Finance ministry lists out benefits of electoral bonds, says scheme to help cleanse entire political funding system

The finance ministry on Wednesday listed out benefits of electoral bonds scheme that was originally announced during presentation of the Union Budget 2017. The plan was made public with an aim to end unregulated political funding wherein a large amount of black money seeps into the electoral process. These electoral bonds will be available for political donors in the multiples of Rs 1,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore. Read a full report on electoral bonds here.

Besides, the scheme will keep a close tab on the inflow of funds for election related activities. How much funding comes, what kind of fund it is, the source of funding and where it will be spent will be known clearly after the scheme is put into place, the government said. The entire system of political funding will become more transparent, government claims. Apart from that, non-disclosure of the scheme will ensure people are free to donate to any political party of their choice. It will be launched through some specified branches of the State Bank of India, the government clarified.

According to the government which has been the driving force behind such a move, for printing of these electoral bonds secrecy put in place during printing of notes will be adopted. The scheme also promises to protect the identity of the donor as well as the party which has received the donation. However, political observers and analysts are of the view that the clause of anonymity will not augur well with the entire electoral process at a time when government wants more compliance on tax front. However, the scheme comes with some benefits too.


The scheme which is first of its kind in India will reinforce the idea of moving away from a cash system towards clean money which cheque system could not achieve. There is 15 days gap, in the scheme, between buying and selling that will ensure they don't turn into a parallel economy, informed the government. It maybe noted that the scheme could be used for making donations only to the political parties registered under section 29A of the Representation of the Peoples Act, 1951.

The nature of these electoral bonds will be in the form of bearer instrument in the nature of promissory note. Anyone who is a citizen of India or a body incorporated in India will be eligible for the attractive scheme. The donors can make payment using their bank accounts. The scheme will come with a lifespan of 15 days, according to the information released by the finance ministry. The scheme will be available for purchase for a period of 10 days each in the months of January, April, July and October as may be specified by the government.

For full coverage of Union Budget 2018, click  here.

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Updated Date: Jan 14, 2018 23:02:59 IST

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