Finance minister Arun Jaitley introduced ‘electoral bonds’ in Union Budget 2017-18 as a measure to cleanse the funding to political parties.
India sold Rs 222 crore worth of bonds in the government’s maiden issue of electoral bonds, which donors can buy from scheduled banks to pay political parties without revealing their identities,PTI reports.
The maiden issue opened for subscription for 10 days beginning March 1. “The amount collected from the sale of electoral bonds under the first issue of the scheme is Rs 222 crore as on March 9, 2018,” Minister of state for finance, P Radhakrishnan,said in a written reply to the Lok Sabha.
Finance minister Arun Jaitley introduced ‘electoral bonds’ in Union Budget 2017-18 as a measure to cleanse the funding to political parties. Unlike debt instruments, these bonds resemble promissory notes, which allow donors to pay political parties with banks as an intermediary.
The bonds are available for sale at designated branches of State Bank of India. “SBI is the only authorised bank to issue and encash the Electoral Bearer Bonds under the scheme,” he said.
To a separate question, he said the Electoral Bond Scheme was notified in January this year. The first issue opened this month in place of January. Bonds were available for purchase from March 1-10. The interest-free banking instrument can be purchased by a citizen of India or a body incorporated in India, he said.
“The tenor of electoral bonds is for 15 days, during which it can be used for making a donation only to registered political parties which have secured not less than one percent of the votes polled” in the last Lok Sabha or assembly election, he said.
The minister said bonds under the scheme shall be available for purchase for a period of 10 days each in January, April, July, and October. An additional period of 30 days shall be specified by the central government in the year of general election.
“The Electoral Bond Scheme is to provide anonymity to the donors but at the same time establish a transparent political funding system,” he said.
The bonds can be purchased only after making payment through a KYC-compliant account. They can be encashed by an eligible political party only through a designated bank account with the authorised bank.
An electoral bond will be valid for 15 days from the date of issue. No payment would be made to any payee political party if the bond is deposited after the expiry of the validity period. The bond deposited by any eligible political party into its account would be credited on the same day.