Decoding Electoral bond scam!

It is one of the biggest scam in the Indian history. This affects the political situation in India adversely. Lets understand it detail.

Running for office in any country requires a lot of money. Candidates and political parties need funds for things like advertising, rallies, transportation, and staff. Political Parties Don’t Run Businesses. Unlike businesses that sell products or services to make money, political parties don’t have such sources of income. So, they need to find other ways to get the money they need. One major source of money for political parties is donations from businesses. Businesses give money to political parties to help them run their election campaigns.

In return for these donations, businesses often expect the political party to do things that will benefit them if the party comes into power. This could be in the form of favorable laws, contracts, or other benefits. To make this process the idea of electoral bonds was introduced. An electoral bond is a financial instrument that allows individuals and businesses to donate money to political parties.

Before electoral bond come into the picture there was a problem in the system that data of donation publically known to all and if businesses funded to party and this will not come in power after election then other party may harass the company.

Introduction: In 2017, former Finance Minister Arun Jaitley introduced the electoral bond system to make political donations. SBI is the only bank authorized to handle electoral bonds.

SBI knows who buys the bonds (the donor) and which party receives them (the donee), but this information is not made public. Companies or individuals buy electoral bonds from SBI in denominations starting from 1000 rupees. The donor gives these bonds to the political party they want to support. The political party takes the bonds to SBI, and the bank deposits the money into the party’s account.

A company buys a 1000-rupee bond from SBI.

The company gives this bond to their chosen political party.

The political party presents the bond to SBI.

SBI deposits 1000 rupees into the political party’s bank account.

The system keeps donor identities secret to protect them from political retribution. However, it limits citizens’ right to information, as they can’t see who is funding which political parties which were unconstitutional.

According to Section 80GGB of the Income Tax Act 1961, any amount contributed to a political party is fully deductible from the donor’s taxable income. This means businesses can deduct the entire amount of their political donations from their income, reducing their tax liability.

Allegations against the Ruling Party and Government

Misuse of Government Agencies:

Allegations have been made that the ruling party is using government agencies like the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and others. These agencies are allegedly being used to pressure companies into making donations to the ruling party through electoral bonds.

It has been observed that companies targeted in raids by agencies like the ED subsequently make donations to the ruling party through electoral bonds. This creates a climate of fear among businesses, making them feel compelled to donate to avoid further harassment or legal troubles.

Favors in Return for Donations:

Infrastructure Projects: Another serious allegation is that the government is awarding infrastructure project tenders to companies that donate to the ruling party via electoral bonds. These tenders are allegedly being awarded regardless of whether the companies have the necessary experience or qualifications.

Also read blog on reality of biggest democracy https://www.globetact.com/uncategorized/the-reality-of-biggest-democracy-in-the-world/

This practice can lead to substandard project execution, corruption, and a lack of fair competition, undermining the integrity of the tender process. These allegations, if true, erode public trust in both the ruling party and the government institutions meant to operate impartially. The secrecy afforded by electoral bonds contributes to a lack of transparency, making it difficult for citizens to hold the government accountable. Such practices, where businesses are pressured to donate and rewarded with tenders, can undermine the democratic process and create an uneven playing field. The use of government agencies for political gain raises serious legal and ethical questions about the abuse of power and the integrity of public institutions.

A five-judge Constitution bench, led by Chief Justice of India D.Y. Chandrachud, has issued a directive to enhance the transparency of the electoral bond system. The bench has ordered the Election Commission to publish detailed information about electoral bond transactions. Specifically, the Election Commission must share the details provided by the State Bank of India (SBI) on its official website. This information is required to be made publicly accessible by 5 PM on March 15. This directive aims to ensure that citizens have access to information about political donations, thereby promoting greater transparency in the electoral process.

Total donations through electoral bonds amount to 12769.40 crores. The party-wise bifurcation of these donations is as follows:

Sr No.	Name of political party	Amount donated(in Crores)	Percentage
1.	BJP	6060	47.5%
2.	Trinamool Congress	1609	12.6%
3.	National Congress	1421	11.1%
4.	Bharat Rashtra Samithi	1214	9.5%

The data clearly shows that the ruling party, BJP, has received the highest amount of donations through electoral bonds.

Investigations by independent journalists suggest that the government has misused its power to raise funds for the ruling party. Many companies have been found to donate money to the party and then secure lucrative government contracts. Additionally, some of these companies have been found guilty of violating rules and regulations, but they receive a clean chit from the government after making donations. This lack of accountability means that companies may neglect quality control in their products, putting the health of the general public at risk. Furthermore, the government’s failure to penalize these companies affects government revenue, which could otherwise be used for the benefit of the public.