Electoral Bonds

• A five-judge Constitution bench, headed by Chief Justice of India has stated that Electoral Bond scheme suffers from “selective anonymity” leading to an “information hole”.
• It has also directed the Election Commission of India (ECI) to submit within two weeks complete information on each and every donor and contributions received by political parties through EBs till September 30, 2023.

ABOUT ELECTORAL BOND SCHEME

• Electoral bonds are interest-free bearer bonds or money instruments that can be purchased by companies and individuals in India from authorised branches of the State Bank of India (SBI).
• Bonds are available for purchase in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore.
• These can be bought through a KYC-compliant account.
• There is no limit on the number of electoral bonds that a person or company can purchase.
• Every party registered under section 29A of the Representation of the People Act and having secured at least 1% of the votes polled in the most recent Lok Sabha or state election has been allotted a verified account by ECI.
• The political party has to encash the amount within those 15 days, otherwise the amount received as a donation gets deposited into the Prime Minister’s Relief Fund.
• The government brought in amendments to four Acts-
  • Representation of the People Act, 1951, the Companies Act, 2013, the Income Tax Act, 1961, and the Foreign Contributions Regulation Act, 2010, through the Finance Acts of 2016 and 2017.
  • The government removed the limit of 7.5 per cent of the annual profit for companies to make donations to political parties and allowed Indian subsidiaries of foreign companies to make donations.
• EBs are available for a period of 10 days in a gap of four months (January, April, July and October).
  • They are also open for 30 days in Lok Sabha election years.