Government approves 19th tranche of electoral bond
Why in news:
- Ahead of assembly elections in five states, the government on Friday approved issuance of the 19th tranche of electoral bonds which will be open for sale from January 1 to 10.
- Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding.
- However, Opposition parties have been raising concerns about alleged opaqueness in funding through such bonds.
Authorised bank :
- SBI is the only authorised bank to issue such bonds.
- State Bank of India SBI, in the XIX Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches with effect from January 1 to January 10, 2022.
- The 29 specified SBI branches are in cities such as Lucknow, Shimla, Dehradun Kolkata, Guwahati, Chennai, Thiruvananthapuram, Patna, New Delhi, Chandigarh, Srinagar, Gandhinagar, Bhopal, Raipur, and Mumbai.
About electoral bond :
- Electoral Bond is a financial instrument for making donations to political parties.
- According to provisions of the scheme, electoral bonds can be purchased by a person who is a citizen of India or entities incorporated or established in India.
- The general public can also issue these bonds to fund eligible political parties.
- Registered political parties that have secured not less than 1 per cent of the votes polled in the last election of Lok Sabha or legislative assembly are eligible to receive electoral bonds.
- 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 expiry of the validity period, as per the statement.
- The bond deposited by any eligible political party into its account would be credited on the same day.
- The sale of the first batch of electoral bonds took place from March 1-10, 2018.
- The 18th tranche of bond sale took place from September 1 to September 10, 2021.
Advantages of electoral bond:
- All electoral bonds issued are to be redeemed by a bank account that the Election Commission of India has disclosed; hence the malpractice is strengthened.
- The widespread use of electoral bonds can help to hold back political parties who operate with the goal of simply collecting funds from the public. It is because only registered parties attaining at least 1% of the votes in the general election can receive electoral funding.
- Electoral bonds work with the government goal to make election funding entirely safe and digitized. Therefore, any donation going above RS 2000 is not legally required to be in the form of electoral bonds and cheques.
- All transactions of electoral bonds are carried out via cheques or digitally.
Disadvantages of electoral bond:
- Some critics say that electoral bonds have been brought into operation with the primary purpose of choking the funding available to opposition parties.
- Electoral bonds do not threaten financially stable companies in any way. The goal of these companies is to fund one political party over another.
This is further promoted by the limit of donating 7.5% of the company’s annualized profits towards a political party being abolished.