The Supreme Court on Friday directed political parties to provide details about the names of donors and the money received through electoral bonds in sealed covers to the Election Commission by 30 May 2019.
The direction came in response to a petition that had challenged the validity of electoral bonds that permits donors of political parties to remain anonymous.
What are these bonds? Do they mean anything to the common man?
Finance minister announced the Electoral Bonds scheme in the budget of 2017-18 as a measure to bring transparency in the system of political funding.
The bonds work like any bearer instrument such as a Promissory Note. They are available with select branches of State Bank of India, in the denominations of Rs 1,000, Rs 10,000, Rs 1,00,00 Rs10,00,000, and Rs 1 crore. Anyone can buy these bonds through a KYC-compliant account and donate to the party of his or her choice. The bonds are valid for 15 days of their issuance.
The Election Commission of India provides a verified account to every political party, registered under section 29A of the Representation of the Peoples Act, 1951 and received at least 1% of the votes polled in the latest Lok Sabha or State election. Parties can encash electoral bonds on this account.
Donors’ names are not mentioned on the electoral bonds, hence, they remain anonymous even to the politically party (ies) they donate to. However, the bank maintains all the details.
The donations are tax deductible but the political parties get tax exemption on these amounts.
In the year 2017-18, the BJP earned Rs 210 crore and the Congress Rs 5 crore through electoral bonds.
The CPI(M) had and NGO Association of Democratic Reforms had moved the Supreme Court challenging the validity of electoral bonds that allows political parties to get unlimited donations without revealing the source.