Monday, April 15, 2019
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Political funding is still a grey area in India.

Electoral bond scheme has been facing criticism since its launch in January 2018. Here are the reasons

THE SUPREME Court has directed all political parties to submit details of donations received through electoral bonds to the Election Commission scheme by May 30. Electoral bond scheme has been facing criticism since its launch in January 2018. Here are the reasons:

Electoral bond is an instrument to donate money to political parties  and can be purchased from State Bank of India and identities of donor and receiver are kept secret

The NDA government introduced electoral bonds by  making amendments through the Finance Act 2017 to the Reserve Bank of India Act 1934, Representation of Peoples Act 1951, Income Tax Act 1961 and Companies Act. 

Rules regarding donations by private companies and declaration of their political contributions have been removed. Another amendment was made in March 2018 to exempt political parties from informing the Election Commission (EC) of any amount received above Rs 2,000, if made through electoral bonds. 

NDA government claims that electoral bonds will weed out black money from political funding but opposition parties and Election Commission feel the bond scheme promotes anonymous funding and favours the BJP. 

"Mind boggling amount of black money had been used during elections and donations were given in cash. Now under this scheme, payments are made through proper banking channels," said Attorney General KK Venugopal in the Supreme Court.

This short video explains the topic. 

Election Commission said: “The scheme legalises anonymity but the right to vote means making an informed choice - citizens must know who is funding the candidates.”

The poll panel also claimed that electoral bonds make it difficult for the commission to track donations from overseas and government companies, both barred from funding political parties. 

The govt said: "It is not voters concern to know where the money comes from. And there is no complete secrecy. Reserve Bank of India (RBI) and Income Tax department will get the information about donors."

Critics, however, claim that the ruling party can get this information from RBI and then arm twist those who donate to the opposition parties.

Another argument is that if donation remains anonymous, companies can influence government policy by funding the ruling political party

BJP was the biggest beneficiary of the electoral bond scheme launched by the government in 2017-18, bagging 94.5 percent of the bonds worth a little over Rs 210 crore.

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