ELECTORAL BOND
Electoral bonds are a financial instrument introduced by the Government of India in January 2018 as a means to facilitate transparent political funding. These bonds are essentially interest-free bearer instruments that can be purchased by any Indian citizen or company incorporated in India from specified branches of authorized banks. The buyer can then donate these bonds to any eligible political party, which can encash them through designated bank accounts within a prescribed time frame.
The introduction of electoral bonds was announced by Arun Jaitley, who was serving as the Finance Minister of India at the time. The primary objectives cited for introducing electoral bonds were to promote transparency in political funding and to curb the influence of black money in elections. They were introduced by the Government of India via the Finance Act of 2017.
Electoral Bond Details:
Introduction: Electoral bonds were introduced as a way to cleanse political funding by promoting transparency and reducing the use of black money in elections.
Issuer: These bonds are issued by notified banks for specified denominations. The State Bank of India (SBI) is the authorized bank to issue these bonds.
Validity and Transferability: Electoral bonds have a validity period, typically of 15 days, during which they can be used to make donations to registered political parties. They are transferable like bearer bonds.
Anonymity: One of the key features is the anonymity of the donor. The identity of the donor is not disclosed either to the public or to the receiver (political party).
Disclosure by Political Parties: Political parties are required to report the details of bonds received in their contribution reports to the Election Commission of India.
Advantages:
Transparency: Electoral bonds were introduced to bring transparency to political funding by making the process of donations traceable through banking channels.
Reduced Black Money: By routing political donations through the banking system, the government aims to reduce the circulation of black money in elections.
Anonymity for Donors: The anonymity feature allows individuals and corporations to support political parties without fear of retribution or favoritism.
Convenience: Electoral bonds provide a convenient way for individuals and entities to donate to political parties without directly dealing with cash.
Disadvantages:
Lack of Transparency: While electoral bonds promote transparency to some extent, the anonymity feature has been criticized for masking the true sources of political funding.
Potential for Money Laundering: Critics argue that the anonymity provided by electoral bonds could be exploited for money laundering or funneling illicit funds into political parties.
Limited Accountability: Political parties are not required to disclose the identity of donors, which undermines the accountability of political funding.
Exclusion of Small Donors: Electoral bonds primarily cater to large donors and corporations, potentially excluding small donors from participating in the political funding process.
Controversies:
Anonymity Concerns: The anonymity provided by electoral bonds has been a major source of controversy. Critics argue that it allows for opaque political funding and prevents transparency in the electoral process.
Bypassing Electoral Reforms: Some argue that electoral bonds undermine previous electoral reforms aimed at increasing transparency and reducing the influence of money in politics.
Legal Challenges: The legality of electoral bonds has been questioned, with concerns raised about their compatibility with the principles of democracy and fair elections.
Political Influence: There are concerns that electoral bonds could be used by corporations and wealthy individuals to exert undue influence on political parties and policy-making.
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