The government Tuesday unveiled key features of electoral bonds which will have a shelf-life of 15 days and can be purchased only from specified branches of State Bank of India.
Finance Minister Arun Jaitley, in a statement in Lok Sabha, said electoral 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. An Indian citizen or body incorporated in India will be eligible to purchase the bond.
“Electoral bonds would have a life of only 15 days during which it can be used for making donation only to the political parties registered under section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last general election to the House of the People or a Legislative Assembly,” according to the statement.
Jaitley said the bonds would bring in “substantial and significant amount of transparency” in electoral funding where there is “nil transparency” as of now.
These bonds can be bought only after fulfilling all the existing Know Your Customer (KYC) norms and by making payments from a bank account. These bonds will not carry the name of the payee. The bonds will be available for purchase for 10 days each in the months of January, April, July and October. The window would be for an additional 30 days in the year of general election.
In his Budget speech 2017-18, Jaitley had announced the government’s plans to introduce an electoral bond scheme to clean the system of political funding.
A political party can encash these bonds only through “a designated bank account with the authorised bank.” These bonds would be an interest-free bearer instrument in the nature of a promissory note.
In Lok Sabha, when Congress leader Mallikarjun Kharge asked what purpose would the bonds serve if the name of the donor was not disclosed, Jaitley said the bonds would get reflected in the balance sheet of the donors.
“Let me clear misconceptions, if any. I had announced in the Budget speech that political funding needs to be cleaned up… (In) a very large part of donation coming to political parties by the donors, quantum and source is not known… electoral bonds substantially cleanse the system,” he said.
Electoral bonds, he said, can be given to a registered political party which has secured at least 1 per cent vote in last election. That party will have to give one bank account to the Election Commission and it will have to be encashed within 15 days, he said.
Later talking to reporters, Jaitley said a 15-day shelf-life has been prescribed for the bonds to ensure that they do not become parallel currency. “Every political party will file before Election Commission in its return how much money has come through electoral bonds,” he said.
On why the name of the donor was being kept secret, Jaitley said past experience had shown that once the names were disclosed, there was a tendency to shift to cash donations.