THE NEWS
- The central government has announced the details of political funding that can be donated by donors (Indian citizen or a body incorporated in India) to a registered political party through electoral bonds.
- The scheme was earlier announced in Union Budget, 2017.
WHAT ARE ELECTORAL BONDS
- Electoral bond is a financial instrument issued by a notified bank for making adonation to political parties.
- Electoral bonds are like bearer cheques, the bank will remain the custodian of the donor’s funds until the political party redeems the bond.
DETAILS OF ELECTORAL BONDS
- Value of the bonds: The electoral bonds can be purchased in multiples of Rs 1,000. Rs 10,000, Rs 10 lakh, and Rs 1 crore.
- Bank: Electoral bonds can be purchased from any of the notified branches of SBI and purchaser can only pay from their KYC-compliant bank account.
- Life: The life of electoral bonds will be 15 days and they can be enchased only by a registered political party through a designated bank account.
- Donation to only registered party: The donation can only be made to apolitical party registered under section 29A of the Representation of the People Act, 1951.
- Tax exemption: The investment made in purchasing electoral bonds will be exempted from tax.
DRAWBACKS OF THE BONDS
- The move could end up bringing in darkness in political funding as there is lack of disclosure requirements for purchasing bonds or no need to mention the name of the payee.
CONCLUSION
The electoral bond scheme will bound political parties to file returns to the Election Commission (EC) on political funds received by them, this will lead to transparency in Indian politics and ultimately lead to areduction in corruption.
