What does it take to buy an electoral bond?

GS Paper 2

Syllabus: Government Policies and Interventions and Issues arising out of their Design and Implementation

Source: IE

Context: Five years ago, the sale window for the first tranche of Electoral Bonds was opened in March 2018.

Introduction of Electoral bonds:

• The Electoral Bond Scheme (EBS), announced in the 2017 Union Budget, was notified by the Central Government in 2018.
• These bonds can be purchased from select SBI branches by any Indian person or corporation incorporated in India.

Performance of EBS:

Concerns related to the operation of EBS:

• Introduce a new type of anonymity by –
  • Reducing public and legislative oversight. For example, only the ruling party via the SBI has a full account of all donations.
  • Political parties do not disclose electoral bond donors. The only requirement is the annual audit reports with all donations received via electoral bonds.
• Impact of anonymity: Dilutes one voter-one vote principle, an undue advantage to the ruling party, etc.

Way ahead:

• In 2021, the SC refused to stay the sale of electoral bonds and suggested bringing in more transparency.
• The information regarding donors and donations should be accessible to the Parliament, the Election Commission of India and the Opposition via SBI.
• The RTI must be strengthened.
• Ex-CEC (OP Rawat) suggests that the political funding scheme could be improved by appointing an “independent watchdog”.

Insta Links:

The need to have full disclosure of electoral bonds and political funding

Mains Links:

Do you think that setting up an “independent watchdog” to oversee the electoral bond system will ensure the much-needed transparency and accountability in the electoral bond scheme? Critically analyse.