Sale of Electoral bonds to begin

• The first sale of electoral bonds will start from March 1 for a period of 10 days at four main branches of State Bank of India in Chennai, Kolkata, Mumbai and New Delhi.

What are Electoral Bonds?

• These are interest-free bearer instruments (like Promissory Notes) that will be available for purchase from the State Bank of India within a designated window of 10 days in every quarter of the financial year. An additional period of a month will be notified in the year of elections to Lok Sabha.
• The life of the bond would be only 15 days. (It) can only be encashed in a predeclared account of a political party (which) will have to disclose the amout to the Election Commission.

Analysis:

• The current system of cash donations from “anonymous or pseudonymous” sources is “wholly non-transparent”, and “the donor, the donee, the quantum of donations and the nature of expenditure are all undisclosed”.
• The system of Bonds will encourage political donations of “clean money” from individuals, companies, HUF, religious groups, charities, etc.
• After purchasing the bonds, these entities can hand them to political parties of their choice, which must redeem them within the prescribed time. The idea, the government has said, is to evolve a transparent system of political funding.
• But the voting public will not know which individual, company, or organisation has funded which party, and to what extent. At the same time, the fact that the SBI — and by implication, the government — will know who is getting what from whom can open up the possibility of arm twisting or harassment of those seen to be supporting parties or ideologies that are opposed to the government. And this will be possible without the public knowing or being able to see the pattern of such harassment.

By: Vishal