An electoral bond is a financial instrument for making donations to political parties. According to the Electoral Bond Scheme, 2018, it is a bond issued in the nature of a promissory note, which shall be bearer in character. A bearer instrument is one which does not carry the name of the buyer or payee, no ownership information is recorded and the holder of the instrument (i.e. political party) is presumed to be its owner.
The scheme allows individuals, who are citizens of India, and domestic companies to donate these bonds — issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore — to political parties of their choice. The Supreme Court of India on February 15, 2024, struck down the electoral bonds scheme for anonymous funding to political parties as “unconstitutional”.
As a chartered accountant, must confess to not understanding a word about this scheme, least of all its claims to transparency. The old dodge of allowing cash donations upto Rs 2,000 was proving insufficient, too many parchis to be cut. 2. All donations to political parties must necessarily be by cheque. If the donor is a public limited company, full details of how much has been given to whom should be part of the audited accounts. As a shareholder, I think giving even 7.5% of net profits is excessive. Each political party should display on its web site details of every single donation it receives. Nothing less should be acceptable in an era in which citizens are being driven to a cashless society. 3. Between the ECI and the apex court, these latest revelations in Huffington Post should induce a decisive intervention. That will still leave the mountains transacted in cash, but that is a story for another day.