To enable clean political funding, the government pitched the proposal of a new set of electoral bonds that donors can purchase from SBI and political parties can encash only through a legal bank account. These bonds would serve as a replacement to cash donations available at SBI for 10 days each in the months of January, April, July and October.
The bonds have a validity of 15 days and will not reveal the donor’s name. Although called a bond, they will not carry any interest. The lender will be the caretaker of the donor’s funds till the political parties are paid.
The move aims to make political funding more transparent and crystal clear for the benefit of the economy.
Electoral bonds will permit donors to pay political parties with the help of banks as an intermediary.
The main aim is to ensure clean money and significant transparency through the electoral system against the current scenario.
Jaitley had also announced a restriction on cash donation at Rs 2,000 instead of Rs 20,000 in the Budget for 2017–2018.
Jaitley remarked that the electoral bond will not bear the payee’s name and can be bought for any amount, in Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh or Rs. 1 crore.
The bonds that are deemed to have a validity period of only 15 days can be used to make donation only to registered political parties and can be cashed only through a designated bank account of the receiving political party.
The bonds can be bought each in the months of January, April, July and October for a total of 10 days. In the year of general elections, the window will be extended for a period of 30 days.
Jaitley said that his main aim is to move away from the present mode, which is cash.