Electoral Bonds

· Supreme Court heard a plea by NGO Association for Democratic Reforms (ADR) to stay the sale of a new set of electoral bonds on April 1, before the assembly elections in crucial states such as West Bengal and Tamil Nadu.
· The Supreme Court has reserved orders on the question of whether or not to stay the electoral bond scheme, ahead of the upcoming State assembly elections. Illicit Money
· The Reserve Bank of India (RBI) and the Election Commission had both expressed their concern that the sale of electoral bonds had become an avenue for shell corporations and entities to park illicit money and even proceeds of bribes with political parties.
· There are two documents from the RBI and the Election Commission said that this scheme is detrimental to democracy.

· One RTI report has shown that illegal sale windows have been opened in the past to benefit certain political parties.
· Any further sale of electoral bonds before the upcoming State elections in West Bengal, Tamil Nadu, Kerala and Assam would further increase illegal and illicit funding of political parties through shell companies.
· The scheme has opened doors to unlimited political donations even from foreign companies and thereby legitimising electoral corruption at a huge scale.
· Both the RBI and the Election Commission had objected to the electoral bond scheme. · The government defended the scheme by it allowed anonymity to political donors to protect them from political victimisation.

· In a Democracy, citizens have the right to take an informed decision – key being the knowledge about funding of political parties.
· Supreme Court has held that the “right to know”, especially in elections, is an integral part of right to freedom of expression under the Indian Constitution.
· Electoral bond scheme ensures anonymity to the donors – thereby violates the Right to Know of the citizens.

· In many advanced countries, elections are funded publicly
- ensuring parity of resource allocation across party lines, thereby having a level playing field. · Another method used where public funding is not practiced, is to set caps on financial contributions to political parties.
· Electoral bonds scheme removes all pre-existing limits on political donations – thereby enable limitless donations to political parties, bringing in asymmetry.
· Donations are routed through State Bank of India, which creates a possibility for the Government to track the donor. This, in turn, becomes a way to squeeze donations to rival political parties.

· Key objective stated is to prevent the flow of black money into elections – however, it is unclear what preventing black money has to do with donor anonymity, making donations limitless.