What are electoral bondsIt is a bond issued like a promissory note which shall be a bearer banking instrument and shall not carry the name of the buyer or payee. Touted as an electoral reform measure, the electoral bond scheme was introduced by the Modi government in 2017, which allowed individuals and companies to donate unlimited money to political parties in an anonymous way. Pitched as an alternative to cash donations, the then finance minister Arun Jaitley claimed that the scheme would bring more transparency and prevent black money in the system. It allowed an individual, groups or corporates to buy electoral bonds from SBI and donate them to any political party of their choice.The interest-free bonds are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore. Political parties that secured at least 1% of the votes in the last Lok Sabha or assembly elections were eligible to accept the bonds.AmendmentsThough introduced in 2017, the electoral bonds scheme was notified in 2018. The government used the money bill route to bring in the laws to bypass scrutiny by the Rajya Sabha. The government also swiftly pushed through amendments to the Representation of the People Act and Income Tax Act, which made the donations anonymous.It also made amendments to the Companies Act, the Reserve Bank of India Act, and the Foreign Contribution Regulations Act (FCRA). Chokkar points out that the amendments have done away with the cap that companies could only donate up to 7.5% of their profit to political parties without disclosing the details. Also, the amended FCRA allowed foreign companies and even shell companies to donate to political parties without revealing their identity.“With this, foreign entities can take control of the Indian political system, which is a threat to the integrity and security of the country. Foreign companies can donate to political parties through shell companies, which is a very risky thing. It also enables foreign companies to set up their subsidiaries in Indian arms just to function as a conduit for giving funds to political parties,” said Chokkar.Since the inception of the scheme, the government has tweaked many rules, says Chokkar. In November 2022, the government through an official gazette, allowed the sale of bonds for an additional 15 days in years that have state elections. According to the RBI rule, only an additional period of 30 days was allowed to be specified by the Central government in the year of the Lok Sabha elections. From 2018, the sale of bonds was allowed for state elections also, says Chokkar.“The bonds were introduced for Parliament elections. However, the government changed the rules several times. The rules say that the sale of bonds should take place only in the first 10 days of January, April, July, and October. However, they sold the bonds on the eve of two state elections in May and November 2018,” he points out.
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