Days after announcing the key features of electoral bonds in Lok Sabha, Finance Minister Arun Jaitley on Sunday said the mechanism would substantialy improve transparency in electoral funding, and invited suggestions to further cleanse the old system.
In a detailed Facebook post titled, ‘Why Electoral Bonds are Necessary,’ Jaitley talked about the conventional way of relying on cash donations for political funding. With anonymous sources and the quantum of donation undisclosed, “the present system ensures unclean money coming from unidentifiable sources,” he said.
“Most political groups seem fairly satisfied with the present arrangement and would not mind this status-quo to continue. The effort, therefore, is to run down any alternative system which is devised to cleanse up the political funding mechanism,” he added.
Saying that the electoral bonds would resolve this issue, Jaitley said that the choice has to be “consciously” made between the existing system of substantial cash donations involving unclean money and other transparent options like cheque, online transactions or electoral bonds.
“While all three methods involve clean money, the first two are totally transparent and the electoral bonds scheme is a substantial improvement in transparency over the present system of no-transparency,” the post further read. He also added that the name of the donor would be kept as secret as past experiences had shown that once the names were disclosed, there was a tendency to shift to cash donations.
Jaitley last week had announced the contours of new ‘electoral bonds’ that can be bought from specified branches of SBI in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore. The bearer instrument will not carry the name of the payee and will have a life of 15 days. During this time, the bonds can be used for making donations in favour of registered political parties and that it can only be encashed in a pre-declared account of the receiver.
These bonds can be bought only after fulfilling all the existing Know Your Customer (KYC) norms and by making payments from a bank account. They will be available for purchase for 10 days each in the months of January, April, July and October. The decision to use electoral bonds in political funding was first announced by Jaitley during his budget speech last year.
Adding that India, despite being a great democracy, has not been able to evolve a “transparent political funding system,” Jaitley said that the government will consider suggestions to bring in a more open system. “It has to be borne in mind that impractical suggestions will not improve the cash denominated system. They would only consolidate it,” Jaitley wrote.