What are electoral bonds? Explained simply

In Indian politics, electoral bonds emerged as a pivotal yet contentious instrument since their introduction in 2017. These bonds represent a unique method for individuals and corporate entities to financially support political parties while maintaining anonymity.

Under the electoral bond scheme, donors purchase these special bonds from designated branches of the State Bank of India. Once acquired, the bonds can be gifted to any registered political party without the need to disclose the identity of the contributor. This anonymity aspect garnered both praise and criticism with proponents highlighting its potential to shield donors from undue influence or reprisal, while detractors raised concerns about the lack of transparency in political funding.

Despite their anonymity, electoral bonds were subject to specific rules and regulations. Only political parties registered under relevant laws were eligible to receive funds through these bonds. Furthermore, there were restrictions on the denominations of bonds available, ranging from as low as Rs 1,000 to as high as Rs 1 crore.

The use of electoral bonds sparked debates on the efficacy of ensuring transparency and accountability in political financing. Critics argued that the anonymity provided by these bonds undermined the democratic process by concealing the true sources of funding, potentially allowing for corruption or undue influence.