What is electoral bond ?

What is electoral bonds ?

Electoral bonds are financial instruments introduced in India as a means of making donations to political parties more transparent. They were first notified by the Government of India in January 2018.

Key features and aspects of electoral bonds include:

• Purpose: Electoral bonds are designed to enable donors, including corporates and individuals, to donate money to political parties in a more transparent and traceable manner.

• Issuance: Electoral bonds are issued by notified banks for specified denominations (e.g., ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore).

• Donor Anonymity: The identity of the donor is kept anonymous. The bonds are like promissory notes and do not carry the name of the donor.

• Validity and Use: Electoral bonds have a specified validity period during which they can be used to make donations. The bonds can be redeemed by registered political parties within a prescribed period.

• Redemption by Political Parties: Political parties can redeem the electoral bonds through their designated bank accounts. The bonds need to be deposited in a notified account within 15 days.

• Transparency: Electoral bonds aim to bring transparency to political funding by ensuring that the funds received by political parties are accounted for and reflect in their balance sheets.

• Legal Framework: The issuance and use of electoral bonds are governed by specific legal provisions and guidelines set by the Government of India.

Electoral bonds have been a subject of debate in India with differing viewpoints on their efficacy in promoting transparency in political funding. Proponents argue that it helps in formalizing political funding and curbing black money in elections, while critics raise concerns about the anonymity of donors and the potential for misuse.