What are Electoral Bonds?
This is an interesting concept regarding electoral bonds. A donor can donate a political party, funding without any provisions. The amount can be deposited in the bank in lieu of bonds without any interest. Here is some food for thought.
- It is a kind of a Promissory Note with an amount and date specified for the maturity date. Let us say, an individual ‘A’ donates INR 2,000 through a bond, which can mature in the future period. Then, with interest free bonds, the amount can be deposited at that maturity date.
- The transactions are made through NEFT, RTGS or Cheque. No cash transactions are made. The amount amassed can be worked on debt and equity instruments, including investments, which can be worked for profits, such that there is a cash-back guarantee for a percentage as a bonus through the bonds.
- The amount deposited through electoral bonding, can be worked for profit and invested. In simple words, investment banks can work on the amounts as well.
- The bonds can be purchased by any common citizen of India. The denominations are INR 2,000, INR 5,000, INR 10,000, INR 1 lakh and INR 1 crore as units. Most of them are clause free or interest free or with a cash back guarantee with 1% after a finite period of time.
- Funding individuals can also be a big factor in elections. An individual can also receive donations on an anonymous basis in a bank transaction. Let us say, if I make a transaction for an NGO, then I can use an anonymous name like ‘Ram Krishna Sevak’ for electoral funding. This pseudo account can be used for an alias purpose for receiving donations after a threshold limit is drawn.
Given the amount of ‘ghost’ transactions that can be made, all pseudo accounts can also play a regular part in converting black money to white money. This bonds can be tax free or serve in 80CC. SBI and other government owned banks can play a significant role.