Demystifying the Electoral Bond Scheme Political Contributions and quest for Transparency
Symbiosis Law School, Noida, India
Volume III, Issue IV, 2020
The principle of transparency and accountability in political contributions is the cornerstone of any salubrious functioning democracy. The focal consideration for achieving the desired goal of transparency in political funding is essentially the capacity of the citizens to identify the contributions which are received by any given political party or its affiliates through different corporate/non-corporate contributors. The Hon’ble Supreme Court has also recognised the importance of transparency in political funding and has accordingly embraced the concept of ‘aware citizenry’. The Finance Act, 2017 had introduced the system of Electoral Bonds whereby amendments were made into various statutes and the Central Government was empowered to notify a scheme for the issuance of the said Electoral Bonds. Accordingly, the Electoral Bonds Scheme was notified on 2nd January 2018 and the State Bank of India was authorised to issue and encash the Electoral Bonds. The nature of the said bonds was prescribed to be a bearer banking instrument with no trace of the buyer and payee. This paper discusses the impact of Electoral Bonds on the transparency of political contributions in India. It highlights the accountability predicament that has emerged due to the bearer nature of the bonds. This paper views the amendments made into the Companies Act, 2013 and Foreign Contribution Regulation Act, 2010 by Finance Act 2017 and Finance Act, 2016 respectively, as having a delirious impact upon political autonomy and electoral transparency of the country as it allows anonymous contributions from foreign companies with subsidiaries in India to make donations to parties. This paper concludes with recommendations to scrap the bearer instrument nature of the Electoral Bonds, comprehensive disclosure of all political contributions without distinctions, thorough audit process for funding, and devising setups for public scrutiny of contributions received by parties, to ensure transparency and accountability in political funding.
Keywords: Electoral Bond Scheme, political contributions, transparency, aware citizenry.