• The electoral bond scheme was announced in Union Budget 2017 with an aim for increasing transparency in political funding.
• It is designed to be a bearer instrument like a Promissory Note — in effect, it will be similar to a bank note that is payable to the bearer on demand and free of interest.
• It can be purchased by any citizen of India or a body incorporated in India.
• It can be bought by the donor with a KYC-compliant account. Donors can donate the bonds to their party of choice which can then be cashed in via the party’s verified account within 15 days.
• It will not bear the name of the donor.
• The bonds will be available for purchase for a period of 10 days each in the beginning of every quarter.
• The bonds will be issued in multiples of ₹ 1,000, ₹ 10,000, ₹ 1 lakh, ₹ 10 lakh and ₹ 1 crore.
Advantages of the Electoral Bonds
- Bringing transparency in Electoral donations
- Protecting the donors from harassment
- Amount of donation in cash capped to Rs. 2000/-.
- No disclosure of information to third party as RBI only knows both Donor and Receiver
- Bringing political funding under Tax Purview (69% of Political fund is from unknown sources)
- Increased chances of Round Tripping from Tax Havens to political parties
- Lobbying of Government Policies in favour of Donors
- Misuse of RBI to malign or harass political opponents by Government.
- Proper safeguards against sharing information to Government.
- Setting up of National Electoral Fund for distributing money to Political Parties.
- Removing the concessions given to Political Parties from State/Central Governments.