{"id":14480,"date":"2021-03-20T00:00:00","date_gmt":"2021-03-20T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/20-03-2021\/sc-to-hear-plea-against-sale-of-electoral-bonds\/"},"modified":"2021-03-20T00:00:00","modified_gmt":"2021-03-20T00:00:00","slug":"sc-to-hear-plea-against-sale-of-electoral-bonds","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/20-03-2021\/sc-to-hear-plea-against-sale-of-electoral-bonds","title":{"rendered":"SC to hear plea against sale of Electoral Bonds"},"content":{"rendered":"<p><strong>In News:<\/strong> CJI agreed to urgently hear a plea by NGO Association for Democratic Reforms to stay the sale of a new set of electoral bonds before Assembly elections in West Bengal and Tamil Nadu.<\/p>\n<p><strong>About Electoral Bonds<\/strong><\/p>\n<ul>\n<li>They were introduced by a Finance Bill, 2017 and the Electoral Bond Scheme 2018.<\/li>\n<li>Like a <strong>promissory note<\/strong>, Electoral Bond can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.<\/li>\n<li>The citizen or corporate can then donate the same to any eligible political party of his\/her choice.<\/li>\n<li>The bonds will be issued in <strong>multiples of Rs. 1000, Rs 10,000, Rs 100,000 and Rs 1 crore (the range of a bond is between Rs 1,000 to Rs 1 crore)<\/strong>.<\/li>\n<li>These will be available at some branches of SBI.<\/li>\n<li>The bonds are <strong>similar to bank notes<\/strong> that are payable to the bearer on demand and are free of interest.<\/li>\n<li>An individual or party will be allowed to purchase these bonds digitally or through cheque.<\/li>\n<\/ul>\n<p><strong>Usage of electoral bonds<\/strong><\/p>\n<ul>\n<li>A donor with a KYC-compliant account can purchase the bonds from designated branches of SBI and can then donate them to the party or individual of their choice.\n<ul>\n<li>The electoral bonds are available for purchase for 10 days in the beginning of every quarter.<\/li>\n<li>The first 10 days of January, April, July and October have been specified by the government for purchase of electoral bonds.<\/li>\n<li>An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.<\/li>\n<\/ul>\n<\/li>\n<li>Now, the receiver can encash the bonds through the party&#8217;s verified account. The electoral bond will be <strong>valid only for fifteen days<\/strong>.<\/li>\n<li>To receive Electoral Bonds, a party must be\n<ul>\n<li>registered under section 29A of the RPA, 1951 and<\/li>\n<li>has secured at least 1 percent of the votes polled in the most recent General elections or Assembly elections.<\/li>\n<\/ul>\n<\/li>\n<li>The party will be allotted a verified account by the Election Commission of India (ECI) and the electoral bond transactions can be made only through this account.<\/li>\n<li>The electoral bonds will not bear the name of the donor to ensure anonymity.<\/li>\n<li>Donations would be tax deductible.\n<ul>\n<li>Hence, a donor will get a deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Benefits as per Government:<\/strong><\/p>\n<ul>\n<li><strong>Transparent Funding:<\/strong> Electoral bonds will make party balance sheets transparent without exposing the donor details to the public.<\/li>\n<li><strong>Curb Black money:<\/strong> Electoral bonds would keep a tab on the use of black money for funding elections.\n<ul>\n<li>In the absence of electoral bonds, donors would have no option but to donate by cash after siphoning off money from their businesses.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Controversy over electoral bond<\/strong><\/p>\n<ul>\n<li><strong>Need to disclose Donor\u2019s Identity:<\/strong> Experts feel that the government must not restrain from allowing details of such donations to be made public for better transparency.\n<ul>\n<li>The corporations may donate without the knowledge of shareholders and there will be no medium to seek such info.<\/li>\n<li>Neither the voters will have an idea about the donors of political parties.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Influx of Black Money in Political system:<\/strong> It was alleged that anonymous donors could mean influx of black money.\n<ul>\n<li>Similar concerns were raised by <strong>RBI in an article published by HuffPost India in 2019<\/strong> which was <strong>suspicious of Money Laundering leading to &#8220;undermined faith in Indian banknotes&#8221;<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Help Big Corporates and Big Parties:<\/strong> The Money laundering will help big corporates and big parties as donors identity will not be revealed.<\/li>\n<li><strong>Several Key Restrictions were done away<\/strong>\n<ul>\n<li>Earlier, no foreign company could donate to any political party under the Companies Act<\/li>\n<li>A firm could donate a maximum of 7.5 percent of its average three year net profit as political donations according to Section 182 of the Companies Act<\/li>\n<li>As per the same section of the Act, companies had to disclose details of their political donations in their annual statement of accounts.<\/li>\n<li>The government moved an amendment in the Finance Bill to ensure that this provision would not be applicable to companies in case of electoral bonds.\n<ul>\n<li>Thus, Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Supreme Court\u2019s Stance<\/strong><\/p>\n<ul>\n<li>In 2019 the Supreme Court asked all the political parties to submit details of donations received through electoral bonds to the ECI.<\/li>\n<li>It also asked the Finance Ministry to reduce the window of purchasing electoral bonds from 10 days to five days.<\/li>\n<li>The apex court is yet inconclusive regarding other pleas against the electoral bonds.<\/li>\n<\/ul>\n<p><strong>Way Forward<\/strong><\/p>\n<ul>\n<li>The <strong>Election Commission<\/strong> in 2019 told the Supreme Court that while it was not against the Electoral Bonds Scheme, <strong>it did not approve of anonymous donations made to political parties<\/strong>.<\/li>\n<li>Hence, the <strong>anonymity clause must be revoked<\/strong> and <strong>electoral bonds continued<\/strong>.<\/li>\n<li>One problem of removing \u2018Anonymity clause\u2019 may be a threat to the donors if the party they supported could not come to power.\n<ul>\n<li>In such cases, the test of maturity of democracy will come into play when the political parties without any grudge may work for the welfare of the common masses.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.business-standard.com\/about\/what-is-electoral-bond\" target=\"_blank\" rel=\"noopener\"><strong>BusinessStandard<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News: CJI agreed to urgently hear a plea by NGO Association for Democratic Reforms to stay the sale of a new set of electoral bonds before Assembly elections in West Bengal and Tamil Nadu. About Electoral Bonds They were introduced by a Finance Bill, 2017 and the Electoral Bond Scheme 2018. Like a promissory [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14481,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[30,49],"class_list":["post-14480","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-gs-2","tag-indian-constitution"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/9647606268277current-affairs.jpg","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14480","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=14480"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14480\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/14481"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=14480"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=14480"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=14480"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}