Mains Practice Questions

Approach

• Start your answer by briefly describing electoral bonds.
• Discuss how they ensure fair, just and open elections.
• Discuss various concerns regarding electoral bonds.
• Conclude accordingly.

Introduction

• Electoral bonds are money instruments like promissory notes, which can be bought by companies and individuals in India from the State Bank of India (SBI) and donated to a political party, which can then encash these bonds.
• The bonds are only redeemable in the designated account of a registered political party.
• A person being an individual can buy bonds, either singly or jointly with other individuals.

Body

• Electoral bonds help in ensuring just, fair and open elections:
  • We can say that Election bonds make it simple for regular people to provide money to the political parties of their choice.
  • Enhance Transparency: The main goal of the electoral bonds programme was to increase the level of transparency in India's election financing.
  • Anonymity: The procedure makes sure that the donor's identity is kept a secret.
  • Increased accountability: As the Election Commission receive information from the political parties regarding contributions made through electoral bonds. This would result in assist in improving India's electoral financing system.
• Concerns regarding electoral bonds:
  • Possibility of Extortion:
    • The fact that such bonds are sold via a government-owned bank (SBI) leaves the door open for the government to know exactly who is funding its opponents.
    • This, in turn, allows the possibility for the government of the day to either extort money, especially from the big companies, or victimise them for not funding the ruling party — either way providing an unfair advantage to the party in power.
  • A Blow to Democracy:
    • Through an amendment to the Finance Act 2017, the Union government has exempted political parties from disclosing donations received through electoral bonds.
    • This means the voters will not know which individual, company, or organization has funded which party, and to what extent.
    • However, in a representative democracy, citizens cast their votes for the people who will represent them in Parliament.
  • Compromising Right to Know:
    • The Supreme Court of India has long held that the “right to know”, especially in the context of elections, is an integral part of the right to freedom of expression (Article 19) under the Indian Constitution.
  • Crony Capitalism:
    • The electoral bonds scheme removes all pre-existing limits on political donations and effectively allows well-resourced corporations to fund elections, subsequently paving the way for crony capitalism.
      • Crony Capitalism is an economic system characterized by close, mutually advantageous relationships between business leaders and government officials.

Conclusion

• There is a need for effective regulation of political financing along with bold reforms to break the vicious cycle of corruption and erosion of quality of democratic polity.
• It is crucial to plug the loopholes in the current laws to make the entire governance machinery more accountable and transparent.
• Voters can also help bring in substantial changes by demanding awareness campaigns. If voters reject candidates and parties that overspend or bribe them, democracy would move a step higher.