Electoral bonds Current Affairs
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The GoI has notified the sale of electoral bond by SBI through its 29 authorized branches from 1.11.2018 to 10.11.2018. 29. These SBI branches are in cities like New Delhi, Gandhinagar, Chandigarh, Bengaluru, Bhopal, Mumbai, Jaipur, Lucknow, Chennai, Kolkata and Guwahati. The concept of electoral bond was initiated in Union Budget 2017.Later on Electoral bond scheme 2018 was introduced.
What is Electoral Bond?
An Electoral Bond is just like a promissory note that will be payable to bearer on demand and free of interest. It can be purchased by a citizen of India or anybody incorporated in India.
Benefits of an Electoral bond
- Transparent political funding
- Protecting donors from harassment
- No disclosure of information to third parties
- Achieving Digital India vision
- Bringing donations under tax preview
Electoral Bonds Scheme 2018
The scheme introduced that the a party registered under the Representation of People’s act, 1951 and securing not less than one percent of the votes polled in the preceding election is entitled to receive the electoral bonds. Electoral Bonds may be purchased by only citizen of India. An individual can buy Electoral Bonds, either singly or jointly with other individuals. The bonds can only be encashed by an eligible political party only through a bank account with the authorized bank. Electoral Bonds are valid for fifteen calendar days from the date of issue. If the Electoral Bond is deposited after expiry of the validity period, no payment is made to any Political Party. The Electoral Bond deposited by an eligible Political Party in its account is credited on the same day. The bonds are issued in multiples of 1000, 10000, 1lakh, 10 lakh, 1 crore. The cash donation has been capped at Rs. 2000 and beyond that donations are via electoral bonds.
The first sale of electoral bonds will start from March 1, 2018 for period of 10 days at four main branches of State Bank of India in Mumbai, Chennai, Kolkata and New Delhi. These bonds will have a life of 15 days, and citizen of India or an entity incorporated or established in the country can purchase them.
The electoral bonds scheme was announced in Union Budget 2017 with an aim for increasing transparency in political funding. It makes India first country in the world to have such unique bonds for electoral funding. These bonds are bearer instrument in nature of promissory note and interest-free banking instrument. It aims at rooting out current system of largely anonymous cash donations made to political parties which lead to generation of black money in the economy.
These electoral bonds can be bought for any value in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore after fulfilling all existing Know Your Customer (KYC) norms and making payments from bank account. It will not carry name of payee.
The bond deposited by any eligible political party to its account shall be credited on the same day. No payment shall be made to any payee political party if bond is deposited after expiry of validity period. SBI has been allowed to issue and encash these bonds initially at its four authorised branches.
Eligible political parties can encash electoral bonds only through their bank accounts. Only registered political parties, that have secured not less than 1% of votes polled in last election of Lok Sabha or legislative assembly of state, will be eligible to receive electoral bonds.
The sale of electoral bonds comes ahead of elections in number of states through year. Karnataka is likely to go to polls in April-May followed by elections in Madhya Pradesh, Chhattisgarh, Rajasthan and Mizoram later in year.