Editorial 1: Electoral bonds worth Rs 232.10 crore sold in December,
83% redeemed in Delhi
Recent Context:
- Recently, in Reply of Right to Information by SBI –
- Electoral bonds worth Rs 232.10 crore were sold in the December 2022 window of sales, with nearly half of them being sold at the State Bank of India’s Mumbai branch and 83% of them being redeemed in the New Delhi branch
- Earlier in Reply to RTI by SBI , “An amount of Rs 1.90 crore, inclusive of GST, has been levied to the government so far towards printing of Electoral Bonds,”
- The government has shelled out Rs 9.53 crore of taxpayers’ money towards commission and printing costs of the Electoral Bonds (EBs) issued to fund political parties
- Even, in the past Two NGOs — Common Cause and Association for Democratic Reforms (ADR) — have challenged the scheme and while PIL in the SC, alleging that it is “distorting democracy”.
Basic Understanding:
- Free, faire and transparent election is central value for the vibrant democracy. There are multiple facets of problem in the electoral process such Criminalization of politics, religion-caste based politics and non-transparent funding of political parties which hamper the process of election itself.
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As per the Article 327 of Indian Constitution. Subject to the provisions of this Constitution, Parliament may from time to time by law make provision with respect to all matters relating to, or in connection with, elections to either House of Parliament or to the House or either House of the Legislature of a State including the preparation of electoral rolls, the delimitation of constituencies and all other matters necessary for securing the due constitution of such House or Houses |
- Therefore, Parliament enacted the Representation of People Act,1951 (RPA) in order to promote transparency in election.
What are electoral bonds?
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In the Union Budget speech on February 1, 2017, then Finance Minister Arun Jaitley stated: “Even 70 years after Independence, the country has not been able to evolve a transparent method of funding political parties which is vital to the system of free and fair elections…Political parties continue to receive most of their funds through anonymous donations which are shown in cash. An effort, therefore, requires to be made to cleanse the system of political funding in India.” |
- Electoral bond scheme was announced in Union Budget 2017-18 to “cleanse the system of political funding in the country.”
- The electoral bonds were introduced by amendments made 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
- Electoral Bond is a bearer Banking Instrument through which anyone can donate money to eligible Political Parties. Such bonds are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore
- It can be bought from authorised branches of the State Bank of India.
- As such, a donor is required to pay the amount via a cheque or a digital mechanism (cash is not allowed) to the authorised SBI branch
- The donor can then give this bond (just one, if denomination chosen the is Rs 10 lakh, or 10, if the denomination is Rs 1 lakh) to the party or parties of their choice.
- The political parties can choose to encash such bonds within 15 days (maturity of bond) of receiving them and fund their electoral expenses.
- During the process of political party funding through electoral bond , it is ensured that the name of the donor remains anonymous
Note: The Electoral Bonds can be redeemed only by an eligible Political Party by depositing the same in their Designated Bank Account maintained with Authorised Bank. ( Not by an individual)
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Which Political Parties are eligible to receive Donations through Electoral Bonds?
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Other initiatives which are taken to promote transparent political funding
- Reduction in the amount of money that a political party could accept in cash from anonymous sources — from Rs 20,000 to Rs 2,000.
Criticism Against the Electoral bond scheme:
- The central criticism of the electoral bonds scheme is that it does the exact opposite of what it was meant to do: bring transparency to election funding.
- As such bonds are sold via a government-owned bank (SBI) leaves the door open for the government to know exactly who is funding its opponents. This, in turn, allows the possibility for the government to influence the big companies, or victimise them for not funding the ruling party — either way providing an unfair advantage to the party in power
- Majoring of the political funding is limited to particular (ruling) party: As per the National Campaign for People’s Right to Information, more than 75 per cent of all electoral bonds have gone to the BJP, which is in power at the Centre.
- Brings Opacity in the Political Funding- Ordinary citizens are not able to know who is donating how much money to which political party, and the bonds increase the anonymity of political donations
- Further, one of the arguments for introducing electoral bonds was to allow common people to easily fund political parties of their choice but more than 90% of the bonds have been of the highest denomination (Rs 1 crore).
- It opens the possibility of misuse of corporate funding: Before the introduction of electoral bonds scheme, A company could donate to a political party maximum of 7.5 per cent of the average net profits of a company in the preceding three years. However, the government amended the Companies Act to remove this limit, opening the doors to unlimited funding by corporate India.
- Allows unchecked foreign funding- An amendment to the Foreign Contribution Regulation Act (FCRA) allow political parties to receive funding from foreign companies with a majority stake in Indian companies. It can lead to Indian policies being influenced by foreign companies
- Non-governmental organisations (NGOs) — Common Cause and Association for Democratic Reforms (ADR) — have legally challenged the scheme that “that the introduction of electoral bonds is “distorting democracy” in India:
What are the favorable arguments for electoral funding?
- It limits the funding of political parties through cash: As earlier majority of political funding in large amount in received anonymously. It increases the chances of crony-capitalism or set up of unholy nexus between political parties and funder of illicit money.
- Protects donor from political victimization- as non-disclosure of the identity of the donor is the core objective of the scheme. Therefore, checks on the victimization of the fund provider to political party and his/her identity remain hidden through the process.
- It is also an effective tool to curb black in political funding: As it mandates the funding by properly following the KYC norms and through cheque or digital mode. It also ensures that beneficiary political party has to disclose the receipt of this money and must account for the same I given duration of time.
Way forward?
- The initiative of government is in the right direction to promote the transparency in political funding while saving the donor from victimization for its funding to particular party.
- However, there is need for greater transparency and accountability from political parties by publicly publishing the data of received fund while hiding identity of donor and timely filling of ITR.
- Along with it, the payment for commission and printing costs of the Electoral Bonds (EBs) should be charged from the concern receiving political parties in proportion to their received amount.
Editorial 2: Assam delimitation: Why now, what are the concerns raised
Recent Context:
- Recently, Election Commission started the process of delimitation of Assembly and Parliamentary constituencies in Assam.
- The EC had announced on December 27, 2022 that the government had asked it in November to re-draw constituency boundaries in Assam, where delimitation has not been done since 1976.
What is the importance of delimitation?
- Boundaries of Assembly and Parliamentary constituencies are required to be updated from time to time to ensure that the population size in each seat is roughly the same.
- The basic principle is that one vote should have the same value, irrespective of the constituency. Apart from population, geographical features, boundaries of administrative units and connectivity are also considered.
Why is delimitation being done in Assam alone?
- The Constitution says boundaries of Assembly constituencies should be updated after every decadal Census, but through amendments in 1976 and 2001, the process of delimitation was put off for 25 years each time.
- So far, delimitation for the whole country has been carried out four times — under Delimitation Acts in 1952, 1962, 1972 and 2002 — and remains in abeyance till 2026
- During the last delimitation, which was completed in 2008, the government decided to leave out Assam, Arunachal Pradesh, Manipur and Nagaland, as well as Jammu and Kashmir.
- For Assam, the government cited security concerns and the potential for disturbing law and order, among others, when it put off the exercise through an order on February 8, 2008.
- In 2020, the government set up a Delimitation Commission for J&K, Assam, Arunachal Pradesh, Manipur and Nagaland.
- But a year later, in March 2021, the government omitted the four North-Eastern states when it extended the tenure of the Commission.
- The commission, headed by Justice Ranjana Desai, went on with redrawing the boundaries of J&K, giving its final award in May 2022. Now, the government and the EC have revived the delimitation plan for Assam, but are yet to state publicly what led to the decision.
Why is EC and not an independent Delimitation Commission?
- The Election Commission is empowered to carry out delimitation of Parliamentary and Assembly constituencies of Arunachal Pradesh, Assam, Manipur and Nagaland, as per Section-8A of the Representation of the People Act, 1950.
- The section says “if the President is satisfied that the situation and the conditions prevailing” in the states are conducive for conducting delimitation, then he or she may rescind the deferment order.
- An order under the same section was issued by the President on February 28, 2020, saying that there had been “a significant improvement in the security situation”, allowing for the delimitation exercise in all four of the states.
Why is the 2001 Census being used?
- According to Article 170 of the Constitution, the population numbers to be used for drawing boundaries of constituencies would be as per the 2001 Census until the first Census after 2026 is published.
- In the case of Jammu and Kashmir, the Jammu and Kashmir Reorganisation Act, 2019 passed by Parliament had mentioned the population in the 2011 Census as the basis of delimitation.
What are the Opposition’s concerns?
- Opposition leaders, while saying that delimitation is required, have questioned the use of the 2001 Census figures, given that 2011 Census data is available and the 2021 Census process is on.
- Assembly elections in Assam are due in 2026. When the delimitation was kept in abeyance in 2008, one of the reasons was that the National Register of Citizens had not been finalised.
- Another issue being flagged by the Opposition is that a day before the Election Commission’s freeze on any new administrative units from January 1 came into effect,
- the Assam Cabinet approved the merger of four districts into the districts they were carved out of, one as recently as January 2022
- Assam CM Himanta Biswa Sarma said the reason for the move was “administrative exigencies”, the Opposition has alleged this was done so that the population of districts is balanced with majority community-dominated areas,
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About Delimitation Commission:
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