what is electoral bonds upsc

Electoral bonds are instruments or securities that are used to donate funds to political parties anonymously. They were introduced with the Finance Bill 2017 and were notified in 2018. The State Bank of India is authorized to issue and encash these bonds, which are valid for 15 days from the date of issue. Donors can buy these bonds from a bank, and the political party can then encash them. Only political parties registered under Section 29A of the Representation of the People Act, 1951, and have secured not less than 1% of the votes polled in the last general election to the House of the People or the Legislative Assembly are eligible to receive electoral bonds. The donor shall be permitted to buy the bonds through cheque/digital payment, and the identity of the donors is protected. The concentration of political funding in a few cities under the Electoral Bond Scheme raises concerns about transparency and fairness in political financing. The Electoral Bond Scheme is relevant for the UPSC Mains, and aspirants should prepare this topic for General Studies Paper II.