The Supreme Court on Friday ordered all political parties to submit details of electoral bonds which they received till May 15 to the Election Commission latest by May 30.
The electoral bond is a source of political funding or donations made by voters to parties.
Let's dwell a little deeper on electoral bonds and issues surrounding it:
What are electoral bonds?
An electoral bond is a bearer instrument, such as a Promissory Note and similar to a banknote that is payable to the bearer on demand. The instrument is also free of interest and it can be purchased by any citizen of India or a body incorporated in India.
Who launched the Electoral Bond Scheme?
The scheme was announced in the Budget 2017 by Finance Minister Arun Jaitley, with the aim of cleansing the system of political funding in the country and keeping with the Modi government's motive of a cashless economy.
What is the purpose of electoral bond?
The electoral bonds are solely used for the purpose of political funding where voters or companies or any institution incorporated in the country can help fund or donate the bonds to their party of choice which can later be encashed by party's verified account within 15 days. The political parties use the funds to conduct rallies, campaigns, among others.
How can electoral bonds be issued?
The bonds can be issued in multiples of 1,000, 10,000, 1 lakh, 10 lakh and 1 crore and will be available in specific branches of State Bank of India (SBI). The donor is required to have completed his or her KYC, in order to purchase these bonds.
What are some of the other norms of electoral bonds?
Firstly, the political party registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) is required to achieve at least one percent votes polled in the most recent elections, be it State or Lok Sabha.
The party also has to have a verified account by the Election Commission in order to use the electoral bonds for its funding. The EC is required to keep a close eye on the funding via these bonds through this account. This is the only account the party can use for the purpose.
The electoral bonds will be valid for 15 calendar days from the date of issue and no payment will be made to any payee political party if the bond is deposited after the expiry of the validity period.
The bonds will only be available for 10 days at the beginning of every financial quarter and the dates are announced by the government.
When were the electoral bonds issued during 2019 Lok Sabha elections?
The Finance Ministry, on February 28, authorized SBI to issue and encash Electoral Bonds through its 29 Authorised Branches in the months of March, April and May 2019. The bonds are sold in three tranches from March 1-15, April 1-20 and May 6-15.
A PIL filed by the NGO Association of Democratic Reforms (ADR) sought for a stay on the scheme as the scheme said it will not disclose the names of donors to ensure transparency and privacy of the donors. The details of the donor will be exclusive to the bank. However, ADR has challenged this, saying, the system will only be transparent if the names of the donors are made public.
Why are electoral bonds being tested for its constitutional validity?