was announced in the Finance Bill, 2017 but it is officially notified as Electoral Bond Scheme in 2018.
Reason behind introducing the Electoral Bond Scheme:
- By introducing Electoral Bonds, there are chances to increase Transparency, Accountability and it can also get rid of black money, and preference is given to donor privacy and this also reduces tax evasion.
So, the following are the reasons behind introducing Electoral Bonds:
- To bring transparency to electoral funding in India
- To find out the use of black money for elections funding
- Without exposing the donor details to the public, it ensures that all the donations made to a party would be accounted for in the balance sheets
Features of the Electoral Bond Scheme
- All the citizens of India or the bodies who are incorporated in India can purchase the electoral bond.
- To be eligible for receiving electoral bonds: Any party in India should be registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951), and that political party must have secured at least 1% of the votes in the most recent General elections or Assembly elections.
- There will be no names of donors on the electoral bonds.
- All the Donors will get a tax deduction and the recipient (i.e., political party) will a tax exemption
- After receiving, within 15 days the Political parties must encash electoral bonds and need to fund their electoral expenses.
- The electoral bonds are Available for 10 days each in January, April, July, and October.
New amendment: government allowed 15 days of the additional sale of electoral bonds in election years.
- All the Purchases need to be paid from a KYC-compliant bank account.
- And the electoral bonds must be encashed only through the party’s bank account
Significance of the Electoral Bond Scheme
- Transparency: Electoral Bonds will Make political funding transparent. Because everything will be done through the banks.
- Checks on Black Money: This will Keep a check on black money this results in the reduction of money laundering as funding is made through the banking channels.
- This will enable people to donate to the chosen party
- Parties cannot turn it into a parallel economy since there will be15days limit between buying and selling
What is the Issue?
In the year 2017, an NGO Association for Democratic Reforms filed a PIL that the political parties received foreign funding before elections in West Bengal and Assam. And according to the data, it has said that the ruling party has received more than 60% of the funding that it issued. In 2019, the Supreme Court ordered the parties to produce the details of funding to the Election Commission. In 2021, the apex court refused to issue the interim stay. And Recently, the SC wants to hear the petition regarding the political parties funding.
Conclusion
- To ensure full transparency and disclosure the government needs to reconsider and change certain provisions of the Electoral Bond Scheme.
- The bonds should be ensured that all the funds being collected by the parties are accounted for clean money through appropriate channels or not.