Team  SoOLEGAL

TRANSPARENCY IN FUNDING OF POLITICAL PARTIES IS PROMOTED BY ANONYMOUS ELECTORAL BONDS: Centre submits to Supreme Court of India

Team SoOLEGAL 15 Mar 2019 2:22pm

TRANSPARENCY IN FUNDING OF POLITICAL PARTIES IS PROMOTED BY ANONYMOUS ELECTORAL BONDS: Centre submits to Supreme Court of India

There were amendments of the Finance Act 2017 to the Reserve Bank of India Act 1934, Representation of Peoples Act 1951, Income Tax Act 1961 and Companies Act by which electoral bonds were introduced. This scheme was notified by the Centre on 2nd January 2018. These are in the nature of bearer instruments like a Promissory Note capable of being purchased by an Indian citizen or a body incorporated in India. The bonds can be purchased from an authorized bank, and can be issued to a political party. The party can encash the bond within 15 days. The identity of the donor will be known only to the bank, which will be kept anonymous. 

An affidavit was filed countering the petition filed by Marxist, the Communist Party of India. The petition challenged the scheme of electoral bond "promote transparency in funding and donation received by political parties". The affidavit stated
"the scheme envisages building a transparent system of acquiring bonds with validated KYC and an audit trail. Besides, a limited window and a very short maturity period shall make any misuse improbable. Donors who buy these bonds, their balance sheet will reflect such donations made. The electoral bonds will prompt donors to take the banking route to donate, with their identity captured by the issuing authority. This will ensure transparency, accountability and a big step towards electoral reform."
Much focus was given to political parties which have to file returns before the Election Commission of India as to how much money has come through electoral bonds, which will provide accountability.

On keeping the identity of the buyer of the bonds anonymous, the affidavit stated:

"This is necessary because once this disclosure is made, past experience has shown, donors would not find the scheme attractive and would go back to the less-desirable option of donating by cash"

The affidavit does not say much about the allegation of the petitioner that the amendments could not have been introduced through the Finance Bill as they do not have the characteristics of a money bill. According to the petitioner, the amendments were disguised as money bill to bypass the upper house. 

Tagged: ElectoralBonds   SupremeCourt   Centre   Funding   PoliticalParties  
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