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Electoral Bond

Articles
  • Electoral Bond Scheme was announced during the 2017 Budget and government had notified the Electoral Bond Scheme on 2 January this year. 
  • Electoral Bond is a financial instrument for making donations to political parties. 
  • Electoral Bond is an effort made to cleanse the system of political funding in India by bringing transparency in political funding.
  • These are interest-free bearer instruments (like Promissory Notes) instrument issued on a non-refundable basis and are not available for trading.
  • A citizen of India or a body incorporated in India will be eligible to purchase the bond.
  • It would be issued/purchased for any value, in multiples of Rs.1,000, Rs.10,000, Rs.1,00,000, Rs.10,00,000 and Rs.1,00,00,000 from the Specified Branches of the State Bank of India (SBI).
  • Electoral Bond will be available for purchase from the State Bank of India within a designated window of 10 days each in the beginning of every quarter, i.e. in January, April, July and October as specified by the Central Government. An additional period of 30 days shall be specified by the Central Government in the year of Lok Sabha elections.
  • The electoral bonds will not bear the name of the donor. In essence, the donor and the party details will be available with the bank, but the political party might not be aware of who the donor is. The intention is to ensure that all the donations made to a party will be accounted for in the balance sheets without exposing the donor details to the public.
  • “The bond shall be encashed by an eligible political party only through a bank account with the authorised bank,” the ministry said, adding that a person being an individual can buy electoral bonds, either singly or jointly, with other individuals.
  • Initially, the bonds will be sold at main branches of SBI in four metro cities —New Delhi, Mumbai, Kolkata and Chennai.
  • As per Section 29C(1) of The Representation of People Act, 1951, the political party needs to disclose the details of non-governmental corporations and persons who donate more than Rs. 20,000 to it in a financial year. Vide the Finance Bill 2017, it has been specified that no report needs to be prepared in respect of the contributions received by way of an electoral bond.
  • This reform is expected to bring about greater transparency and accountability in political funding, while preventing future generation of black money.

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