The union government on Tuesday announced details of political funding that can be routed by donors to parties through electoral bonds, a scheme announced by it in Union Budget 2017.
Electoral bonds will allow a political donor to purchase bonds from authorized banks. These can be redeemed only through the registered accounts of a political party in a prescribed time frame.
In line with the Election Commission’s recommendation, the government in last year’s budget session also capped anonymous cash donations to political parties at Rs2,000.
Finance minister Arun Jaitley said the electoral bonds, which are interest-free banking instruments, can be bought from specified branches of State Bank of India in multiples of Rs1,000, Rs1 lakh, Rs10 lakh or Rs1 crore.
The life of the electoral bonds will be 15 days and they can be encashed only by registered political parties through a designated bank account.
The electoral bonds will be available for purchase for a period of 10 days each in the months of January, April, July and October, as specified by the government. Additionally, a 30-day period will be specified by the central government in the year of general elections.
Analysts said the move could end up bringing in more opacity in political funding and could be misused, given the lack of disclosure requirements for individuals purchasing electoral bonds.