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What Are Electoral Bonds?


Just a year ahead of the main general assembly elections in 2019, the government on Tuesday came out with details of electoral bonds for political funding. A scheme for the first time was announced in the Union Budget 2017.

What Are Electoral Bonds?

Objectives of issuing electoral bonds

1. To know the exact amount of funding received by political party during elections

2. To curb instances or reduce to significant degree anonymous funding to political parties.


1. Primarily for funding political parties: Especially for funding political parties that are registered with the government cannot be used for any other purpose. And the receiving party through a bank account can then redeem the amount.

2. No coupon or interest rate: These bonds issued shall not bear any interest or coupon rate as that is available with other government or corporate bonds. This said the person holding these bonds or buying them will not be paid any interest amount.

3. Validity of 15 days: With a validity of just 15 days from the date of purchase, the electoral bonds features short term validity.

4. Anonymity shall be maintained: The receiving party shall know about the individuals who are donating through the electoral bonds.

5. Tax free: Work as bearer bonds and do not arise any tax implications

6. Specified SBI branched can be approached for purchasing electoral bonds: For 10 days each, such bonds shall be available in the month of January, April, July and October.

7. Available in multiples of Rs. 1000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore.

But as against the objective, the experts hail the introduction of electoral bonds to result in more opaqueness in political funding during elections as the disclosure clause is absent.

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