Electoral Bonds Scheme Current Affairs - 2019
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Union Ministry of Finance recently announced the launch of 11th tranche of electoral bonds sale starting from 1-10 July. This is 1st issuance of electoral bonds after conclusion of 17th general elections and formation of new government.
What are Electoral Bonds?
Electoral bonds are being pitched as an alternative to cash donations made to political parties in a bid to bring transparency in political funding.
Background: The government notified the Electoral Bond Scheme in January 2018. As per the scheme, electoral bonds may be purchased by a person who is a citizen of India or an entity incorporated or established in India. A person can buy electoral bonds, either single or jointly or even with other individuals.
Exclusive Issuer: State Bank of India (SBI) is the only authorised bank to issue electoral bonds. In XI phase of electoral bonds sale, SBI has been authorised to issue and encash electoral bonds through its 29 authorised branches with effect from 1 to 10 July.
Eligibility: Those registered political parties that secured not less than 1% of votes polled in former election of Lok Sabha or legislative assembly will be eligible to receive electoral bonds.
Validity: Electoral bonds are valid for 15 calendar days from date of issuance and no payment is made to any payee political party if bonds are deposited after expiry of validity period. Electoral bond deposited by an eligible political party in its account will be credited on very same day.
Previous Tranche: The sale of 1st batch of electoral bonds was from 1-10 March 2018, 2nd phase 2-10 April, 3rd phase 1-10 May, 4th tranche 2-11 July, 5th 1-10 October, 6th phase 1-10 November, 7th phase 1-10 January and 8th phase 1-15 March, 9th phase 1-20 April and 10th between 6-15 May 2019.
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.