Electoral Reforms In India

In news: Electoral Bond Scheme


From UPSC perspective, the following things are important :

Prelims level: Electoral Bond Scheme

Mains level: Read the attached story

Central Idea

  • The government has announced a fresh tranche of electoral bond sales for a 10-day period starting through the authorised branches of State Bank of India across the country.

About the Electoral Bond Scheme

Definition Banking instruments for political party donations with donor anonymity.
Launch 2017-18 Union Budget
Purchase Method Available to Indian citizens and Indian-incorporated companies from select State Bank of India branches. Can be bought digitally or via cheque.
Donation Process Purchasers can donate these bonds to eligible political parties of their choice.
Denominations Available in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore.
KYC Requirements Purchasers must fulfill existing KYC norms and pay from a bank account.
Lifespan of Bonds Bonds have a 15-day life to prevent them from becoming a parallel currency.
Identity Disclosure Donors contributing less than ₹20,000 need not provide identity details like PAN.
Redemption Electoral Bonds can be encashed only by eligible political parties through an Authorized Bank.
Eligibility of Parties Only parties meeting specific criteria, including securing at least 1% of votes in the last General Election, can receive Electoral Bonds.
Restrictions Lifted Foreign and Indian companies can now donate without disclosing contributions as per the Companies Act.
Objective To enhance transparency in political funding and ensure funds collected by political parties are accounted or clean money.


Also read:

Challenging the Electoral Bond Scheme

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