ELECTORAL BONDS (Syllabus: GS Paper 2 – Polity)

Context: Recently, the Supreme Court announced that it will deliver its verdict on the validity of electoral bonds before the 2024 general elections commence, addressing concerns about their potential role as catalysts of corruption.

Electoral Bonds

• About: Electoral bonds are bearer instruments, akin to promissory notes, available for purchase by any Indian citizen or an Indian-incorporated company.
• Introduced: In 2018 by the Union government.
• Donation Option: Citizens or corporations can buy these bonds and subsequently donate them to any eligible political party of their choice.
• Resemblance to Bank Notes: Electoral bonds are akin to banknotes and are payable to the bearer on demand, devoid of any interest.
• Digital or Cheque Purchase: Individuals and parties can acquire these bonds either digitally or through a cheque.
• Eligibility: Only political parties registered under Section 29A of the Representation of the People Act, 1951, and those securing at least 1% of votes in the last general election to the House of the People or the Legislative Assembly of the State can receive electoral bonds.
• Encashment Procedure: Political parties can encash these bonds solely through a designated bank account with the authorized bank.
• Mandatory Disclosure: Political parties must disclose the amount received via electoral bonds to the Election Commission.
• Donor Anonymity: Importantly, electoral bonds do not bear the name of the donor, ensuring the anonymity of the contributor.