Finance Ministry on Tuesday on notified the contours of electoral bonds for funding of political parties during the ongoing winter session of the parliament. The electoral bonds will be bearer instruments like promissory notes. Interest-free electoral bonds for donation to political parties can be purchased from State Bank of India for 10 days in the months of January, April, July, and October, Finance Minister Arun Jaitley said in the Lok Sabha today. They will be available in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore, he added. Electoral bonds will not carry the name of the payee and have to be encashed only through a designated bank account within 15 days, added the finance minister.
Finance minister Arun Jaitley, during his Budget speech in February 2017, had proposed steps for cleansing political funding, including a ban on cash donations of over Rs 2,000 to a political party from any individual. He had also announced the proposal to issue electoral bonds through which a donor could buy bonds from authorised banks against cheques and digital payments that would be redeemable only in the designated account of a registered political party.
According to Finance Bill amendments, the previous limit of 7.5 percent of the average three-year net profit for donations has been removed and companies are no longer required to name the parties to which contributions are made — they will be required to disclose the amount. The government had also introduced omission of the first proviso in Section 182 of the Companies Act, 2013, which consequently removed limits on corporate donations to political parties. Under Section 29C of the Representation of the People (RP) Act, political parties have to file contribution reports complete with details of donors for any contribution above Rs 20,000. This was amended in the Budget session this year to introduce a proviso and explanation that exempts political parties from disclosing donations received from electoral bonds, even if it is above the prescribed limit.Former Chief Election Commissioner Nasim Zaidi, at the time of demitting office In July, had expressed concerns saying that electoral bonds would impact transparency negatively and the poll panel had not been consulted.