Electoral Bonds
- Electoral Bonds are bearer instrument, sort of a Promissory Note and are an interest free banking instrument.
- Electoral Bond shall be issued for any value, in multiples of Rs 1000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore from the Specified Branches of the State Bank of India (SBI).
- The purchaser would be allowed to buy Electoral Bonds only on due fulfilment of all the extant KYC norms and by making payment from a bank account. It will not carry the name of payee.
- The Electoral Bonds would have a life of only 15 days during which it can be used for making donation only to political parties which has secured not less than one per cent of the votes polled in the last general election to the House of the People or to Legislative Assembly.
- Every political party in its returns will have to disclose the amount of donations it has received through electoral bonds to the Election Commission.
Concerns associated with electoral bonds
- Identity of Donor remains unknown goes against transparency of electoral funding
- No Upper Limit for Donation Increases Corruption and red tapism through undisclosed identity.
- Exemption allowed under RTI Act – Section 8(1)(e) , Results in Frivolous Donations from unaccounted source. Further it strengthens Corporate-Political Nexus and results in quid pro quo scenario post elections.
- Prohibition of donation to be provided by companies older than 3 years removed. This will lead to formation of Shell Companies to route funds as part of electoral finance.
- Restrictions on corporates for donating more than 7.5% of their average net profit over the previous 3 years to the Political parties removed. FCRA Amendment enables political parties to accept donations from foreign companies – Indian elections may have foreign influence.
