{"id":824,"date":"2024-02-19T09:13:00","date_gmt":"2024-02-19T09:13:00","guid":{"rendered":"https:\/\/iasquest.com\/?p=824"},"modified":"2026-02-11T19:21:01","modified_gmt":"2026-02-11T19:21:01","slug":"gs-ii-government-policies-and-interventions-for-development-in-various-sectors-and-issues-arising-out-of-their-design-and-implementation","status":"publish","type":"post","link":"https:\/\/kingmakersiasacademy.com\/current-affairs\/gs-ii-government-policies-and-interventions-for-development-in-various-sectors-and-issues-arising-out-of-their-design-and-implementation\/","title":{"rendered":"GS-II (Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation)"},"content":{"rendered":"\n

News:<\/strong> SC strikes down electoral bonds scheme as \u2018unconstitutional\u2019<\/p>\n\n\n\n

Q1. Analyse the pros and cons of the Electoral Bond Scheme and how it barred the citizens from the right to information.<\/strong><\/p>\n\n\n\n

Recently, the Supreme Court has given a verdict striking that the Electoral bond scheme is unconstitutional and upheld the citizens\u2019 right to know the information. SBI must disclose details of each electoral bond encashed by political parties which shall include the date of encashment and the denomination of the electoral bond.<\/p>\n\n\n\n

It held that \u201cthe deletion of the proviso to Section 182(1) of the Companies Act<\/strong>, permitting unlimited corporate funding to political parties is arbitrary and violate of Article 14<\/strong>\u201d.<\/p>\n\n\n\n

About Electoral Bond Scheme:<\/strong><\/p>\n\n\n\n

\u25cf It was first announced during the Union Budget session in 2017, \u201celectoral bonds\u201d are interest-free \u201cbearer instruments<\/strong>\u201d, which means that they are payable to the bearer on demand, similar to a promissory note.
\u25cf Electoral bonds allow Indian citizens or a body incorporated in India to purchase bonds, enabling anonymous donations to political parties<\/strong>.
\u25cf Purchased in denominations ranging from Rs1,000 to Rs1 crore, these bonds can be bought from authorised SBI branches through accounts complying with KYC norms. Following this, the political parties can choose to encash the bonds within 15 days of receiving them and fund their electoral expenses.<\/p>\n\n\n\n

Reason for the introduction of Electoral Bond:<\/strong><\/p>\n\n\n\n

\u25cf The Centre\u2019s rationale behind introducing the electoral bonds scheme was to \u201ccleanse the system of political funding in the country\u201d and bring about \u201ctransparency in electoral funding in India\u201d.
\u25cf Before the scheme was introduced the political parties had to make public all donations above Rs 20,000. The Finance Act(s) of 2016 and 2017 amended four separate legislations to make way for the electoral bonds scheme, including the Foreign Contribution Regulation Act, 2010; the RPA, 1951; the Income Tax Act, 1961; and the Companies Act, 2013.<\/p>\n\n\n\n


Interpretations of the top court about the scheme:<\/strong>
\u25cf The court stated that anonymous electoral bonds<\/strong> violate the Right to Information and Section 19(1)(a)<\/strong>.
\u25cf Infringement of the right to information is not justified by the purpose of curbing black money<\/strong>. Since, the electoral bonds scheme is not the only scheme to curb black money.
\u25cf Amendment to the Companies Act which allows blanket corporate political funding is unconstitutional.
\u25cf The court criticized the government\u2019s contention that voters do not have the right to know the source of funding of political parties.<\/p>\n\n\n\n

Pros of the scheme:<\/strong><\/p>\n\n\n\n

Enhanced Transparency<\/strong>: Promotes transparency through engagement with election authorities and the public.<\/p>\n\n\n\n

Preservation of Donor Anonymity<\/strong>: Allows confidential donations by individuals and organizations.<\/p>\n\n\n\n

Discouragement of Cash Transactions<\/strong>: Requires payments through designated banks, reducing cash use.<\/p>\n\n\n\n

Cons of the scheme<\/strong><\/p>\n\n\n\n

Crony Capitalism<\/strong>: No donation limits facilitates crony capitalism in which the private players influence the elections and the ruling.<\/p>\n\n\n\n

Contradiction of Transparency<\/strong>: the bond with anonymity benefits the specific party and poses risk to free and fair elections.<\/p>\n\n\n\n

Barred from right to know<\/strong>: Exemptions of political parties from disclosing donations contradicted the citizens\u2019 right to know.<\/p>\n\n\n\n

ADR Findings<\/strong>: National Parties saw a substantial surge in bond donations raising questions about their influence.<\/p>\n\n\n\n

Way Forward<\/strong>:<\/p>\n\n\n\n

\u25cf Chilean Experiment<\/strong> \u2013 Reserved Contributions: Under it, the donors could transfer the money they wished to donate to parties to the Chilean Electoral Service.
\u25cf The Electoral Service would then forward the sum to the party without revealing the donor\u2019s identity.
\u25cf Disclosure Requirements<\/strong>: The government may reconsider and modify provisions of the Electoral funding to ensure full disclosure and transparency.<\/p>\n\n\n\n

There is a need for effective regulation of political financing along with standard reforms to break the vicious cycle of corruption and erosion of quality of democratic polity.<\/p>\n