Union Finance Minister Arun Jaitley on Wednesday said the proposed electoral bonds will be open a few days ahead of elections and these will be redeemable within two to three weeks. He added that the bonds announced in Union Budget 2017-18 to promote legitimate funding of political parties cannot become a parallel currency and thus would be valid only for a specific duration.
On the issue of state funding of elections, Jaitley said it needs to be debated as cynics may question why people should be taxed extra to fund elections and there is “no guarantee” that outside money will not find its way into campaign financing.
Speaking at a lecture “Towards a New Polity: Campaign Finance Reform in India” at an event organised by Dr Syama Prasad Mookerjee Research Foundation and Nehru Memorial Museum and Library, Jaitley said, “The scheme will be announced once the Finance Bill is passed. The scheme will only open for a limited period of time during elections or maybe a little before the elections. The life of a bond will be very short, maybe a few days. Why do we take these precautions, knowing the manner in which people have laundered money, a bond should not become a parallel currency, so that people start transacting in bonds. It will only be available for a few days. The bond can be purchased by any donor by cheque payment from an authorised bank. You can only donate these bonds to political parties. And these will be redeemable within a period of three or four weeks of the purchase of the bond in only one bank account of a political party.”
Showing his concern on the earlier collections of political funds in rural areas and small towns, he said grassroots collections have slowed down and almost faded away, which is a cause for concern. Jaitley added that political parties should start digital campaigns to receive donations and that electoral bonds are totally clean, though partly transparent.
To ensure greater transparency in political funding, the Union Budget 2017-18 announced that any anonymous cash donation to a political party will now be limited to Rs 2,000 from the earlier limit of Rs 20,000. For any amount above this people will have to resort to cheque and digital payments. The decision of the government to reduce cash donations will require political parties receiving a donation above Rs 2,000 to disclose the identity of the donor.
While this gives the donor the option of remaining anonymous, both ends of the transaction will happen through the banking system.
(This Report was published in The Statesman on 8th march 2017)