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November 2, 2023 @ 7:30 am - 11:30 pm


Electoral bonds introduced in 2018 as a unique instrument for political funding have garnered attention and controversy due to their impact on transparency in funding for political parties.

About Electoral Bonds:

Nature: Electoral bonds are similar to promissory notes, purchasable by Indian citizens or entities established in the country from authorized SBI branches.

Process: Donors can acquire these bonds after submitting essential documents like proof of citizenship, KYC details, and a declaration on the fund’s source.

Denominations: Available in various denominations ranging from Rs 1,000 to Rs 1 crore, with payments facilitated via cheque, demand draft, or internet banking.

Anonymity: Designed to maintain donor anonymity, these bonds do not contain the donor’s name but rather a unique alphanumeric character.


Eligibility Criteria:

Verified Accounts: Political parties registered under Section 29A of the Representation of People Act, having secured at least 1% of the votes in recent Lok Sabha or State elections, are eligible to receive and deposit these bonds into accounts sanctioned by the Election Commission of India (ECI).

Validity and Deposits:

Timeframe: Electoral Bonds possess a validity period of fifteen calendar days from the date of issue. Deposits made after this period are deemed invalid.

Crediting to Party Accounts: Bonds deposited by eligible political parties within the validity period are credited to the respective party’s account on the same day.

Rationale Behind Bonds:

Past Funding System: Traditional donations faced issues with anonymity, cash donations below Rs 20,000 being untraceable, and larger donations required party declaration to the ECI.

Predominance of Cash: Cash donations were widespread, enabling donor anonymity and unaccounted money flow into politics.

Introduction of Electoral Bonds: To curtail cash donations and enhance transparency, the NDA government introduced electoral bonds.

Electoral Bonds’ Impact:

Political Parties’ Reliance: Major political parties utilized electoral bonds as a significant funding source, with the ruling BJP receiving the most substantial share.

Impact on Donations: Analysis showed a significant shift from anonymous contributions to contributions through electoral bonds for BJP and Congress, indicating an increase in formal banking system channelization.

Challenges and Partial Success:

Improved Formalization: Electoral bonds formalized a substantial part of political funding previously occurring through cash.

Transparency Concerns: Anonymity of donors prevents complete transparency, as the system lacks disclosure of donor identities.


Electoral bonds represent a move towards formalizing election funding historically made in cash, yet the absence of donor disclosure hampers transparency. While the bond system is an improvement, the lack of donor details poses challenges to complete transparency. Suggestions include voluntary donor disclosures and imposing caps on anonymous donations as proposed by the ECI, aiming to balance formalization and transparency in political funding.

Mains Question:

  1. Electoral bonds have been introduced in India to enhance transparency in political funding. However, they have also raised concerns about the anonymity of donors. Analyze the impact of electoral bonds on political funding, highlighting their role in formalizing the system and the challenges they pose to complete transparency. Suggest measures to strike a balance between formalization and transparency in political funding. (150 Words) 10M


November 2, 2023
7:30 am - 11:30 pm
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