What are electoral bonds? The concerns related to electoral bonds overweigh its benefits. Critically analyze.

MODEL ANSWER: An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India. The citizen can then donate the same to any eligible political party of his/her choice. These bonds can be issued in multiple values of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore, these bonds can only be encashed by political parties, which had secured at least 1 percent of the votes polled in the most recent Lok Sabha or state election.
Why were electoral bonds introduced in India? According to the central government, electoral bonds were being introduced to ensure that all the donations made to a party would be accounted for in the balance sheets without exposing the donor details to the public. The government said that electoral bonds would keep a tab on the use of black money for funding elections. In the absence of electoral bonds, donors would have no option but to donate by cash after siphoning off money from their businesses.
HOW CONCERN OVERWEIGHTS BENEFITS? 1. Voter’s right to know: An essential problem with electoral bonds is that it removes transparency and accountability in political funding. Voters have the right to know which business enterprise or businessman is funding their political parties and if such funding has an influence on policies framed by governments formed by these parties. 2. Asymmetrical Opaque: The bonds are purchased through the SBI, the government is always in a position to know who the donor is. This asymmetry of information threatens to colour the process in favour of whichever political party is ruling at the time. 3. Transparency: It will also defeat the fundamental principle of transparency in political funding. It will conceal from public scrutiny the identity of the corporates and moneybags who contribute huge amounts to political parties, especially to the ruling parties resulting in more opacity, making it a convenient channel for black money. 4. Provisions such as elimination of a cap of 7.5% when it comes to corporate donations, elimination of the requirement that corporations must reveal political contributions in profit and loss statements, and the elimination of the requirement that a corporation must be three years in existence undercuts the intent of the scheme and thus any troubled companies, dying companies, shell companies can donate to an unlimited amount, and do so anonymously. 5. Round tripping of black money: Electoral Bond Scheme could become a convenient channel for businesses to round-trip their cash parked in tax havens to political parties for a favour or advantage granted in return for something. 6. Apex Agencies being ignored: Non- disclosure to Election Commission While RPA,1951 specifies that donations received by political parties in sums greater than Rs 20,000 be disclosed to the tax authorities, the Finance Bill,2017 explicitly provides an exemption from this clause to electoral bonds. This mars the very purpose of cleaning up electoral finance.
The government had to amend the RBI act in order to issue these bonds as bearer bonds have the characteristics of currency notes which are issued solely by the central bank. The amendment, however, will amount to fragmenting of the notes issuing power of the RBI particularly at a time when its autonomy is being questioned over its tacit acceptance of Demonetization.

BENEFITS OF ELECTORAL BOND SCHEME 1. Transparency in Political Funding: Electoral Bond provide a transparent mechanism for political parties to raise finances in order to meet election expenditures. Since the donor buys electoral bonds after furnishing KYC details to the bank, it is a more transparent tool than cash. The ADR (Association for Democratic Rights) states that 69% of political funding in India comes from unknown sources. In this context, Electoral bonds provide an alternate, transparent route for parties to raise funds. 2. Anonymity of Donor: It also preserves the anonymity of donors which is essential as they need to be protected against any post-poll intimidation or harassment by political opponents. 3. Besides, the life of these bonds is only 15 days which limits the scope for misuse. Also, political parties are supposed to disclose the contributions received through electoral bonds to the Election Commission. Therefore, the bonds help in cleaning up the system of electoral finance in India. 4. Tax Advantage to donors: The bonds also offer a tax advantage to donors, thus making them an attractive tool for political donations.
WAY FORWARD 1. National Election Fund can be created by the donations given by individuals and corporations. Such a fund could be declared as the only channel through which businesses and individuals can contribute to political parties. The Election Commission can decide how the donations are shared among parties. 2. Another alternative can be the implementation of the Indrajit Gupta Committee (1998) report that endorsed state funding of elections, in order to establish a fair playing field for parties with less money. However, the mechanics of this process need to be carefully worked out to establish the allocation of money to the national parties, State parties, and independent candidates.

Public interest litigation has historically been an innovative judicial procedure for enhancing the social and economic rights, is now seen as a concern related to the separation of powers, judicial capacity, and inequality. Discuss.

Demand of the Question: Introduction: Briefly write about PIL Body: PIL serves the public interest in enhancing social and economic rights.
Concerns related to PIL, give relevant cases and examples. Conclusion: Reforms needed to make PIL effective.
Public Interest Litigation means a legal action initiated in a court of law for the enforcement of public interest or general interest in which the public or class of the community have pecuniary interest or some interest by which their legal rights or liabilities are affected. The introduction of PIL in India was facilitated by the relaxation of the traditional rule of ‘locus standi’. Thus, in a PIL, any member of the public having ‘sufficient interest’ can approach the court for enforcing the rights of other persons and redressal of a common grievance.


  1. Powerful tool: Public Interest Litigation (PIL) is a powerful tool in the hands of vigilant citizens of the country to espouse the cause of the marginalized and oppressed. Example: Hussainara Khatoon Vs State of Bihar Supreme Court upheld that the prisoners should get the benefit of free legal aid and fast hearing. Because of this case 40,000 prisoners, whose suits were pending in the court, were released from the jail.
  2. Democratization of access to justice: This is done by relaxing the traditional rule of locus standi. Any public-spirited citizen or social action group can approach the court on behalf of the oppressed classes. Courts’ attention can be drawn even by writing a letter or sending a telegram (People’s Union for Democratic Rights vs. Union of India).
  3. Inexpensive legal remedy: The citizen can find an inexpensive legal remedy because there is only a nominal fixed court fee involved in this.
  4. Remedial in Nature: It indirectly incorporated the principles enshrined in part IV of the Constitution of India into part III of the Constitution. It changed the procedural nature of Indian law into a dynamic welfare one. Example: Bandhua Mukti Morcha v/s Union of India, SC directed the State of Uttar Pradesh to eliminate the carpet industry’s use of child labour.
  5. Prioritization of rights: especially in cases of conflict of rights, increasingly supporting vulnerable sections of society over majoritarian rights. Example: Naz Foundation v. Government of NCT of New Delhi decriminalized homosexuality
  6. Disturbing the constitutional balance of power:
    ● Although the Indian Constitution does not follow any strict separation of power, it still embodies the doctrine of checks and balances.
    ● Judiciary on several occasions did not exercise self-restraint and moved on to legislate, settle policy questions, take over governance, or monitor executive agencies. Example: Liquor ban case, CBI inquiry in Coalgate scam, etc. 2. Overburdened Judiciary: As of 2018, there are over three crore cases pending across the Supreme Court, the High Courts, and the subordinate courts. Frivolous PILs adds to the judicial burden. Example: A 160-page PIL to lower marriageable age of men from 21 to 18.
  7. Beneficiary inequality: PILs original intent was to secure justice for the poor is now being used by corporates, this results in more benefits from PIL for them than the poor. Example: Supreme Court pointed out how public interest litigation has become an “industry of vested interests”
  8. Policy area inequality: the concern is that judges, because of their social class and ideological dispositions, are more alert to the concerns of the middle classes and the wealthy.PILs pertaining to issues of the middle class get immediate attention. Example: Issue of Undertrials, displacement of tribals.
    PIL is a radical procedural innovation that allows the court to overcome conventional, constitutional norms of the separation of powers, dilute procedural norms and devise unique and far-reaching institutional remedies. There is a need for the judiciary to maintain self-restraint on advocating PILs, which should be limited to important questions of socio-economic and political justice.


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