Mint Explainer: Demystifying the electoral bonds scheme
Mint examines the concerns related to the transparency and accountability of the scheme, as well as its potential for misuse as a political funding source. Electoral bonds were introduced in the 2017 Union Budget to enhance transparency in political funding. Concerns arose due to donor anonymity and lack of disclosure.
The cash donation limit was reduced from ₹20,000 to ₹2,000, while mandatory disclosure remained at ₹20,000. Private entities could buy and transfer these bonds to political parties. Amendments removed the cap on corporate donations and disclosure obligations.
They are promissory notes in denominations from ₹1,000 to ₹1 crore, available only from the State Bank of India. Donors remain anonymous, known only to the bank. Bonds can be encashed by the political parties with Election Commission-registered bank accounts.
The aim is to bring transparency to political funding and prevent fund misuse, amending various legislations for accountability and transparency in political financing. Numerous amendments to various legislations, including the Foreign Contribution Regulation Act, Representation of the People Act, Income Tax Act, and the Companies Act, with the claim of bolstering accountability and transparency in political financing. The electoral bonds case, initiated in 2017 by the Association for Democratic Reforms (ADR), has seen multiple petitions, including ones from the Communist Party of India (Marxist), Congress leader Jaya Thakur, and concerned individuals.
It questions the legitimacy of amendments in the Finance Act of 2017 and the Finance Act of 2016. The petitioners argue that these changes allow unlimited, unchecked funding for political parties, with a bias toward the ruling government. Electoral
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