Electoral bonds have been introduced to promote transparency in funding and donation received by political parties, the government told the Supreme Court on Thursday.
“They [bonds] can be encashed by an eligible political party only through their accounts with authorised banks. The bonds do not have the name of the donor or the receiving political party and only carry unique hidden alphanumeric serial numbers as an in-built security feature,” a 21-page affidavit said. The government described the scheme, introduced on January 2 last year, as an “electoral reform” in a country moving towards a “cashless-digital economy.”
Yechury’s plea
The government was responding to a petition filed by the CPI(M) and party secretary general Sitaram Yechury to strike down the ‘Electoral Bond Scheme 2018’ and amendments in the Finance Act, 2017, which allow for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding.”
Denying the charge, the government said “the scheme envisages building a transparent system of acquiring bonds with validated KYC and an audit trail.” It said a limited window and a very short maturity period would make misuse improbable. “The electoral bonds will prompt donors to take the banking route to donate, with their identity captured by the issuing authority. This will ensure transparency and accountability and is a big step towards electoral reform,” it said.
The electoral bond, a bearer instrument, can be bought for any value and has a life of only 15 days. Bonds will be available for purchase only for 10 days in designated months.
