Introduction of Electoral Bonds:

In 2018, the central government notified the Electoral Bond Scheme. This scheme was announced in the 2017 budget. It is touted as an alternative to cash donations made to the political parties. It is aimed at bringing clean money and substantial transparency into the system of political funding. The salient features of the scheme are:

(i) The electoral bond means a bond issued in the nature of promissory note which is a bearer banking instrument and does not carry the name of the buyer or payee.

(ii) The electoral bonds may be purchased by a citizen of India or entities incorporated or established in India.

(iii) The electoral bonds can be used for making donations to only those registered political parties which have secured not less than one per cent of the votes polled in the last general election to the Lok Sabha or the State legislative Assembly.

(iv) The electoral bonds can be encashed by an eligible political party only through a bank account with the authorized bank.

(v) The electoral bonds are issued in the denomination of ₹1,000,

₹10,000, ₹1,00,000, ₹10,00,000 and ₹1,00,00,000.

(vi) The information furnished by the buyer is treated confidential by the authorized bank and is not to be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency.