Q1. When was the electoral bond scheme introduced?
Ans: The electoral bonds were introduced via the Finance Bill, 2017. The government notified the scheme on Jan 2, 2018. The scheme was intended to cleanse the system of political funding in the country, the notification said.
Q2. What is an electoral bond?
Ans: An electoral bond would be a bearer instrument in the nature of a promissory note and an interest free banking instrument. A citizen of India or a body incorporated or established in India will be eligible to purchase the bond.
A person being an individual can buy electoral bonds, either singly or jointly with other individuals.
Q3. How can electoral bonds be bought?
Ans: Electoral bonds can be bought digitally or through a cheque.
Q4. What would the worth of electoral bonds be?
Ans: Electoral bonds would be issued/purchased for any value, in multiples of 1,000, 10,000, 1,00,000, 10,00,000 and 1,00,00,000 by SBI’s 29 authorised branches.
Q4. Who can buy electoral bonds?
Ans: The purchaser would be allowed to buy electoral bonds only if he fulfils the KYC norms and makes payment from a bank account.
Q5. Will the electoral bond carry the name of the payee?
Ans: An electoral bond will not carry the name of the payee. These can be donated to any political party of the buyer’s choice.
Q6. What will be the shelf life of an electoral bond?
Ans: Electoral bonds would have a life of only 15 days during which it can be used for making donation only to the political parties
a) registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and
b) which secured not less than one per cent of the votes polled in the last general election to the Lok Sabha or a Legislative Assembly.
Q7. When is the bond available?
Ans: The bonds shall be available for purchase for 10 days each in January, April, July and October, as may be specified by the Central Government.
Another 30 days shall be specified by the Central Government in the year of general elections to the Lok Sabha.
Q8. When can a political party encash a bond?
Ans: The bond shall be encashed by an eligible political party only through a designated bank account with the authorised bank.
Electoral bonds shall be valid for 15 days from the date of issue and no payment shall be made to any payee political party if the electoral bond is deposited after expiry of the validity period.
The electoral bond deposited by an eligible political party in its account shall be credited on the same day.
Q9. Are electoral bonds taxable?
Ans: Both donor and recipient shall get deductions. The political party will get tax exemption if it files IT returns.
Q10. What are the advantages of the electoral bond scheme?
Ans: The government claims that electoral bonds would check black money in the electoral process.
It would also ensure that all donations made to a party were accounted for in the balance sheets without exposing donor details to the public.
Q11. What do the critics say?
Ans: i) Earlier no foreign company could donate to any political party. Now they can.
ii) Earlier companies had to disclose details of donations in their annual statement of accounts. Even shareholders shall remain in the dark about the donations.
iii) Shell companies can also donate to political parties without anyone getting to know.
iv) The electoral bond scheme also removed the limit up to which companies could donate under the Companies Act.
v) There is no transparency about who was making the donations. Details must be made public to voters, the other crucial stakeholders in the process.
vi) Could lead to money-laundering
Q12. What has been the RBI and EC stand on this?
Ans: The Election Commission has told the Supreme Court that though it was not against the electoral bonds scheme, it did not approve of anonymous donations.
The RBI has also warned the government that the bonds would “undermine faith in Indian banknotes and encourage money laundering”.
