In his bid to “cleanse the system of political funding in the country,” Finance Minister Arun Jaitley reiterated the importance of electoral bonds to develop a smooth and transparent political funding mechanism in India on Sunday, 7 January.
In a Facebook blog titled, “Why Electoral Bonds are Necessary,” Jaitley points out that the conventional practice of political funding is to take donations in cash, which keeps the source of the money anonymous and the quantum of money is never disclosed.
The present system ensures unclean money coming from unidentifiable sources. It is a wholly non-transparent system. Most political groups seem fairly satisfied with the present arrangement and would not mind this status quo to continue.Arun Jaitley in his blog.
Jaitley cited his Budget speech from 2017, when he announced that donors could enjoy tax deduction by paying via cheque or online transfer, but cash donations could not exceed Rs 2,000.
In the note, Jaitley admitted that online and cheque donations are ‘ideal’, but electoral bonds are a better alternative since they do not disclose the donor’s identity.
A donor can purchase electoral bonds from a specified bank only by a banking instrument. He would have to disclose in his accounts the amount of political bonds that he has purchased. The life of the bond would be only 15 days. A bond can only be encashed in a pre-declared account of a political party. Every political party in its returns will have to disclose the amount of donations it has received through electoral bonds to the Election Commission.
The Union minister concluded the blog by saying that while all three methods – cheque, online transfer or electoral bonds – involve clean money, the last scheme is a substantial improvement in transparency over the present system of no-transparency ie cash donations.
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