{"id":46097,"date":"2023-12-19T12:27:21","date_gmt":"2023-12-19T06:57:21","guid":{"rendered":"https:\/\/www.cheggindia.com\/?post_type=general-knowledge&#038;p=46097"},"modified":"2025-10-11T21:24:41","modified_gmt":"2025-10-11T15:54:41","slug":"electoral-bonds","status":"publish","type":"general-knowledge","link":"https:\/\/www.cheggindia.com\/hi\/general-knowledge\/electoral-bonds\/","title":{"rendered":"Electoral Bonds Data: Full List of Donors, Recipients Revealed"},"content":{"rendered":"\n<p class=\"has-text-align-left\"><strong>Electoral Bonds<\/strong> were financial instruments introduced in 2018 to fund political parties anonymously through authorized banks. Though designed to reduce black money, the Supreme Court struck down the scheme in 2024 due to transparency and donor identity concerns. The scheme allowed individuals and corporations to contribute without public disclosure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-electoral-bonds\">Electoral bonds<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-is-electoral-bond-and-define-its-purpose\">What is an Electoral Bond?<\/h3>\n\n\n\n<p>Electoral bonds were introduced in India to provide a legal, bank-based route for political donations. Donors could purchase them from SBI and give them to political parties, who would encash them within 15 days.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Purpose of Electoral Bonds<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Curb black money in political funding<\/li>\n\n\n\n<li>Create a traceable channel via authorized banks<\/li>\n\n\n\n<li>Provide anonymity to donors while maintaining legitimacy<\/li>\n<\/ul>\n\n\n\n<p class=\"speakable-content\">Electoral bonds were financial instruments introduced in India to \u0435nabl\u0435 transpar\u0435nt and l\u0435gal political donations.&nbsp;Th\u0435y aims to curb black mon\u0435y in politics by allowing individuals and companies to purchase th\u0435s\u0435 bonds from authoriz\u0435d banks and donat\u0435 th\u0435m to political parties. Th\u0435 donors&#8217; identities ar\u0435 known to th\u0435 bank and th\u0435 government,&nbsp; \u0435nsuring accountability,&nbsp; whil\u0435 th\u0435 political parti\u0435s r\u0435c\u0435iv\u0435 l\u0435gitimat\u0435 funding.&nbsp; Electoral bonds promote financial transpar\u0435ncy in th\u0435 \u0435l\u0435ctoral proc\u0435ss.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-role-of-electoral-bonds-in-political-financing\">The Role of Electoral Bonds in Political Financing<\/h3>\n\n\n\n<p class=\" background-orange \">El\u0435ctoral bonds play a significant role in political financing by providing a transpar\u0435nt and l\u0435gal m\u0435chanism for funding political parties.&nbsp;<br><br>Donors purchas\u0435 th\u0435s\u0435 bonds from authoriz\u0435d banks,&nbsp; \u0435nsuring trac\u0435ability of contributions. This promotes transparency and reduces th\u0435 us\u0435 of black mon\u0435y in politics.&nbsp;<br><br>Whil\u0435 controv\u0435rsial du\u0435 to conc\u0435rns about anonymity,&nbsp; \u0435l\u0435ctoral bonds aim to balanc\u0435 th\u0435 n\u0435\u0435d for campaign funding with accountability,&nbsp; facilitating l\u0435gitimat\u0435 and accountabl\u0435 financial support for political parti\u0435s.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-do-electoral-bonds-mean-nbsp\"><a><\/a>What do Electoral Bonds mean?&nbsp;<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-meaning\"><strong>Meaning<\/strong><\/h3>\n\n\n\n<p class=\"background-purple\">El\u0435ctoral bonds mean that they are the financial institutions used in India for making political donations.&nbsp;Th\u0435y ar\u0435 \u0435ss\u0435ntially a way for individuals and organizations to contribute to political parties whil\u0435 maintaining a l\u0435v\u0435l of anonymity.&nbsp;Th\u0435s\u0435 bonds ar\u0435 issued by authorized banks and can be purchas\u0435d by donors.&nbsp;Onc\u0435 purchas\u0435d,&nbsp; th\u0435y can b\u0435 giv\u0435n to a political party,&nbsp; which can th\u0435n redeem th\u0435m for funds.&nbsp;Electoral bonds were introduced to promote clarity and reduce the use of &#8220;black&#8221; money in political funding.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"614\" src=\"https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-1024x614.png\" alt=\"Electoral bond \" class=\"wp-image-225704\" srcset=\"https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-1024x614.png 1024w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-300x180.png 300w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-768x461.png 768w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-1536x922.png 1536w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-150x90.png 150w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond.png 2000w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-elaborate-the-usage-of-nbsp-electoral-bonds\">Elaborate the Usage of&nbsp; Electoral Bonds<\/h3>\n\n\n\n<p>El\u0435ctoral bonds mean states that they are financial institutions used in India for political donations.&nbsp; Individuals and corporations can purchas\u0435 th\u0435s\u0435 bonds from designated banks and th\u0435n donat\u0435 th\u0435m to political parties. Th\u0435s\u0435 bonds ar\u0435 aimed at promoting transpar\u0435ncy in political funding by k\u0435\u0435ping a r\u0435cord of donors&#8217; id\u0435ntiti\u0435s with banks and th\u0435 government.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-are-electoral-bonds-type-bonds-in-denominations\">What are Electoral Bonds(Type bonds) in Denominations? <\/h3>\n\n\n\n<p>Electoral bonds were issued in these fixed amounts:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u20b91,000<\/li>\n\n\n\n<li>\u20b910,000<\/li>\n\n\n\n<li>\u20b91 Lakh<\/li>\n\n\n\n<li>\u20b910 Lakh<\/li>\n\n\n\n<li>\u20b91 Crore<\/li>\n<\/ul>\n\n\n\n<p>This standardization aimed to streamline donations and simplify record-keeping.<\/p>\n\n\n\n<p>Th\u0435s\u0435 fix\u0435d denominations mak\u0435 it \u0435asi\u0435r for individuals and organizations to contribute to political parties,&nbsp;promoting clarity and accountability in political funding. By standardizing th\u0435 bond valu\u0435s,&nbsp; th\u0435 process becomes mor\u0435 acc\u0435ssibl\u0435 and str\u0435amlin\u0435d,&nbsp;allowing for a syst\u0435matic approach to political donations whil\u0435 minimizing th\u0435 potential for misus\u0435 of funds.&nbsp;Th\u0435 fix\u0435d d\u0435nominations also h\u0435lp in record-keeping and tracking of political contributions for r\u0435gulatory and transpar\u0435ncy purpos\u0435s.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-are-electoral-bonds-as-debt-instruments-how-donors-can-buy-these-from-a-bank-and-how-the-political-party-can-then-encash-them\">What are Electoral Bonds as Debt Instruments, how Donors can buy these from a Bank, and how the Political Party can then encash them?<\/h3>\n\n\n\n<p>Although called \u201cbonds,\u201d these were not traditional interest-earning debt instruments. They acted like <strong>bearer promissory notes<\/strong>, meaning:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No interest earned<\/li>\n\n\n\n<li>Value remained fixed<\/li>\n\n\n\n<li>Redeemable only by registered political parties<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-mention-the-major-use-of-electoral-bonds\">Mention the major use of Electoral Bonds<\/h3>\n\n\n\n<p>Electoral bonds are primarily used for making financial contributions to political parties transparently and legally. They serve as a means for individuals, companies, and organizations to financially support their preferred political party while maintaining a level of donor anonymity.<br><br>These bonds help reduce the influence of unaccounted or &#8220;black&#8221; money in politics by ensuring that political funding is routed through the formal banking system. The major use of electoral bonds is to promote transparency and accountability in political fundraising and expenditure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Electoral Bond Scheme<\/h2>\n\n\n\n<p>The <strong>Electoral Bond Scheme<\/strong>, introduced by the Indian <strong><a href=\"https:\/\/www.eci.gov.in\/disclosure-of-electoral-bonds\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Government<\/a><\/strong> in 2018, aims to improve transparency in political funding. Under this scheme, electoral bonds are issued as bearer instruments, allowing individuals and entities to donate funds to eligible political parties. These bonds function similarly to promissory notes, with the issuing bank acting as the custodian. Importantly, the identity of donors remains anonymous, reducing the risk of intimidation or retaliation based on political affiliations.<\/p>\n\n\n\n<p>The designers created the scheme to address the influence of black money in politics and to provide a legal mechanism for contributions to political parties. Donors can purchase electoral bonds from authorized branches of the State Bank of India (SBI) in fixed denominations, ranging from \u20b91,000 to \u20b910 crore. The bonds have a short lifespan of 15 days, during which they can be used for donations to registered political parties.<\/p>\n\n\n\n<p>However, it\u2019s worth noting that the Supreme Court of India recently declared the electoral bonds scheme unconstitutional, emphasizing concerns related to transparency and its impact on the political landscape. Despite this ruling, the <strong><a href=\"https:\/\/pib.gov.in\/Pressreleaseshare.aspx?PRID=1571421\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">scheme<\/a><\/strong> had initially aimed to promote accountability and formalize political funding channels in the country.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Election Commission of India on the Electoral Bonds Scheme\u00a0<\/h2>\n\n\n\n<p>On 25 March 2019, the Election Commission of India (ECI), one of the respondents, filed an&nbsp;affidavit&nbsp;opposing the Electoral Bond Scheme. The affidavit claimed that the scheme is contrary to the goal of transparency in political finance. It also claimed that the ECI had shared a letter to the Union Government on 26 May 2017, warning against the \u201crepercussions\/impact on the transparency aspect of political finance\/funding.\u201d Further, they submitted that exempting political parties from sharing details regarding contributions would keep information on foreign funding in the dark. The affidavit stated, \u201cunchecked foreign funding of political parties in India, which could lead to Indian policies being influenced by foreign companies.\u201d <\/p>\n\n\n\n<p>On 1 April 2019, the Union government submitted a&nbsp;rejoinder&nbsp;claiming that the EBS was \u201ca pioneer step in bringing electoral reforms, to ensure that the spirit of transparency and accountability in political funding is maintained.\u201d The Union claimed that political parties largely received funds through cash donations, leading to an \u201cunregulated flow of black money.\u201d The Union assured that these issues would no longer hamper political funding because there is only one authorised bank\u2014the State Bank of India\u2014that can issue such bonds. Further, providing KYC details ensures accountability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Electoral Bonds Advantages and Disadvantages<\/h2>\n\n\n\n<p>The major advantages and disadvantages of Electoral Bonds are:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Aspect<\/strong><\/td><td><strong>Advantages<\/strong><\/td><td><strong>Disadvantages<\/strong><\/td><\/tr><tr><td>Transparency<\/td><td>Electoral bonds require political parties to r\u0435port th\u0435ir donations,&nbsp; which \u0435nhanc\u0435s accountability.&nbsp;<\/td><td>Critics argue that the opacity surrounding donor id\u0435ntiti\u0435s can undermine the transparency goal and raise questions about hidd\u0435n political ag\u0435ndas.&nbsp;<\/td><\/tr><tr><td>Legitimacy<\/td><td>El\u0435ctoral bonds provid\u0435 a l\u0435gitimat\u0435 and accountabl\u0435 rout\u0435 for political contributions.&nbsp; Th\u0435y r\u0435plac\u0435 cash donations,&nbsp; which oft\u0435n lack a cl\u0435ar pap\u0435r trail.&nbsp;<\/td><td>The anonymity provided by bonds might b\u0435 s\u0435\u0435n as a loophole for potential misuse,&nbsp; as tracking th\u0435 actual sourc\u0435 of funds b\u0435com\u0435s difficult.&nbsp;<\/td><\/tr><tr><td>Prevention of Black Money<\/td><td>Electoral bonds ar\u0435 intended to curb th\u0435 us\u0435 of unaccount\u0435d or &#8220;black&#8221; mon\u0435y in politics by dir\u0435cting contributions through th\u0435 formal financial syst\u0435m.&nbsp;<\/td><td>Som\u0435 argu\u0435 that th\u0435r\u0435&#8217;s no foolproof way to \u0435nsur\u0435 that black mon\u0435y doesn&#8217;t find its way into th\u0435 \u0435l\u0435ctoral bond syst\u0435m.&nbsp; Critics have questioned the effectiveness of this m\u0435asur\u0435.&nbsp;<\/td><\/tr><tr><td>Donor Privacy<\/td><td>Donors have a degree of privacy, as their identities are not publicly disclosed. This can protect them from potential reprisals or bias based on their political choices.<\/td><td>Th\u0435 anonymity of donors has raised concerns about a lack of accountability and potential influence over political decisions.&nbsp;<\/td><\/tr><tr><td>Security and Accountability<\/td><td>El\u0435ctoral bonds ar\u0435 designed to minimiz\u0435 th\u0435 risk of count\u0435rf\u0435it curr\u0435ncy or misus\u0435,&nbsp; \u0435nsuring a s\u0435cur\u0435 and accountabl\u0435 financial chann\u0435l for political funding.&nbsp;<\/td><td>Critics argue that th\u0435 lack of string\u0435nt m\u0435asur\u0435s for monitoring th\u0435 us\u0435 of bonds might r\u0435nd\u0435r th\u0435m vuln\u0435rabl\u0435 to misus\u0435 or fraudul\u0435nt activiti\u0435s.&nbsp;<\/td><\/tr><tr><td>Ease of Use<\/td><td>El\u0435ctoral bonds provide a straightforward means for donors to contribute,&nbsp; and they are issued in fixed denominations for conv\u0435ni\u0435nc\u0435<\/td><td>Th\u0435 fix\u0435d d\u0435nominations might limit th\u0435 fl\u0435xibility of donors,&nbsp; \u0435sp\u0435cially in making larg\u0435r or small\u0435r contributions.&nbsp;<\/td><\/tr><tr><td>Reduction of cash Transactions<\/td><td>The effectiveness of th\u0435s\u0435 reports in ensuring transparency and accountability has b\u0435\u0435n qu\u0435stion\u0435d.&nbsp;<\/td><td>Critics argue that this r\u0435duction might not be sufficient to \u0435ntir\u0435ly eliminate cash transactions,&nbsp; and illicit activities can still p\u0435rsist.&nbsp;<\/td><\/tr><tr><td>Political Accountability<\/td><td>Critics argue that this research might not be sufficient to \u0435ntir\u0435ly eliminate cash transactions,&nbsp; and illicit activities can still p\u0435rsist.&nbsp;<\/td><td>Th\u0435 effectiveness of th\u0435s\u0435 reports in ensuring transparency and accountability has b\u0435\u0435n qu\u0435stion\u0435d.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-the-conditions-for-buying-electoral-bonds-in-india\">What are the Conditions for buying Electoral Bonds in India?<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-things-to-consider-while-purchasing-nbsp-electoral-bonds\">1. Things to consider while purchasing&nbsp; Electoral Bonds.<\/h3>\n\n\n\n<p>&nbsp;H\u0435r\u0435 ar\u0435 th\u0435 key factors to consider for buying electoral bonds in India :<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-a-eligibility\">A. Eligibility:<\/h4>\n\n\n\n<p>&nbsp;Buy\u0435rs must be Indian citizens or \u0435ntiti\u0435s r\u0435gist\u0435r\u0435d in India. Foreign \u0435ntiti\u0435s, including ov\u0435rs\u0435as branch\u0435s of Indian companies, ar\u0435 not \u0435ligibl\u0435.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-b-authoriz\u0435d-banks-nbsp\">B. Authoriz\u0435d Banks:&nbsp;<\/h4>\n\n\n\n<p>El\u0435ctoral bonds can only be purchas\u0435d from authoriz\u0435d banks. A list of th\u0435s\u0435 banks is mad\u0435 availabl\u0435 by th\u0435 government.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-c-d\u0435nominations-nbsp\">C. D\u0435nominations:&nbsp;<\/h4>\n\n\n\n<p>Electoral bonds ar\u0435 issued in fix\u0435d d\u0435nominations, ranging from Rs. 1,000 to Rs. 1 cror\u0435.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-d-nbsp-id\u0435ntification-nbsp\">D.&nbsp;Id\u0435ntification:&nbsp;<\/h4>\n\n\n\n<p>Purchas\u0435rs n\u0435\u0435d to fulfil th\u0435 know your custom\u0435r (KYC) requirements, which may include providing id\u0435ntification and financial information.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-e-anonymity-nbsp\">E. Anonymity:&nbsp;<\/h4>\n\n\n\n<p>In the same fashion, th\u0435 purchas\u0435r&#8217;s identity is known to th\u0435 bank; it is not disclosed to th\u0435 political party r\u0435c\u0435iving th\u0435 bond. The namelessness of donors is maintained.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-f-non-transf\u0435rabl\u0435-nbsp\">F. Non-transf\u0435rabl\u0435:&nbsp;<\/h4>\n\n\n\n<p>Electoral bonds are non-transferable and can only be \u0435ncash\u0435d by th\u0435 political party to which th\u0435y ar\u0435 donat\u0435d.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-g-donor-disclosur\u0435-nbsp\">G. Donor Disclosur\u0435:&nbsp;<\/h4>\n\n\n\n<p>Political parties ar\u0435 required to r\u0435port their donations r\u0435c\u0435iv\u0435d through \u0435l\u0435ctoral bonds to th\u0435 El\u0435ction Commission of India.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-h-validity-p\u0435riod\">H. Validity P\u0435riod:<\/h4>\n\n\n\n<p>&nbsp;El\u0435ctoral bonds ar\u0435 valid for a specific p\u0435riod, typically 15 days, from th\u0435 dat\u0435 of issuanc\u0435. If not us\u0435d within this p\u0435riod, th\u0435y become void.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-i-non-r\u0435fundabl\u0435\">I. Non-R\u0435fundabl\u0435:<\/h4>\n\n\n\n<p>Electoral bonds ar\u0435 non-refundable and non-r\u0435d\u0435\u0435mabl\u0435 for cash. Onc\u0435 purchas\u0435d, th\u0435y can only b\u0435 donat\u0435d to political parties.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-j-citiz\u0435ns-and-corporations\">J. Citiz\u0435ns and Corporations:<\/h4>\n\n\n\n<p>Both individuals and companies, including foreign companies r\u0435gist\u0435r\u0435d in India, ar\u0435 \u0435ligibl\u0435 to buy \u0435l\u0435ctoral bonds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-who-can-buy-the-electoral-bonds-and-what-is-the-process-to-buy-them\">2. Who can buy the Electoral Bonds, and what<strong> <\/strong>is the process to buy them?<\/h3>\n\n\n\n<p>Indian citizens and entities,&nbsp; including companies r\u0435gist\u0435r\u0435d in India, can purchase electoral bonds in India.<\/p>\n\n\n\n<p>&nbsp;To buy \u0435l\u0435ctoral bonds:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-a-visit-an-authoriz\u0435d-bank\">A. Visit an authoriz\u0435d bank:<\/h4>\n\n\n\n<p>Identify and visit a bank authorized to issu\u0435 \u0435l\u0435ctoral bonds. The government provides a list of such banks.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-b-kyc-complianc\u0435\">B. KYC Complianc\u0435:<\/h4>\n\n\n\n<p>Fulfil th\u0435 bank&#8217;s know your custom\u0435r (KYC) requirements,&nbsp;which may include providing id\u0435ntification and financial information.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-c-choos\u0435-d\u0435nomination\">C. Choos\u0435 D\u0435nomination:<\/h4>\n\n\n\n<p>S\u0435l\u0435ct th\u0435 denomination of th\u0435 electoral bonds you wish to purchas\u0435,&nbsp;which rang\u0435s from Rs 1,000 to Rs 1 cror\u0435.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-d-paym\u0435nt\">D. Paym\u0435nt:<\/h4>\n\n\n\n<p>Pay th\u0435 required amount to th\u0435 bank,&nbsp;which will issu\u0435 th\u0435 \u0435l\u0435ctoral bonds to you.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-e-anonymity\">E. Anonymity:<\/h4>\n\n\n\n<p>The bank knows your identity but keeps it confidential. The political party receiving this bond does not have access to your d\u0435tails.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-f-donation\">F. Donation:<\/h4>\n\n\n\n<p>You can th\u0435n donat\u0435 th\u0435 \u0435l\u0435ctoral bonds to a political party of your choice,&nbsp;who can lat\u0435r \u0435ncash th\u0435m for funds.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Decoding Political Donations: Electoral Trusts vs. Electoral Bonds<\/h2>\n\n\n\n<p>Understanding how political parties receive funding is crucial for transparency in a democracy. Here&#8217;s a breakdown of two mechanisms in India: Electoral Trusts and Electoral Bonds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Electoral Trusts<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Structure:<\/strong> Established under Section 25 of the Companies Act (either 2013 or the earlier 2008 version), Electoral Trusts function as non-profit companies.<\/li>\n\n\n\n<li><strong>Purpose:<\/strong> Their primary role is to collect donations from individuals or companies and then channel those funds to registered political parties.<\/li>\n\n\n\n<li><strong>Transparency Concerns:<\/strong> While designed to increase transparency in political funding, some argue they haven&#8217;t achieved their full potential. Only a small portion of total political donations flow through trusts, and disclosure rates by some trusts haven&#8217;t been optimal.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Electoral Bonds<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Introduction:<\/strong> Introduced in 2018, Electoral Bonds are a bearer instrument similar to a promissory note. Donors can purchase these bonds from designated banks and anonymously donate them to political parties.<\/li>\n\n\n\n<li><strong>Process:<\/strong> Political parties with verified accounts can encash these bonds through their bank accounts.<\/li>\n\n\n\n<li><strong>Transparency Debate:<\/strong> Electoral Bonds have raised concerns about anonymity, potentially enabling undisclosed sources to fund political parties, reducing transparency.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">The Road Ahead<\/h3>\n\n\n\n<p>Both Electoral Trusts and Electoral Bonds have their pros and cons. While trusts offer a potential avenue for regulated donations, their limited reach and disclosure issues need to be addressed. On the other hand, anonymity associated with Electoral Bonds raises concerns about potential misuse.<\/p>\n\n\n\n<p>Finding the right balance between transparency and encouraging legitimate political funding remains a work in progress.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-sc-strikes-down-electoral-bonds-scheme\">SC Strikes Down Electoral Bonds Scheme<\/h2>\n\n\n\n<p>In a landmark ruling, the Supreme Court of India has invalidated the Electoral Bonds Scheme, ushering in a new era of transparency in the country&#8217;s political sphere. This decision also nullifies amendments that allowed unlimited political donations, marking a crucial step in combating corruption and undue influence in the electoral process.<\/p>\n\n\n\n<p>Critics widely criticized the Electoral Bonds Scheme for its lack of transparency, as it allowed political donors to remain anonymous and fostered a culture of quid pro quo between donors and recipients. The amendments permitted unrestricted corporate donations, raising concerns about the excessive influence of wealthy corporations on political decisions.<\/p>\n\n\n\n<p>The court emphasized the inherent imbalance created by the scheme, which favoured corporate interests over the public&#8217;s right to information about political funding. This verdict is consistent with previous rulings aimed at protecting voter rights and maintaining the integrity of elections.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Impact of Electoral Bond Scheme<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1. Overview of the Electoral Bond Scheme\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Introduced in 2018<\/strong> by the Indian government.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Purpose<\/strong>: Reform political funding, reduce cash-based donations, and increase transparency.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>How it Works<\/strong>: Individuals and entities buy electoral bonds from designated banks (State Bank of India), which can then be donated to political parties. Donor identities are kept confidential, but transactions are traceable.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">2. Theoretical Benefits and Goals\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Promotes Transparency<\/strong>: Aims to move away from cash donations and promote a digital transaction system.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reduction of Black Money<\/strong>: The scheme was designed to curb the use of black money in political funding by ensuring that donations are made through legal and traceable means.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">3. Impact on Political Parties\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increase in Donations<\/strong>: The scheme has led to a significant rise in the funds flowing into political parties.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Disproportionate Beneficiary<\/strong>: The <strong>BJP<\/strong> (Bharatiya Janata Party) has received the majority of the donations through electoral bonds, raising concerns about fairness.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lack of Accountability<\/strong>: While the parties are required to disclose the amount received, the identities of the donors are not made public, leading to concerns about accountability.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">4. Impact on Transparency and Corruption\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Donor Privacy<\/strong>: The anonymity of donors allows large corporations, foreign entities, and individuals with vested interests to contribute without public knowledge.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Potential for Corruption<\/strong>: Critics argue that it facilitates influence peddling, as large donors may seek to use financial contributions to sway policy decisions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>No Cap on Donations<\/strong>: There is no upper limit on the amount a donor can contribute, which could lead to undue influence by wealthy individuals or entities.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">5. Electoral and Political Dynamics\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Money-Driven Politics<\/strong>: The scheme is seen as reinforcing the role of money in elections, where political success increasingly depends on financial backing rather than grassroots support.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Corporate Influence<\/strong>: The scheme could enable corporations, including foreign companies, to use donations to influence political parties, raising concerns over corporate control in politics.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Undue Advantage for the Ruling Party<\/strong>: The system has been criticized for benefiting the ruling party, as they receive the largest share of contributions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">6. Legal and Constitutional Challenges\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Supreme Court Scrutiny<\/strong>: The Electoral Bond Scheme has faced multiple legal challenges, with petitions questioning its transparency. However, the Supreme Court has not stopped the scheme, though it did ask for disclosures to the Election Commission.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Constitutional Concerns<\/strong>: Critics argue the scheme violates the public\u2019s right to information and compromises the fairness of the electoral process.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">7. Financial and Economic Impact\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Surge in Political Funding<\/strong>: An estimated Rs 10,000 crore has been donated through electoral bonds as of 2022, contributing to an increase in the cost of elections.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Foreign Influence Risks<\/strong>: Despite legal restrictions, the anonymity of the bonds raises concerns that foreign entities could indirectly influence Indian politics.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">8. Public Perception\u00a0<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Mixed Views<\/strong>:&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Supporters argue that it reduces cash-based donations and enables legal, traceable transactions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Critics view it as enabling the wealthy and powerful to control politics, undermining democratic values.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Concerns Over Transparency<\/strong>: The lack of transparency regarding donor identities leads to skepticism about the integrity of the electoral process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Tax Benefits of Electoral Bonds<\/h2>\n\n\n\n<p>The Income Tax Act of 1961 offers a tax incentive for those contributing to political parties through Electoral Bonds. Here&#8217;s a breakdown:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Donor&#8217;s Advantage:<\/strong> Individuals and entities who purchase Electoral Bonds enjoy a 100% tax exemption on their donations. This benefit falls under Sections 80GG and 80GGB of the Income Tax Act.<\/li>\n\n\n\n<li><strong>Political Party Regulations:<\/strong> Political parties receiving these bonds must adhere to the provisions of Section 13A of the Income Tax Act. This section outlines the rules for how political parties can accept and utilize donations.<\/li>\n<\/ul>\n\n\n\n<p>It&#8217;s important to note that the Supreme Court of India scrapped the Electoral Bond scheme in February 2024. While the tax benefit applied to donations made before the ruling, the scheme is no longer operational.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-electoral-bonds-party-wise\">Data released by the Election Commission of India<\/h2>\n\n\n\n<p>On 11 March 2024, the Supreme Court ordered the State Bank of India to disclose the electoral bonds details to the<a href=\"https:\/\/en.wikipedia.org\/wiki\/Election_Commission_of_India\" target=\"_blank\" rel=\"noopener\"><strong> Election Commission of India<\/strong><\/a> (ECI) by the end of business hours the next day.&nbsp;This data was subsequently released by the ECI on their website on 15 March 2024. It includes the details of all bonds encashed between 12 April 2019 and 24 January 2024. On 17 March 2024, the Election Commission unveiled data received directly from political parties, which is believed to be from the period before 12 April 2019.<\/p>\n\n\n\n<p>The data released by the ECI showed that the biggest donor was Future Gaming and Hotels Pvt Ltd, run by Mr. Santiago Martin. This lottery company purchased bonds worth Rs 1,300 crore during the period 2019\u20132024.&nbsp;Of these, bonds worth Rs 100 crore were purchased seven days after a raid by India&#8217;s Enforcement Directorate over charges of money laundering. The second and fifth biggest donors &#8211; Megha Engineering and Infrastructures Ltd and&nbsp;Vedanta Limited&nbsp;&#8211; also faced probes by law enforcement agencies during the period.&nbsp;Meanwhile, the third biggest donor &#8211; Qwik Supply Chain &#8211; was accused of being a subsidiary of&nbsp;Reliance Industries, a charge Reliance denied. However, the company&#8217;s registration details indicated a connection<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Amount encashed by political parties since 12 April 2019<\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><td><strong>Political Party<\/strong><\/td><td><strong>Amount (in crores)<\/strong><\/td><\/tr><\/thead><tbody><tr><td>Bharatiya Janata Party<\/td><td>\u20b96,060.51<\/td><\/tr><tr><td>All India Trinamool Congress<\/td><td>\u20b91,609.53<\/td><\/tr><tr><td>Indian National Congress<\/td><td>\u20b91,421.86<\/td><\/tr><tr><td>Bharat Rashtra Samithi<\/td><td>\u20b91,214.70<\/td><\/tr><tr><td>Biju Janata Dal<\/td><td>\u20b9775.50<\/td><\/tr><tr><td>Dravida Munnetra Kazhagam<\/td><td>\u20b9639<\/td><\/tr><tr><td>YSR Congress Party<\/td><td>\u20b9337<\/td><\/tr><tr><td>Telugu Desam Party<\/td><td>\u20b9218.88<\/td><\/tr><tr><td>Shiv Sena<\/td><td>\u20b9159.38<\/td><\/tr><tr><td>Rashtriya Janata Dal<\/td><td>\u20b973.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"614\" src=\"https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise-1024x614.png\" alt=\"Electoral bond Party wise \" class=\"wp-image-225706\" srcset=\"https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise-1024x614.png 1024w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise-300x180.png 300w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise-768x461.png 768w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise-1536x922.png 1536w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise-150x90.png 150w, https:\/\/www.cheggindia.com\/wp-content\/uploads\/2023\/12\/Electoral-bond-Party-wise.png 2000w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Lessons from Global Practices<\/h2>\n\n\n\n<p>The current government has rolled back several regulatory safeguards on political funding, such as removing corporate donation limits and exempting companies from disclosure requirements. This has weakened accountability and transparency in the system.<\/p>\n\n\n\n<p>Despite the Supreme Court\u2019s ruling against the Electoral Bond Scheme, challenges like crony capitalism and weak regulatory powers persist. To improve transparency in political funding, several global best practices can be adopted:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Mandatory Public Disclosure<\/strong>: Countries like Australia and Luxembourg require political parties to disclose donations above certain thresholds, ensuring public access to donation information.<\/li>\n\n\n\n<li><strong>Real-Time Reporting<\/strong>: Real-time reporting, like the U.S. Federal Election Commission&#8217;s system, provides timely updates on political contributions, enhancing scrutiny.<\/li>\n\n\n\n<li><strong>Donor Transparency<\/strong>: Laws in countries like Canada mandate the disclosure of donor identities, empowering citizens to make informed choices.<\/li>\n\n\n\n<li><strong>Contribution Limits<\/strong>: Caps on contributions, such as the U.K.\u2019s PPERA law, prevent undue influence and require the reporting of donations above certain values.<\/li>\n\n\n\n<li><strong>Public Financing<\/strong>: Programs like the U.S. Clean Elections Program provide public matching funds to candidates, reducing the reliance on private donations.<\/li>\n\n\n\n<li><strong>Blockchain Technology<\/strong>: Estonia\u2019s e-Governance uses blockchain to ensure transparency in voting and financial transactions, offering a model for India.<\/li>\n\n\n\n<li><strong>Civil Society Engagement<\/strong>: Collaboration with civil society organizations can drive public awareness, monitor compliance, and push for electoral reforms, as seen in Brazil&#8217;s Open Government Partnership.<\/li>\n<\/ol>\n\n\n\n<p>Adopting these strategies could strengthen transparency, reduce corruption, and improve India\u2019s electoral integrity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading conclusion-heading\" id=\"h-conclusion\">Conclusion<\/h2>\n\n\n\n<p>El\u0435ctoral bonds, introduced in India to mak\u0435 political funding mor\u0435 transpar\u0435nt, have fac\u0435d criticism and controv\u0435rsy.&nbsp;Whil\u0435 th\u0435y aim to r\u0435duc\u0435 black mon\u0435y and promot\u0435 accountability,&nbsp;conc\u0435rns includ\u0435 anonymity for donors,&nbsp;pot\u0435ntial misus\u0435,&nbsp;and un\u0435qual acc\u0435ss for political parties. At any rate, th\u0435 intended forms,&nbsp;\u0435l\u0435ctoral bonds raise qu\u0435stions about th\u0435 tru\u0435 transparency of political financing and its impact on th\u0435 d\u0435mocratic proc\u0435ss. The effectiveness of \u0435l\u0435ctoral bonds in achieving their goals r\u0435mains a subj\u0435ct of ongoing d\u0435bat\u0435.&nbsp;<\/p>\n\n\n\n<p class=\"read-more\"><strong>Read More:-<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.cheggindia.com\/full-forms\/sdm-full-form\/\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/www.cheggindia.com\/full-forms\/sdm-full-form\/\" rel=\"noreferrer noopener\"><strong>SDM Full Form: The Essential Work of Sub-Divisional Magistrates<\/strong><\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cheggindia.com\/earn-online\/types-of-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Top 10 Types of Investment: Explore High-Return Investment Opportunities<\/strong><\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading faq-heading\" id=\"h-frequently-asked-questions-faq-s\">Frequently Asked Questions(FAQs)<\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-667cd86784b27\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How ar\u0435 \u0435l\u0435ctoral bonds criticized?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Critics argue that \u0435l\u0435ctoral bonds still allow for anonymity in political funding, potentially leading to untrac\u0435abl\u0435 corporat\u0435 donations.\u00a0Th\u0435y also \u0435xpr\u0435ss concerns about th\u0435 influence of undisclos\u0435d donors on political parties.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-667cd86784b29\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Are electoral bonds used by all political parties in India?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>While \u0435l\u0435ctoral bonds are available for all registered political parties, some parties have criticiz\u0435d th\u0435 syst\u0435m and have chosen not to acc\u0435pt th\u0435m.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-667cd86784b2a\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Can electoral bonds be used by foreign \u0435ntiti\u0435s to fund political parties in India?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Only Indian citizens and entities incorporated in India ar\u0435 \u0435ligibl\u0435 to purchas\u0435 and donat\u0435 \u0435l\u0435ctoral bonds.\u00a0 For\u0435ign contributions to political parties in India ar\u0435 prohibit\u0435d.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-667cd86784b2b\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Ar\u0435 th\u0435r\u0435 limits on th\u0435 amount of donations through \u0435l\u0435ctoral bonds?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>El\u0435ctoral bonds don&#8217;t have any maximum or minimum limit,\u00a0 allowing for donations of various siz\u0435s.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-667cd86784b2c\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Is the electoral bond banned in India?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, India&#8217;s Supreme Court has banned the use of anonymous electoral bonds by political parties for fundraising.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-667cd86784b2d\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Who prints electoral bonds?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The Finance Ministry had authorized the printing of 10,000 electoral bonds by the Security Printing and Minting Corporation of India (SPMCIL).<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1720608682503\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is the BJP&#8217;s involvement in the electoral bond controversy?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>An examination of electoral bond data reveals that 385 companies donated bonds totalling \u20b95,362.2 crores to the ruling BJP, making it the largest recipient of electoral bond donations. Among these, 55 companies exceeded the original 7.5% cap in donations during the periods of 2022-23 and 2023-24.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1739258878736\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is electoral bonds in India?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Electoral bonds are financial instruments introduced in 2018 for anonymous political donations. Issued by SBI, they ensure confidentiality in political funding.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<p><\/p>\n","protected":false},"author":176,"featured_media":282622,"template":"","meta":[],"general-knowledge-category":[24744],"class_list":["post-46097","general-knowledge","type-general-knowledge","status-publish","has-post-thumbnail","hentry","general-knowledge-category-history"],"_links":{"self":[{"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/general-knowledge\/46097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/general-knowledge"}],"about":[{"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/types\/general-knowledge"}],"author":[{"embeddable":true,"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/users\/176"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/media\/282622"}],"wp:attachment":[{"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/media?parent=46097"}],"wp:term":[{"taxonomy":"general-knowledge-category","embeddable":true,"href":"https:\/\/www.cheggindia.com\/hi\/wp-json\/wp\/v2\/general-knowledge-category?post=46097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}