Govt unveils electoral bond scheme to clean up politics

New Delhi: Keeping its promise of cleaning up election funding and discouraging cash donations, the government on Tuesday notified the scheme of electoral bonds. A donor can now buy these bonds from the State Bank of India and give them to political parties which can encash them only through a designated bank account.

The takeaway from this scheme, which finance minister Arun Jaitley had announced in his budget speech, however, is that the name of the person buying the bonds will be kept secret though he or she will have to fill up a KYC form.

The bonds will provide an alternative to cash donations made to political parties.  

Making an unscheduled announcement on the scheme in the Lok Sabha, Mr Jaitely said, “The government has now finalised the scheme of electoral bonds.” The scheme was later notified in the evening.

After Mr Jaitely shared the contours of the scheme, Congress leader Mallikarjun Kharge questioned as to what purpose the bonds will serve without disclosing the donor’s  name. To this, Mr Jaitley replied that the bonds will get reflected in the balance sheet of the donors.

“It will ensure cleaner money coming from donors, cleaner money coming to political party and ensure significant transparency,” he said.

The minister said, at present, details of donors, quantum and source of funds is not known.

The electoral bonds can be given to any registered political party which has secured at least one per cent vote in last election.

That party will have to give details of one bank account to the Election Commission and it will have to be encashed within 15 days.

The bonds resembling a promissory note will not carry any interest. The lender will remain the custodian of the donor’s funds until the political parties are paid.

The bonds will be available at specified branches of State Bank of India (SBI) for 10 days each in months of January, April, July and October. The bonds will be valid for 15 days. The bonds can be bought for any value, in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore.

Later talking to reporters, Mr Jaitley said that the 15-day validity time has been prescribed for the bonds to ensure that they do not become a parallel currency.

“Every political party will file before Election Commission return as to how much money has come through electoral bonds,” the minister said.