What Are Electoral Bonds? Understanding The Supreme Court's Latest Decision
In a significant ruling on Thursday, the Supreme Court declared the electoral bonds scheme unconstitutional and directed the issuing bank to cease its issuance. The apex court also instructed the State Bank of India (SBI) to provide details of electoral bonds purchased from April 12, 2019, until the present to the Election Commission .
What Are Electoral Bonds?
Electoral bonds in India , available in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore, function as interest-free bearer bonds or monetary instruments accessible to both individuals and companies. Authorized branches of the State Bank of India (SBI) facilitate the purchase of these bonds, enabling donors to make political contributions through KYC-compliant accounts. Notably, the anonymity of donors is maintained, as these instruments do not include details of the contributors.
Political parties must encash the electoral bonds within a specified timeframe, with no restrictions on the quantity that individuals or companies can acquire. The government introduced the Electoral Bond Scheme through the Finance Acts of 2016 and 2017, amending the Representation of the People Act, 1951 (RPA), the Companies Act, 2013, the Income Tax Act, 1961, and the Foreign Contributions Regulation Act, 2010 (FCRA).
Before the implementation of the scheme, political parties were required to disclose donations exceeding Rs 20,000. Additionally, corporate entities were limited in making contributions, not exceeding 7.5 percent of their total profit or 10 percent of their revenue.
Who Can Receive Funding via Electoral Bonds?
Political parties meeting specific criteria, such as securing at least 1 percent of the votes in recent Lok Sabha or State Assembly elections and being registered under the RPA, can obtain a verified account from the Election Commission of India (ECI). The bond amounts are deposited into this account within 15 days of purchase.
What Are Electoral Bonds?
Electoral bonds in India , available in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore, function as interest-free bearer bonds or monetary instruments accessible to both individuals and companies. Authorized branches of the State Bank of India (SBI) facilitate the purchase of these bonds, enabling donors to make political contributions through KYC-compliant accounts. Notably, the anonymity of donors is maintained, as these instruments do not include details of the contributors.
Political parties must encash the electoral bonds within a specified timeframe, with no restrictions on the quantity that individuals or companies can acquire. The government introduced the Electoral Bond Scheme through the Finance Acts of 2016 and 2017, amending the Representation of the People Act, 1951 (RPA), the Companies Act, 2013, the Income Tax Act, 1961, and the Foreign Contributions Regulation Act, 2010 (FCRA).
Before the implementation of the scheme, political parties were required to disclose donations exceeding Rs 20,000. Additionally, corporate entities were limited in making contributions, not exceeding 7.5 percent of their total profit or 10 percent of their revenue.
Who Can Receive Funding via Electoral Bonds?
Political parties meeting specific criteria, such as securing at least 1 percent of the votes in recent Lok Sabha or State Assembly elections and being registered under the RPA, can obtain a verified account from the Election Commission of India (ECI). The bond amounts are deposited into this account within 15 days of purchase.
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