Electoral Bonds

Why in news?

Central Information Commission (CIC) has upheld the State Bank of India order of not disclosing any information about electoral bonds.

What is electoral bond scheme?

• It is a promissory note which can be bought by any Indian citizen or company incorporated in India from selected branches of SBI.
• They can purchase the bond digitally or through cheque & it is free of interest.
• The citizen or corporate can then donate the same to any eligible political party of his/her choice.

What is the issue with the scheme?

• It hides the identity of the donors, recipient, the amount of donation thereby creating unholy nexus between corporates & political parties.
• This goes against best practices of electoral democracy & promotes arbitrariness.
• It is also in contravention with the individual’s freedom of speech and expression.
• In PUCL vs Union of India case, Supreme Court held that the voter’s freedom of speech & expression includes right to secure information about expenses of the party & the candidate.
• Despite this court order, SBI refused to reveal information about the details of donor, amount of donation in the electoral bond.

Why did SBI refuse to disclose the information?

• It has relied on Section 8 of the RTI Act which exempts disclosing the information.
• It says that information cannot be disclosed when it is held under fiduciary capacity & when no public interest involved.
• But SBI has interpreted in a very narrow sense.
• Section 8(2) directs that when public interest outweighs any harm to protected interests then the information can be accessed.
• This order of SBI is upheld by CIC which is in contrast with its previous order.

What was CIC’s previous order?

• In its earlier order CIC said that political parties are deemed to be public authorities under the RTI Act.
• The funds received by the political parties are necessary for the voters to understand the financing & functioning of parties.
• The shareholders of the company will also be interested to know about the donations by corporate entities.
• Therefore, the failure of the CIC in appreciating the present issue defeats the objective of the RTI Act.

What will happen now?

• A batch of petitions filed by the Association for Democratic Reforms and the Communist Party of India (Marxist) are under subjudice.
• Therefore, the CIC’s decision, if carried to the Supreme Court on appeal, will be heard together.

What can be done now?

• Transparency and accountability must be established in the election process.
• For this there must be public scrutiny of parties & political candidates.

• It is necessary to know the donation received by political parties & the manner their expenses.
• This ensures there is free and fair democratic process.

• This view is upheld by the Election Commission in an affidavit filed before the Supreme Court.
• Suppressing the knowledge about political financing breaks the basic bonds of democracy which holds the country together.

Source: The Hindu