Explain Electoral Bond in 500 words
Electoral bonds are a financial instrument introduced by the Government of India in 2018 as a means of making political funding more transparent and accountable. These bonds are essentially a form of promissory note that can be purchased by individuals or companies from authorized banks and then donated to political parties. The aim of electoral bonds is to bring about greater transparency in political funding by ensuring that donations are made through official channels and are recorded in a centralized system.
The process of purchasing and donating electoral bonds is relatively simple. Individuals or entities can buy these bonds from specified branches of authorized banks in denominations ranging from Rs. 1,000 to Rs. 1 crore. These bonds are issued in the form of a bearer instrument, meaning that the identity of the donor is not disclosed. Once purchased, the bonds can be donated to any registered political party within 15 days of issuance. The political party can then encash the bonds through a designated bank account within the specified time period.
One of the key features of electoral bonds is that they can only be purchased through digital channels, such as online banking or through authorized bank branches. This helps in ensuring that the transactions are traceable and can be monitored by the government. Additionally, the bonds are issued with a unique alphanumeric code, which further aids in tracking the movement of funds and ensuring transparency in the donation process.
Another important aspect of electoral bonds is that the identity of the donor is kept confidential. While the political party receiving the donation is required to disclose the amount of funds received through electoral bonds in their annual audit report, they are not required to disclose the identity of the donors. This has raised concerns about the potential for misuse of electoral bonds by allowing for anonymous donations to political parties.
Critics of electoral bonds argue that the lack of transparency in the donor's identity undermines the very purpose of bringing about greater accountability in political funding. They contend that the anonymity of donors could lead to the potential for quid pro quo arrangements between donors and political parties, thereby compromising the integrity of the electoral process.
Supporters of electoral bonds, on the other hand, argue that the system provides a legal and transparent means for individuals and companies to contribute to political parties without fear of retribution. They also point out that electoral bonds help in curbing the influence of black money in politics by ensuring that donations are made through official banking channels.
In conclusion, electoral bonds have been introduced as a mechanism to bring about greater transparency and accountability in political funding. While the system has its merits in terms of formalizing donations and curbing the influence of black money, there are also legitimate concerns about the lack of transparency in the donor's identity. As the debate over electoral bonds continues, it is essential for policymakers to strike a balance between ensuring transparency in political funding and protecting the privacy rights of donors.