Electoral Bonds UPSC NOTE

 The outcome of the challenge to electoral bonds in the SC

  • With the hearings in the Supreme Court on the electoral bonds challenge have concluded.

  •  It is a good time to discuss how important the outcome of this challenge will be to democracy and rule of law in India

  • Political parties in any country play an indispensable role in the democratic process.

  • They form the government and have the responsibility under our constitution of holding the government to account. 

  • It is thus essential that the parties are adequately funded in a manner which enjoys public confidence.

  • The amendments made to the Representation of the People Act 1951 and other laws which provide for electoral bonds, provide complete anonymity to political donors

  • The requirement all over the world on this issue on the other hand has been the diametrical opposite, requirement of full disclosure on donations to political parties, either by individuals or corporations.

Amendments in Representation of the People Act 1951 contrasts with global norms

  • Back in 1910, the USA  enacted the Publicity Act.

  • Which made all funding of political parties and candidates to be disclosed.

  • Also imposed limits on political contributions.

  • These conditions were challenged and the U.S. Supreme Court in Buckley versus Valeo in 1976,

  • This upheld the public disclosure requirements of funding of political parties, and  also upheld the limits on contributions to be received, as being constitutional. 

  • It held that to the extent that large contributions are given to secure a political quid pro quo from current and potential office holders

the integrity of the system of representative democracy is undermined. 

  • In 2014, the EU enacted a Regulation of the European Parliament and of the Council on the funding of European political parties and European political foundations

  • Under this Regulation, there were limits set on the value of donations that parties and foundations may accept per year and per donor.

  • While donations from natural persons under a certain value can be anonymised, all donations exceeding that value have to be disclosed. 

  • Large donations above a certain value require not just disclosure but immediate reporting to the authority

  • Further, political parties are also required to file annual financial statements of their revenue and expenditure, their list of donors and corresponding donations.

  • In the U.K., under the Political Parties, Elections and Referendums Act 2000, there are restrictions on the donations and loans a political party can accept, and requirements for the declaration of the source of the donations.

  • There are thus two distinct requirements that most legal regulations have for funding of political parties — complete disclosure of donors above certain minimal amounts and limits or caps on donations.

The road ahead

  • A key element of democracy is electoral justice.

  • Electoral justice ensures that every action, procedure and decision related to the electoral process is in line with the law and that the enjoyment of electoral rights are protected

  • An electoral justice system upholds the rule of law and guarantees the democratic principle of holding free, fair and genuine elections.

  • Electoral bonds which keep donor details undisclosed are violative of the democratic requirements of transparency and will undermine free and fair elections

  • For a healthy democracy, it is absolutely necessary that we have a law that ensures full publication of all donations made to political parties.

  • We need a separate legislation that mandates public disclosure of the identity of donors to political parties, candidates or political foundations which are above a certain nominal limit, the immediate reporting of large donations to the election commission.

  • Its mandating that political party accounts be made public and reported to the election commission, auditing of accounts of political parties by an independent authority. 

  • We need to make our democracy healthy by enacting legislation that regulates political party funding and mandates public disclosure.



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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Electoral Bonds UPSC NOTE
Electoral Bonds UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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