Electoral Bonds

Context: A recent report by the Association of Democratic Reforms (ADR) an Indian Non-governmental Organization (NGO) established in 1999 situated in New Delhi sheds.

Key Highlights of the ADR Report

The report analyzed political party donations from various sources: Electoral Bonds, corporate contributions, MP/MLA donations, meetings, morchas, and party units.

Electoral Bond Donations: The highest donations from Electoral Bonds, amounting to ₹3,438.8237 crore, were received in 2019-20, the year of the general elections.

During the fiscal year 2021-22, when 11 Assembly elections took place, individuals contributed ₹2,664.2725 crore through Electoral Bond donations.

Distribution of Donations: Out of the total donations of ₹16,437.635 crore received by the 31 political parties analyzed, 55.90% came from Electoral Bonds, 28.07% from the corporate sector, and 16.03% from other sources.

National Parties : National parties witnessed a significant surge in Electoral Bond donations, experiencing a 743% increase between FY 2017-18 and FY 2021-22.

Corporate donations to national parties increased by 48% during the same period.

Regional Parties: Regional parties also received a substantial proportion of their donations from Electoral Bonds.

Donations by Specific Parties: The BJP, as the ruling party, received the highest donations among national political parties.

More than 52% of the BJP’s total donations came from Electoral Bonds, totaling ₹5,271.9751 crore.

The Congress secured the second-highest Electoral Bond donations, with ₹952.2955 crore, which accounted for 61.54% of its total donations.

The Trinamool Congress received ₹767.8876 crore through Electoral Bonds, representing 93.27% of its total donations.

Why have they attracted criticism?

The electoral bonds scheme faces central criticism for failing to achieve its intended purpose:

For example, critics argue that the anonymity of electoral bonds is only for the broader public and opposition parties.
The sale of electoral bonds through a government-owned bank (SBI) raises concerns about government’s knowledge of funding sources for its opponents.
This enables the government to potentially exploit big companies for funding or retaliate against non-supporters, creating an unfair advantage.
Over 90% of electoral bonds were of Rs 1 crore denomination, reducing accessibility for common people.
Before the electoral bonds scheme, companies were subject to a contribution limit of 7.5% of their average net profits over the preceding three years when donating to a political party.
Critics argue that the government’s amendment to the Companies Act removed funding limits, allowing unlimited corporate contributions.

FAQs Related with Electoral Bonds

Ques 1: What are electoral bonds?

Answer : The government introduced electoral bonds to make political funding more transparent and reduce the use of black money in elections, aiming for a cleaner and fairer electoral process.

Ques 2: How do electoral bonds work?

Answer : Individuals and corporates can purchase electoral bonds from authorized banks and donate them to political parties anonymously.

Ques 3:Why were electoral bonds introduced?

Answer : The introduction of electoral bonds aimed to make political funding more transparent and reduce the influence of black money in elections.