Sale of Electoral Bonds at Authorised Branches of State Bank of India

• An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of SBI.


• Electoral bond scheme was announced in Union Budget 2017-18 in an attempt to:

• To curb black money and use of cash in political funding;

• To eliminate fraudulent political parties that were formed on pretext of tax evasion.

• Protects donor from political victimization due to nondisclosure of identity of the donor.

Issues with Electoral bonds:

• Allowed possibility of corporate misuse as it removes limits and disclosure requirements on Company donations to Political Parties.

• Lack of level playing field in terms of political funding as it restricts the benefits of electoral bonds only to a few political parties.

• Notably, in SC, Centre and EC had taken contrary stands on Electoral bonds.

• Centre: Allowing anonymity in political funding will “promote transparency in funding and donation received by political parties”.

• EC: This would “compromise transparency” and could lead to “increased use of black money for political funding through shell companies”.


Mains Paper 3: Economy

Prelims level: Electoral Bonds

Mains level: About Electoral Bonds and related issues

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