What is Electoral Bond Scheme?
Historical Background
Key Points
8 points- 1.
Bonds were issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore.
- 2.
Purchasable by Indian citizens or entities incorporated/established in India.
- 3.
Available for purchase for 10 days in January, April, July, and October, and an additional 30 days in a general election year.
- 4.
Only the State Bank of India (SBI) was authorized to issue and encash these bonds.
- 5.
Bonds were valid for 15 calendar days from the date of issue.
- 6.
Only political parties registered under Section 29A of the Representation of the People Act, 1951, and having secured at least 1% of the votes polled in the last general election or assembly election, were eligible to receive donations.
- 7.
The identity of the donor was kept anonymous from the public and the political party.
- 8.
Amendments were made to the Reserve Bank of India Act, 1934, Representation of the People Act, 1951, Income Tax Act, 1961, and Companies Act, 2013 to facilitate the scheme.
Visual Insights
Evolution & Scrapping of Electoral Bond Scheme
This timeline traces the key milestones in the introduction, operation, and eventual scrapping of the Electoral Bond Scheme, highlighting its short but impactful history in Indian political funding.
The Electoral Bond Scheme was introduced with the stated aim of bringing transparency to political funding by moving away from cash donations. However, its anonymity clause became a major point of contention, leading to a landmark Supreme Court judgment that deemed it unconstitutional, marking a significant moment in India's electoral reform journey.
- 2017Union Budget 2017-18: Electoral Bond Scheme announced to 'cleanse' political funding.
- 2018Jan 2: Ministry of Finance notifies the Electoral Bond Scheme, 2018. Bonds become operational.
- 2019April 12: Supreme Court passes interim order, directing political parties to submit details of electoral bond donations to ECI in sealed cover.
- 2020-2023Continued operation of Electoral Bond Scheme amidst ongoing legal challenges and public debate over transparency.
- 2024Feb 15: Supreme Court unanimously strikes down Electoral Bond Scheme as unconstitutional, violating Article 19(1)(a).
- 2024March: SBI directed to disclose data of bond purchasers and recipient parties to ECI; ECI publishes data on its website.
- 2025Ongoing debate on alternative transparent political funding mechanisms post-Electoral Bond scrapping.
Recent Developments
5 developmentsOn February 15, 2024, the Supreme Court of India unanimously struck down the Electoral Bond Scheme as unconstitutional.
The Supreme Court ruled that the scheme violated the citizens' right to information under Article 19(1)(a) of the Constitution.
The court directed the State Bank of India (SBI) to disclose all details of electoral bonds purchased and redeemed since April 12, 2019, to the Election Commission of India (ECI).
The ECI subsequently published the data provided by SBI on its website, revealing details of donors and recipient political parties.
The scrapping has intensified the debate on political funding transparency and the need for new reforms.