On March 18, 2021, CJI Sharad Bobde agreed to have an urgent hearing to a plea to stay the sale of a new set of electoral bonds on April 1. The PIL has been issued by the NGO Association for Democratic Reforms. They have requested to have a hearing before Assembly elections in crucial states such as West Bengal and Tamil Nadu. The NGO has put forward the argument that these electoral bonds are opening gates of unacknowledged fundings for various political parties and hence are an obstacle to safe and transparent elections.
Electoral Bonds are like promissory notes which can be brought from certain branches of The State Bank of India. These can be bought by a citizen or company and are issued in multiples of ₹1,000, ₹10,000, ₹100,000 and ₹10,000,000. These can then be donated to any eligible political party of the individual’s choice. All the individual must have is a KYC-compliant account.
The NGO argues that this method has become a promenade for shell companies. Shell companies are those that exist only on paper and do not have any employees or office but may have a bank account. The NGO claims that any further sale of these would pave way for unlawful funding in the poll-bound states of West Bengal and Assam. Moreover, these donations are exempted from taxes so anonymous fundings will hike from Indian as well as foreign firms.
On January 20 last year, the top court refused to grant interim stay on the 2018 Electoral Bonds Scheme and sought responses of the Centre and the Election Commission on an interim application by the NGO seeking stay on the scheme. The plea was not clearly rejected as the top court had earlier asked the political parties to submit their account statements to the poll panel in sealed covers.
Solicitor General Tushar Mehta mentioned that attorney general KK Venugopal would also be attending the case on behalf of the government which has scheduled its hearing on 24th March.
So far more than ₹6,500 crore worth of electoral bonds have been sold with the majority of donations going to the ruling party, the Association of Democratic Republic (ADR) claimed. There are two documents from the RBI and the election commission stating that the electoral bond scheme is pernicious to democracy.
As far as the mechanism of the process seems easy, it can have serious repercussions to the transparency of the elections due to several loopholes that make corruption obvious.
This article has been written by Ritu Katkar for The Paradigm
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