Electoral Bonds Scheme 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 Union Government is finalising electoral bonds scheme in order to bring greater transparency in funding of political parties. The scheme was announced in 2017-18 Union Budget as part of certain electoral funding reforms. It will make India first country in the world to have such unique bonds for electoral funding.
Need for such Scheme
According to Association for Democratic Reforms (ADR), most political parties use lax regime on donations to accept cash donations from anonymous sources. Nearly 70% of Rs. 11,300 crore in party funding over an 11-year period came from unknown sources. The electoral bonds will prompt donors to take banking route to donate, with their identity captured by the issuing authority.
Electoral Bonds Scheme
Under the scheme, proposed electoral bonds will resemble promissory note and not an interest-paying debt instrument. These bonds will only be issued by notified authorised bank and can only be bought using cheques or digital payments. These bonds purchased by donor will be given to political party for fixed period of time.
The electoral bonds will not carry name of donor and routing of money through banks will ensure that only tax paid money comes into political system. To avail benefit of this scheme, it is mandatory for all political parties to notify their bank account to the Election Commission of India. Political party using their notified bank account can convert these donated electoral bonds into money.