10 January, 2020
4 Min Read
Syllabus subtopic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Prelims and Mains focus: Key features of Electoral Bonds Scheme and its significance; merits and demerits of electoral bonds
News: The State Bank of India (SBI) has been authorised to sell and encash electoral bonds, the 13th such sale since the scheme started in 2018, from January 13 to 22, a Finance Ministry statement said on Thursday.
About Electoral bonds:
Electoral bonds allow donors to pay political parties using banks as an intermediary.
Key features: Although called a bond, the banking instrument resembling promissory notes will not carry any interest. The electoral bond, which will be a bearer instrument, will not carry the name of the payee and can be bought for any value, in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore.
Eligibility: As per provisions of the Scheme, electoral bonds may be purchased by a citizen of India, or entities incorporated or established in India. A person being an individual can buy electoral bonds, either singly or jointly with other individuals. Only the registered Political Parties which have secured not less than one per cent of the votes polled in the last Lok Sabha elections or the State Legislative Assembly are eligible to receive the Electoral Bonds.
Need: The electoral bonds are aimed at rooting out the current system of largely anonymous cash donations made to political parties which lead to the generation of black money in the economy.
Merits of electoral bonds
Source: The Hindu
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