Electoral bonds launched in clean-up bid

New Delhi: The government on Tuesday notified a scheme of electoral bonds in a bid to clean the system and bring transparency in political funding in the country.
Announcing the launch of the scheme in Parliament, Finance Minister Arun Jaitley said the electoral bonds will bring a substantial amount of transparency in political donations against the present system of contributions.
The electoral bonds will be a bearer instrument in the nature of a promissory note and interest-free banking instrument which any citizen or a corporate body will be eligible to purchase.
The bonds would be issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore from specified branches of SBI.
The purchaser would be allowed to buy the bonds after fulfilling the KYC norms and by making payment from a bank account. It will not carry the name of the payee.
The bonds would have a life of only 15 days during which it can be used for making donations only to registered political parties which have secured at least one per cent of the votes polled in the assembly or Lok Sabha elections.
“Fifteen days between buying and selling is to ensure that they don’t turn into parallel currency,” Jaitley said.
In his Budget speech last year, the finance minister had announced that the government would bring in a scheme of electoral bonds to clean the system of political funding in the country.
Jaitley told reporters later that the intention of floating these bonds is to bring transparency in the funding of political parties and the election funding mechanism at large.
“The political funding mechanism developed over the last 70 years has faced wide criticism as people don’t get clear details about how much money comes, from where it comes and where it is spent,” he said.
He said to change the system of anonymous donations, the government brought a change in 2001 which made all donations made through cheques tax-exempt but that did not make a huge impact as only a few parties got some money through cheques.
“Even today, anonymous donations are very large in quantity. This money is from unknown sources and is neither clean nor transparent,” he said.
The bonds under the scheme shall be available for purchase for a period of 10 days each in the months of January, April, July and October, as may be specified by the Central government. An additional period of 30 days shall be specified by the Central government in the year of Lok Sabha elections.
“The bond shall be encashed by an eligible political party only through a designated bank account with the authorised bank.”
Earlier in the Lok Sabha, Jaitley said the move would bring transparency as each donation will be reflected in the balance sheet of the donor.
“The element of transparency is that the donors who buy these bonds, their balance sheets will reflect they bought these bonds.
Political parties will file their returns to the Election Commission and collectively also say this is the extent of bonds we have received.
“Therefore, this will be cleaner money coming from the donor, cleaner money coming into the hands of a political party and there would be a significant amount of transparency,” said the minister.
Jaitley said there was no transparency when cash is given as the “source of money is not known, the donor is not known, where it is spent is not known”. — IANS