Electoral bonds 

Topic: Electoral bonds 

Introduction: The concept of electoral bond was introduced in the year 2017 for the first time in India by way of finance bill and it came into force in 2018.The donor or entities can purchase the electoral bond and can donate it to the registered political parties with benefit of keeping their identity as anonymity

Before the concept of electoral bonds there was something called an electoral trust, which was introduced in 2013 by the UPA Government. The difference between both these schemes is the Electoral bonds will ensure them. anonymity of the Donor. But whereas Electoral trust will reveal the information, from where does the funds come from the People or entity.

Features: The bonds shall be issued by the State Bank of India in denominations of INR 1,000, INR 10,000, INR 1 lakh, INR 10 Lakh and INR 1 Crore. The bearer shall be paid on demand and interest free. The purchase should be made by an Indian citizen or entity established in India. The purchase may be made on an individual basis or jointly with other people. The period of validity from the date on which it was issued shall be 15 calendar days.

Who can issue the electoral bonds?

State Bank of India can issue the Electoral bonds with the designated SBI branches.


Political parties may only apply for electoral bonds if they are registered under Section 29A of the Representation of the People Act, 1951, and if they have received at least 1% of the total votes cast in the most recent general election for the Legislative Assembly or the House of People.

Purchase and Encashment: Either digitally or with checks, Election Bonds may be acquired.

Encashment only via a political party-approved bank account.

Accountability and Transparency: Parties are required to reveal their financial account information to the Indian Election Commission (ECI).

Transparency is ensured using financial channels for donations.

Political parties are required to justify how they used the money they were given.

Benefits: Increased financial openness for political parties. Accountability for sharing the use of donations. Discouragement of cash transactions and Preservation of donor anonymity

Challenges: Electoral bonds are donations to parties that hide the identity of donors and beneficiaries. They can endanger the right of access to information, which is part of the freedom of expression according to Article 19 of the Constitution. Government access to donor information can threaten anonymity. This means that the government in power can use this information and prevent free and fair elections. The possibility of unauthorized donations that break the rules. The risk of crony capitalism and black money infusion. Crony Capitalism is an economic system characterized by close, mutually beneficial relationships between business leaders and government officials. Gaps in corporate transparency and donation limits. According to the Limited Liability Companies Act 2013, a company can only make a political contribution if its average net profit for the previous three financial years is 7.5%. The removal of this clause raised concerns about black money in political funding through fake companies.

Electoral bonds 
Electoral bonds 

What is the new SC verdict on electoral bonds? 

The SC asks ECI to produce information on the contributions made by electoral bonds until September 30, 2023. The Supreme Court of India on Thursday imposed a two-week time limit for the election commission to provide updated data as regards contributions paid by parties under electoral bonds scheme until September 30, 2023.

“It is possible to create an alternative system that eliminates the shortcomings of the current electoral bonds scheme. This cannot be used to justify bribes and other forms of exchange between those in positions of power and those who benefit from them. Chief Justice Chandrachud said to the government, “Businesses exist to conduct business, not to give to political parties.

Author: Potnuri Bala Nirguna Naga Sathwik, a Student of Sastra university

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