Electoral bonds can be bought by any citizen of India or entity incorporated or established in the country to make donations to political parties
The sale of the 29th tranche of electoral bonds started today, November 6. The latest round of electoral bonds, which comes amid assembly elections in five states including Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram, comes in a short interval of about a month after the 28th phase, which opened for sale on October 4.
“Government of India has authorised State Bank of India (SBI), in the XXIX Phase of sale, to issue and encash Electoral Bonds through its 29 Authorised Branches w.e.f. November 6-20, 2023,” the finance ministry last week said in a statement.
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What Are Electoral Bonds?
Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency to political funding.
The bonds were introduced in 2017 to cleanse the system of political funding in the country. In his Budget Speech on February 1, 2017, then finance minister Arun Jaitley said: “Even 70 years after Independence, the country has not been able to evolve a transparent method of funding political parties which is vital to the system of free and fair elections…Political parties continue to receive most of their funds through anonymous donations which are shown in cash. An effort, therefore, requires to be made to cleanse the system of political funding in India.”
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Who Can Buy Electoral Bonds?
These bonds can be bought by any citizen of India or entity incorporated or established in the country. A person can buy the bonds, either singly or jointly with other individuals. The purchaser would be allowed to buy an electoral bond(s) only on due fulfilment of all the extant KYC norms and by making payment from a bank account. It will not carry the name of the payee.
The bonds are available for purchase for a period of 10 days each in the months of January, April, July and October. Now, the electoral bonds can be bought between October 4 and October 13.
Who Can Receive Electoral Bonds?
Only the political parties registered under Section 29A of the Representation of the People Act, 1951, and that secured not less than one per cent of the votes polled in the last Lok Sabha or state elections, are eligible to receive the electoral bonds.
How To Purchase Electoral Bonds?
The bonds can be bought from the 29 authorised branches of the government-owned State Bank of India (SBI) in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore. The authorised SBI branches are in Lucknow, Shimla, Dehradun Kolkata, Guwahati, Chennai, Patna, New Delhi, Chandigarh, Srinagar, Gandhinagar, Bhopal, Raipur, and Mumbai.
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The receiving political party can redeem the bonds within 15 days of the date of issue. If the bonds are not redeemed within 15 days, no payment is made to the party. The redeemed amount is credited into the political party’s account on the same day as the bond is deposited with the bank. The electoral bonds will be encashed by an eligible political party only through a bank account with the authorised bank.
The electoral bonds can be bought from any authorised branch of SBI by paying digitally or through a cheque. Cash is not allowed. The donor then can hand over the bonds to the political party of his/ her choice, which can encash them within 15 days of the date of issue.
The government approved the issuance of the latest round of electoral bonds, days after the Supreme Court reserved its verdict on a batch of petitions challenging the validity of the electoral bonds scheme for funding political parties. On October 31, a five-judge constitution bench comprising Chief Justice D Y Chandrachud and Justices Sanjiv Khanna, B R Gavai, J B Pardiwala and Manoj Misra commenced hearing arguments on the four petitions, including those filed by Congress leader Jaya Thakur, the Communist Party of India (Marxist) and NGO Association for Democratic Reforms (ADR).
After the detailed hearing on the matter, the apex court reserved the judgement on November 2. Two days after this, the government issued notification for issuance of latest round electoral bonds. It is to be noted that Mizoram and the first phase of Chhattisgarh assembly polls are to be held on November 7. The polling in all these five states would end on November 30, and counting of votes would be done on December 3.
