Arun Jaitley notifies electoral bonds for political donations

Note4students

Mains Paper 2: Governance | Citizens charters, transparency & accountability & institutional & other measures

From UPSC perspective, the following things are important:

Prelims level: Electoral bonds, Budget, bearer instrument, promissory note

Mains level: Ensuring transparency in donations to political parties


News

Basic contours of the electoral bonds scheme announced

  1. Details such as denominations, validity, and eligibility of the purchasers were announced by Finance minister for the electoral bonds scheme announced during the 2017 Budget 
  2. Electoral bonds will allow donors to remain anonymous and pay political parties using banks as intermediaries

Highlights of provisions

  1. Electoral bonds would be a bearer instrument in the nature of a promissory note and an interest-free banking instrument
  2. A citizen of India or a body incorporated in India will be eligible to purchase the bond
  3. Electoral bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India
  4. The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
  5. The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency)
  6. They can be used to make donations to registered political parties that have secured not less than 1% of the votes polled in the last election to the Lok Sabha or Assembly
  7. The bonds shall be available for purchase for a period of 10 days each in the months of January, April, July, and October, with an additional 30 days to be specified by the Central government in the year of a general election
  8. The bond shall be encashed by an eligible political party only through a designated bank account with the authorized bank

Why is the name of donor not being disclosed?

  1. Bonds would get reflected in the balance sheet of the donors
  2. Currently,  for a very large part of donation coming to political parties by the donors, quantum and source is not known
  3. The past experience has shown that once the names are disclosed, there is a tendency to shift to cash donations
  4. Bonds will ensure cleaner money coming from donors, cleaner money coming to political party and ensure significant transparency
Electoral Reforms In India
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