An Electoral bond is a financial instrument which will be used to donate money to the political parties. This comes when the political parties have failed to lay down their source of total earnings transparently. It is thought that a lot of black money is pumped into the system by anonymous donations to the political parties especially during elections. Electoral bonds, are part of an innovative idea, is expected to curb black money supply in the electoral system and thereby establishing transparency.
But some of the features of these bonds can be misused and could lead to further opacity:
1. Anonymity of the donor: These bonds are not expected to carry payees name.
2. Denomination of the bonds: Their denominations from 1000 to 1 crore coupled with the above point of anonymity of the donor can lead to transferring of a lot of illegal funds into the electoral system.
3. Since they will be available only at the designated branches of SBI, there can be attempts to acquire them from illegal sources leading to frauds.
4. Bonds can also lead to crony capitalism as the companies can donate to the political parties in lieu of future favors.
5. It does not check the other ways through which the political parties acquire funds in cash which can be used during elections to lure voters.
Electoral bonds show the intention of the government to bring transparency in the electoral system but it needs some urgent improvements:
- Other banks should also be eligible to issue bonds so as to check probable fraud due to their scarce nature.
2. Better co-ordination between bank authorities and anti- corruption agencies.
3. EC should be kept informed of about the trends in funding of the various political parties especially during the elections.
4. Political parties should be incentivized appropriately to be fully complaint.
