Electoral Bond – Is it Biggest scam in India?
On 15th February 2024, Supreme court (SC) of India declared Electoral bonds as “unconstitutional”, which were introduced in 2017 as a mechanism to fund political parties in India. The Electoral bond scheme was introduced by NDA government , popularly known as MODI government. In its landmark judgement, SC directed STATE BANK OF INDIA (SBI) to handover the details of donors ( Name, Amount, Date of funding etc.) and recipients to Election commission of India. SC also directed Election commission to publish the details of Electoral bonds received from SBI to publish on its website.
Why this scheme of Electoral Bond is being called a scam?
This scheme was introduced in the FINANCE BILL, 2017 during Union Budget 2017-18 by then Finance minister Arun Jaitley. This scheme was classified as Money Bill, and hence the Electoral Bond scheme bypassed certain parliamentary scrutiny processes. It should be noted here that, Money Bills are those legislations which are exempt of being passed or discussed in Rajya Sabha(The Upper House).
What is ELECTORAL BOND Scheme ?
The Electoral Bond scheme is a type of scheme wherein any Indian citizen or organisation registered in India can buy these bonds and contribute the political party they want to. It can be procured only through means of digital payments in various denominations like One thousand, Ten thousand, One lakh, Ten lakh and One crore and that too from State Bank of India. The time span of bond is 15 days from date of issuance. It means, if person A procured an Electoral Bond from SBI as on 1st of January then he must handover the bond to the political party and the political party must present the bond to SBI in order to get the money. All this has to be done within 15 days. If not done so, then the amount will automatically be credited to Prime Minister’s relief fund account.
Why Electoral bond is a scam?
- The main objection imposed by the opposition parties is most of the funding is being enjoyed by the ruling party i.e. BJP party. However, according to the data published by Election commission, the allegation seems to be true. As per the data, a total of Rs. 12,769.40 crore were collected by all parties, out of which Rs. 6000 crore (47%) went to ruling party i.e. BJP between April 2019 and January 2024. For same time period All India Trinamool congress party (regional party of Bengal) got Rs. 1609 crore (12%), Indian National Congress got Rs. 1421 crore (11%) and so on.
- Another allegation is, the people or the big corporate giants who donated to ruling party got some kind of contract or tender i.e. monetary benefit were received by contributors from government’s side and suddenly they started growing and earned huge chunk of profits. On the other hand, those who didn’t donated invited Income tax officials and raids from various government agencies such as ED, CBI etc. This is a case of Quid pro Quo i.e something in return and becomes a rational ground of calling the scheme as a FRAUD or CORRUPTION or SCAM.
- The opposition claims it has no problem in accepting that the ruling party is receiving majority of fundings. It says the problem is, in the name of Electoral bond a scam is going on and government machinery is behaving as a money collecting tool for the ruling party.
How Electoral Bond works?
Electoral bond is a kind of promissory note which has to be purchased by the donor from SBI only. To keep it simple, one can consider it as a piece of paper issued by SBI. The same paper has to be given to the party and it has to redeem the amount within 15 days, else the amount will automatically be transferred to Prime minister’s relief fund.
It can be easily seen from the above sample image –
- Name of the buyer of the bond is NOT mentioned.
- No mentioning of the name of Political party to which the donor wants to donate.
- The only change amongst various bonds can be observed is the DATE OF ISSUANCE of the bond and the AMOUNT. Rest all things will appear to be same.
What is Secret and unique alpha numeric code in the Electoral bond ?
The government from the very beginning of this scheme i.e. since 2017 claimed that the name of the donor and to which party he contributed will never be disclosed to anyone. The same is evident from the sample image shown above. However, one brave journalist, in order to verify the same, purchased 2 electoral bonds from SBI and sent the hard copies i.e. the bond paper to lab for testing. On evaluation, it was found that every bond contains one unique alpha numeric code which is visible only under UV light . After this, the ministry of finance accepted the same. But, the ministry simultaneously claimed the unique number is just a SECURITY FEATURE and with the help of this number also the donor can’t be tracked.
Again this claim of the government was also false. Various people filed RTIs (Right to information) and the SBI explained that without these serial numbers, the bank could not perform the internal control and reconciliation related aspects. To put it simple, it may happen that one can prepare a forge bond and can reach SBI and may ask for the money. So, SBI will have to first verify, whether the bond is original and is issued by the bank or not. So, for this purpose, it used to put one secret code visible under UV rays only.
Later, in January 2018 a notification was issued by government and it’s section 6 read,” The information of the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal cases by any law enforcement agencies” such as ED, CBI etc.
So, it becomes very much clear, if government wants to know which person or organisation is funding the opposition party then it can very easily obtain the information with the help of law enforcement agencies. Having known the details of the donor, it can be targeted by agencies or various raids can be done with ease. Now, this situation becomes dangerous for a Democratic nation like India, wherein Democracy still needs to grow a lot. This can be easily concluded that those who contributed to opposition can be easily identified and put behind bars in the name of various violations of the laws and ultimately they will stop funding opposition and might start funding ruling party as well.
Frequently asked questions (FAQs)
1. What do you mean by electoral bond? / Who can invest in electoral Bonds
Electoral bond is a new concept w.r.t. political funding in India. Through Electoral bonds, individuals and corporate houses can donante unlimited funds to political parties.
2. How much is an electoral bond?
3. Is electoral bond tax free?
The electoral bonds made by individuals or entities were tax-exempt under Section 80GG and Section 80GGB under the Income Tax Act, 1961. Political parties could accept the donations as per the provisions of Section 13A of the Income Tax Act.