ELECTORAL BONDS

Electoral bonds are financial instruments used for making donations to political parties.

 

Here are the key points regarding electoral bonds:  

• Eligibility for Political Parties:

Only political parties that meet the following criteria are eligible to receive electoral bonds:

1. Registered under Section 29A of the Representation of the People Act, 1951.
2. Secured at least one percent of the votes polled in the last general election to the House of the People (Lok Sabha) or the Legislative Assembly (state elections) 12.

• Nature of Electoral Bonds:

1. An electoral bond is a bearer instrument, meaning it does not carry the name of the buyer or payee.
2. No ownership information is recorded, and the holder (i.e., the political party) is presumed to be its owner.
3. These bonds are issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore.
4. Individuals (Indian citizens) and domestic companies can donate these bonds to political parties of their choice.
5. Political parties must redeem these bonds within 15 days of receiving them 3 .

• Transparency Concerns:

1. Critics have raised concerns about transparency in political party finances.
2. The scheme does not require political parties to disclose the names and addresses of contributors using electoral bonds in their annual contribution reports filed with the Election Commission.
3. While citizens receive no details about the donors, the government can access donor information through the State Bank of India (SBI) 3.

In a recent landmark judgment, the Supreme Court annulled the electoral bonds scheme, citing violations of constitutional rights to freedom of speech, expression, and information 456. 

The CJI said, "Economic inequality leads to differing levels of political engagement because of the deep association between money and politics. At a primary level, political contributions give a 'seat at the table' to the contributor. That is, it enhances access to legislators.

The court emphasized the importance of voters’ right to information in maintaining the purity of elections and sustaining democracy.