Govt. defends electoral bonds scheme in SC
15, Mar 2019
Prelims level : Parliament Mains level :
- Electoral bonds have been introduced to promote transparency in funding and donation received by political parties.
- 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.
- The government described the scheme, introduced on January 2 last year, as an “electoral reform” in a country moving towards a cashless-digital economy.
Electoral Bonds Scheme:
- The electoral bonds scheme was announced in Union Budget 2017 with an aim for increasing transparency in political funding.
- It makes India first country in the world to have such unique bonds for electoral funding.
- These bonds are bearer instrument in nature of promissory note and interest-free banking instrument.
- It aims at rooting out current system of largely anonymous cash donations made to political parties which lead to generation of black money in the economy.
- These electoral bonds can be bought for any value in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore after fulfilling all existing Know Your Customer (KYC) norms and making payments from bank account.
- It will not carry name of payee.
- The bond deposited by any eligible political party to its account shall be credited on the same day.
- No payment shall be made to any payee political party if bond is deposited after expiry of validity period.
- Eligible political parties can encash electoral bonds only through their bank accounts.
- Electoral Bonds may be purchased by only citizen of India.
- An individual can buy Electoral Bonds, either singly or jointly with other individuals.
- Electoral Bonds are valid for fifteen calendar days from the date of issue.
- Only registered political parties, that have secured not less than 1% of votes polled in last election of Lok Sabha or legislative assembly of state, will be eligible to receive electoral bonds.
- The cash donation has been capped at Rs. 2000 and beyond that donations are via electoral bonds.