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Indian Polity

Electoral Bonds and Right to Information

  • 24 Dec 2020
  • 6 min read

Why in News

The Central Information Commission (CIC), the lead body for implementing the Right to Information Act 2005, has ruled that the disclosure of identity of electoral bond scheme donors will not serve any larger public interest and will violate provisions of the Act itself.

  • The electoral bond scheme allows citizens and corporates to buy monetary instruments from the State Bank of India (SBI) and donate them to political parties, who can redeem them for money.
  • According to the Association for Democratic Reforms, political parties have received a total of 12,452 electoral bonds worth Rs. 6210.39 crore till January 2020.

Key Points

  • The Commission observed that the disclosure of names of donors and the donees may be in contravention of provisions contained in section 8(1)(e)(j) of the RTI Act.
    • The said section exempts a public authority to give a citizen information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information.
      • A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons).
      • The information related to electoral bonds issued to political parties is held by SBI in a fiduciary capacity.
  • Earlier in January 2020, CIC had directed the Centre to reveal the names of electoral bond scheme donors who wanted their identities to remain confidential.
  • Concerns:
    • Anonymity:
      • Neither the donor nor the political party is obligated to reveal whom the donation comes from.
        1. In 2019, the Supreme Court held that all political parties who had received donations through electoral bonds must submit details to the Election Commission of India.
      • This undercuts a fundamental constitutional principle, the freedom of political information, which is an integral element of Article 19(1) (a) of the Constitution.
    • Black Money:
      • Elimination of a cap of 7.5% on corporate donations, elimination of requirement to reveal political contributions in profit and loss statements and also the elimination of the provision that a corporation must be three years in existence, undercuts the intent of the scheme.
        1. Any troubled, dying company can donate an unlimited amount anonymously to a political party giving them a convenient channel for business to round-trip their cash parked in tax havens for a favour or advantage granted in return for something.
    • Defeating Transparency:
      • It defeats the fundamental principle of transparency in political finance because it conceals from public scrutiny the identity of the corporates and moneybags.
    • Asymmetric Opacity:
      • The government is always in a position to know who the donor is because the bonds are purchased through the SBI.
      • This asymmetry of information threatens to colour the process in favour of whichever political party is ruling at the time.

Electoral Bond

  • Electoral Bond is a financial instrument for making donations to political parties.
  • The bonds are issued in multiples of Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore without any maximum limit.
  • State Bank of India is authorised to issue and encash these bonds, which are valid for fifteen days from the date of issuance.
  • These bonds are redeemable in the designated account of a registered political party.
  • The bonds are available for purchase by any person (who is a citizen of India or incorporated or established in India) for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government.
    • A person being an individual can buy bonds, either singly or jointly with other individuals.
    • Donor’s name is not mentioned on the bond.

Central Information Commission

  • Formation:
    • It was established by the Central Government in 2005, under the provisions of the Right to Information Act (2005). It is not a constitutional body.
  • Composition:
    • It shall consist of the Chief Information Commissioner (CIC) and such number of Central Information Commissioners not exceeding 10 as may be deemed necessary.
  • Appointment:
    • They are appointed by the President on the recommendation of a committee consisting of the Prime Minister as Chairperson, the Leader of Opposition in the Lok Sabha and a Union Cabinet Minister nominated by the Prime Minister.
  • Tenure:
    • The Chief Information Commissioner and an Information Commissioner shall hold office for such a term as prescribed by the Central Government or until they attain the age of 65 years, whichever is earlier.
    • They are not eligible for reappointment.
  • Power and Functions of CIC:
    • It is the duty of the Commission to receive and inquire into a complaint from any person regarding information request under RTI, 2005.
    • The Commission can order an inquiry into any matter if there are reasonable grounds (suo-moto power).
    • While inquiring, the Commission has the powers of a civil court in respect of summoning, requiring documents etc.

Source: IE

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