Context
Recently, the government approved the issuance of the 20th tranche of electoral bonds that will be open for sale by SBI from April 1 to 10 for the upcoming elections.
What is the electoral bond?
It is a type of promissory note that was brought to bring transparency in the funding of political parties at the time of elections. The bond is bought by the Indian citizen, company, or any corporation established in India and then can donate to an eligible political party of their choice. These bonds are similar to banknotes that a party can be redeemed in cash by the political party's leaders.
Key features
- The electoral bond was introduced in Feb 2017 with the finance bill 2017as an alternative to cash donations in which all the donations made to a party would be accounted for in the balance sheets.
- This bond does not bear the name of the donor which eliminates a type of any type of favoritism after the winning of the party.
- The State bank of India is the only bank that has been authorized to issue and encash electoral bonds through its 29 branches.
- Any political party registered under section 29A of the Representation of the People Act,1951 and secured at least one percent of the votes polled in the last general election or assembly election would be eligible to receive the bond.
- These bonds remain valid till 15 days from the date of issuance and no payment can be made to any payee party after the expiry of the validity period.
