What is Electoral Bonds Scheme?
Historical Background
Key Points
8 points- 1.
Anonymity: The identity of the donor was kept confidential from the public and the political party.
- 2.
Issuer: Only the State Bank of India (SBI) was authorized to issue and encash these bonds.
- 3.
Denominations: Bonds were issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore.
- 4.
Eligibility for Purchase: Any Indian citizen or body incorporated in India could purchase electoral bonds.
- 5.
Eligibility for Redemption: Only political parties registered under Section 29A of the Representation of the People Act, 1951, and which secured at least 1% of the votes polled in the last general election or assembly election, were eligible to receive donations via electoral bonds.
- 6.
Validity: Bonds were valid for 15 days from the date of issue.
- 7.
No Limit on Corporate Donations: Amendments to the Companies Act 2013 removed the earlier cap of 7.5% of average net profit for corporate donations, allowing companies to donate unlimited amounts.
- 8.
Tax Exemption: Donations made through electoral bonds were exempt from tax for both the donor and the political party.
Visual Insights
Electoral Bonds Scheme: Features, Objectives & Criticisms
A mind map illustrating the core aspects of the now-defunct Electoral Bonds Scheme, its stated goals, and the reasons for its widespread criticism and eventual judicial invalidation.
Electoral Bonds Scheme (Struck Down Feb 2024)
- ●Introduction
- ●Key Features
- ●Stated Objectives
- ●Major Criticisms
- ●Legal Framework & Challenges
Electoral Bonds: Purchase & Redemption Process (Pre-Feb 2024)
This flowchart illustrates the step-by-step process involved in the purchase and redemption of Electoral Bonds, as it existed before the Supreme Court declared the scheme unconstitutional in February 2024.
- 1.Citizen/Entity decides to donate
- 2.Purchases Bond from designated SBI branch (Jan, Apr, Jul, Oct + 30 days in election year)
- 3.Bond issued in multiples of ₹1,000 to ₹1 Crore
- 4.Donor's identity kept anonymous from public (known to SBI)
- 5.Donor hands over Bond to eligible Political Party
- 6.Political Party receives Bond
- 7.Party deposits Bond in its verified bank account within 15 days of issue
- 8.Bank credits funds to Party's account
Recent Developments
4 developmentsOn February 15, 2024, the Supreme Court of India unanimously struck down the Electoral Bonds Scheme as unconstitutional, citing violations of the right to information (Article 19(1)(a)).
The Supreme Court directed the State Bank of India (SBI) to disclose details of all 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 the names of donors and recipient political parties.
The disclosure sparked widespread debate about corporate influence and the disparity in political funding.