Electoral Bond Scheme completes 5 years
Recently the Electoral Bond Scheme has completed 5 years. It may be noted that the concept of Electoral Bonds was introduced in the Union Budget 2017-18.
- Electoral Bond is a bearer instrument in the form of a Promissory Note. It is also an interest free banking instrument.
- A citizen of India or a body incorporated in India is eligible to purchase the Bonds.
- Electoral Bonds can be issued, or purchased, for any denomination in multiples of 1,000, 10,000, 1, 00,000, 10, 00,000 and 1, 00,00,000 from designated branches of the State Bank of India.
- Between March 2018 and November 2022, 64.74 per cent electoral bonds have been redeemed.
- Political parties receiving donations through electoral bonds are required to encash them within 15 days.
- Failing to do so, the authorized bank deposits the electoral bonds in the Prime Minister’s National Relief Fund (PMNRF).
Eligibility of political parties to receive donations through Electoral Bonds:
Political parties must be registered under Section – 29A of the Representation of the People Act, 1951. Also, such parties should have secured at least one percent of the votes in the last general election (Lok Sabha or Legislative Assembly).
Importance of Electoral Bonds:
- Limits the use of cash in political donations,
- Puts an end to the formation of fake political parties,
- Protects the donor from political persecution,
- Curbs black money etc.
Concerns related to Electoral Bonds:
- Electoral bonds were challenged in the Supreme Court on the ground that electoral bonds do not bear the name of the payer. Also, this anonymity has implications for ethical funding.
- Further, no limit has been prescribed for the contribution of a company to a political party by way of electoral bonds.
Source – Indian Express