- Prelims: Electoral bonds, ECI, GST etc
- Mains GS Paper I and II: Parliament-Structure, functioning and conduct of business, powers and privileges and issues arising out of them etc
ARTICLE HIGHLIGHTS
- The discourse around political finance in India usually revolves around the issue of corruption.
- Electoral bonds were introduced as a financial tool for enabling donations to political parties.
INSIGHTS ON THE ISSUE
Context
Electoral Bonds:
- As debt instruments, these can be bought by donors from a bank, and the political party can then encash them.
Who can purchase it?
- Citizen of India: Electoral Bonds may be purchased by a person who is a citizen of India or incorporated or established in India.
- Single or jointly: A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals.
Eligibility:
- Political Parties registered under Section 29A of the Representation of the People Act, 1951: Which secured not less than one percent of the votes polled in the last General Election to the House of the People or the Legislative Assembly of the State.
- Authorized bank: The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
- State Bank of India (SBI): It has been authorized to issue and encash Electoral Bonds.
How does it work?
Benefits of electoral bonds:
Arguments against Electoral bonds:
Views about electoral bonds by different political parties:
- Pious instrument: for cleansing politics by routing funding through legal channels
- Instruments of corruption: legitimating institutionalized corruption.
Axes of Political competition:
- Institutional: The regulation of competition between ruling and Opposition parties
- Organizational: The regulation of competition within a party
- Ideological: The role of ideas in determining competition between parties.
How electoral bonds have shaped parties and institutions?
- Opacity of electoral bonds: It renders the power of the Election Commission of India (ECI) irrelevant in terms of ensuring a level-playing field.
- Extent to which political funding is centralized within a party: It determines whether power in the party is drawn from organizational structures or exercised in a personalistic manner.
- For example: Membership-funded parties such as the Dravida Munnetra Kazhagam and the Bahujan Samaj Party of an earlier era were highly organized parties where leaders wielded power in a responsive, programmatic manner.
- Political financing regime: It shapes the role of ideas in grounding political competition.
How electoral bonds have covered the income of Political parties?
- Association for Democratic Reforms (ADR) analysis: Electoral bonds covered 52% of the total income of national parties and 53% of the total income of regional parties.
How electoral bonds are advantageous to the ruling party?
- ECI data: Ruling party in 2019-20 got over 75% of the total electoral bonds sold, compared to a mere 9% share of the opposition.
- Access to transactions: only the government, and presumably the ruling party, have access to the transaction trails.
- Electoral bonds centralize political funding towards the national units of political parties, giving leverage to national leadership over the State and local units.
Relationship of corporates and politicians:
- Personalistic relationships of politicians with big business elites in order to marginalize the regional strongmen.
- Government autonomy to bring in measures: such as demonetisation and Goods and Services Tax (GST) that hurt small businessmen and trading castes, because they now contribute an insignificant speck to its political treasury.
Way Forward
- Institutional safeguards: It is important that independent institutions (such as the ECI and the Supreme Court of India) step in to layer the seeming black hole of electoral bonds with a minimum level of institutional safeguards.
- There is a need for effective regulation of political financing along with bold reforms to break the vicious cycle of corruption and erosion of quality of democratic polity.
- Voters can also help bring in substantial changes by demanding awareness campaigns.
QUESTION FOR PRACTICE
- Discuss the role of the Election Commission of India in the light of the evolution of the Model Code of Conduct.(UPSC 2022)
(200 WORDS, 10 MARKS)
