Electoral bonds can be sold for 15 extra days during state elections

Sold four times a year (in January, April, July and October) for 10 days as notified by the government, electoral bonds allow political parties to accept money from donors whose identities are kept anonymous. They are sold in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore.

The department of economic affairs on Monday amended the electoral bonds scheme to allow their sale for 15 extra days during the “year of general elections to the legislative assembly of states and Union territories with legislature”.

Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding. (PTI)

Earlier, only an additional period of 30 days was allowed to be specified by the central government in the year of Lok Sabha elections. After the latest official gazette, additional 15 days will now be allowed in years that have state elections, too.

Sold four times a year (in January, April, July and October) for 10 days as notified by the government, electoral bonds allow political parties to accept money from donors whose identities are kept anonymous. They are sold in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore.

“An additional period of fifteen days shall be specified by the central government in the year of general elections to the legislative assembly of states and Union territories with legislature,” the gazette notification said.

Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding. The electoral bond scheme, first floated in 2017 and implemented in 2018, has met with criticism for lacking transparency. The critics have argued that since the bonds are sold through a government-owned bank, there is a possibility that the party in power can find out who is funding their political rivals.

The State Bank of India is the sole authorised bank to sell and redeem the bonds. Customers of other banks can also purchase the bonds via different payment channels provided to them. However, a political party can only redeem the bond from one of the 29 authorised branches of the bank.

The proposed changes will come under Section 8 of the notification of the scheme by the finance ministry. The original notification was issued on January 2, 2018.

According to the section, the bonds shall be available for purchase by any person for a period of 10 days each in the months of January, April, July and October as may be specified by the central government. “An additional period of 30 days shall be specified by the central government in the year of general elections to the House of People,” the notification says. With the latest change, 15 additional days will be provided in the years that have assembly elections, too.

Commodore Lokesh Batra (Retd.), an RTI activist said that the government’s decision was “shocking” especially when matter on Stay of controversial Electoral Bond scheme 2018 - is due to be heard by Hon’ble SC on December 06, 2022”.

“In 2018 government had already allowed illegal sales of EBs beyond the laid down period...Moreover, round the year some or other ‘general elections to the Legislative Assembly of States and Union territories with Legislature happens’ – so it amounts to adding 15 days sale period every year.” It is not clear if the government has amended the notification in consultation with the Reserve Bank of India.