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Unraveling the Controversy: A Deep Dive into Electoral Bonds in India

In 2018, India introduced electoral bonds as a financial instrument to streamline political



funding. Main intention was to curb black money, increase transparency, and encourage legal corporate contributions, electoral bonds have become a topic of heated debate. This post aims to dissect the nuances surrounding electoral bonds, exploring their functions, objectives, and criticisms.


Electoral Bonds - How They Work:

Electoral bonds, available in denominations ranging from Rs 1,000 to Rs 1 crore, can be purchased from authorised branches of the State Bank of India. These bonds, akin to bearer instruments, allow for the transfer of ownership without any recorded buyer information. Political parties meeting specific criteria can encash these bonds within 15 days, maintaining the anonymity of the donor.


Objectives Behind Electoral Bonds:

The Indian government introduced electoral bonds with three main objectives. First, to curb black money by promoting official channels for donations, thus reducing cash transactions and money laundering. Second, to increase transparency by necessitating Know Your Customer (KYC) compliance for bond purchases. Third, to facilitate legal corporate contributions, potentially reducing reliance on obscure funding sources.



Criticisms and Concerns:


Despite these objectives, electoral bonds have faced significant criticisms. The anonymity they afford donors raises concerns about the undue influence of special interests and corporations on political parties. Additionally, the lack of transparency in the encashment process fuels worries about potential misuse of funds. Questions persist about the effectiveness of the scheme in truly curbing black money, as alternative methods of illegal funding may still persist.


Synopsis of the Current Electoral Bond Sale:


As of January 2nd to 11th, 2024, electoral bonds are available for purchase at authorized branches of the State Bank of India. Eligible buyers include Indian citizens or entities incorporated in India, while political parties meeting specified criteria can receive these bonds. The entire process is facilitated through 29 designated SBI branches across India, with a validity period of 15 calendar days.


For more details on the ongoing sale, interested readers can refer to the official press release linked here.


Conclusion:

Electoral bonds remain a contentious issue in Indian politics. Supporters argue for their role in curbing black money and increasing transparency, while critics express concerns about donor anonymity and potential misuse. As the debate continues, it's essential to closely monitor the impact of electoral bonds on political funding in India.


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