Ahead of the assembly elections in Gujarat and Himachal Pradesh, the Finance Ministry has widened the window for purchase of the anonymous ‘electoral bonds’ that  masked the identity of donors and enabled corporates to make contributions to the political parties without any limits.

The Department of Economic Affairs (DEA) in the Finance Ministry has amended the Electoral Bond Scheme 2018 to empower the Centre to specify an additional ‘15 days’ period where the bonds would be available for purchase in the year of general elections to legislative assembly of States and union territories with legislature (like Puducherry).

Soon after this latest amendment, the Finance Ministry has authorised the State Bank of India to issue and encash electoral bonds through its 29 authorised branches from November 9-15 this year. While Himachal Pradesh goes to polls on November 12, Gujarat assembly elections are slated from December 1-5 in two phases and the results are to be declared on December 8.

A representative image

A representative image

In 2018, the Electoral Bond Scheme had provided a window for purchase by any person for a period of ten days (to be specified by the Centre) each in the months of January, April, July and October. The scheme also provided an additional 30 days specified by the Centre in the year of general elections to the Lok Sabha.

Now, a similar window of additional period (15 days in this case) is being introduced in the year of general elections to legislative assembly of States and union territories with legislature. 

With State assembly elections being a frequent activity every year, it can be inferred that this 15 days additional purchase window for electoral bonds is going to be permanent feature every year, say economy watchers.

A major hit

The ‘electoral bonds’ scheme became a major hit among Corporate India after amendments were made in 2017 promising full anonymity and the existing limit for political donations at 7.5 per cent of the average profits was done away  with. Corporates were also exempted from disclosing the names of the recipients in their balance sheets.

Legal experts see the latest finance ministry move as “profound” as it brings the facility of additional period of bond availability for elections to State legislatures on par with existing Lok Sabha dispensation (30 additional days). This will   come in handy for political parties in getting corporate donations ahead of the upcoming assembly elections in Gujarat and Himachal Pradesh, say political observers. 

Interestingly, the Supreme Court is presently seized of the petitions challenging various aspects of the electoral bond scheme and its anonymous nature. The government has been contending that the scheme helps to eliminate black money in electoral funding and any apprehensions of money  laundering are ill-founded. However, critics argue that masking the identity of the contributors bodes ill for democracy.