ELECTORAL BONDS

About: 

• Electoral Bond is a financial instrument for making donations to political parties. The party can convert these bonds back into money via their bank accounts. 
  
  
• Each political party would have to open designated accounts for this purpose, with banks mandated by the RBI. 
  
  

Features of Electoral Bond Scheme 2018: 

• Government of India notified the Electoral Bond Scheme 2018 in January 2018. 
  
  
• As per provisions of the Scheme, Electoral Bonds may be purchased by a person, who is a citizen of India or incorporated or established in India. A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals. 
  
  
• Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than one per cent of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly, shall be eligible to receive the Electoral Bonds. 
  
  
• The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank. 
  
  
• It may be noted that Electoral Bonds shall be valid for 15 calendar days from the date of issue and no payment shall be made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period. 
  
  

Debate: 

• Arguments in favour: It will lead to greater transparency and accountability in political funding, while preventing future generation of black money as any payments will be recorded by banks. 
  
  
• Arguments against: While the identity of the donor is captured, it is not revealed to the party or public. So, transparency is not enhanced for the voter.