Union minister Arun jaitley at BJP head office on Wednesday. (Express photo by Prem Nath Pandey)
Amid the ongoing debate about transparency of electoral bonds, Finance Minister Arun Jaitley on Thursday defended the use of electoral bonds, saying that if the donors are asked to disclose names of political parties to whom they give money, it would result in return to the earlier system of usage of cash and black money in political funding.
Jaitley said the debate on electoral bonds is “ill informed” and that the bonds are a step ahead from the earlier measures of using cheques and electoral trusts for political funding.
Terming the non-disclosure of names of political parties to which the money has been given as the only non-transparent factor, Jaitley said the other two steps —the purchase of electoral bonds and the encashment of electoral bonds by political parties in their official account — are totally transparent since those steps are happening through banking channels.
“You buy bonds through a banking channel, the bank knows your identity, your balance sheet will disclose your name when you bought so many bonds. So a reasonably transparent step … the only non-transparent factor is that how you distribute it, (which) is known to you as a donor. Now if you ask people to disclose that also, then I am afraid the cash system will be back,” Jaitley said in response to a question by Uday Kotak, managing director and CEO, Kotak Mahindra Bank, on the role of electoral bonds in the path of electoral reforms at the CII Annual Session 2019. The SBI has sold electoral bonds worth Rs 1,716 crore in January and March this year against the Rs 1,056 crore of bonds sold in 2018. The Centre notified the Electoral Bond Scheme on January 2, 2018. “Since the launch of the scheme, a total of around Rs 2700 crore worth of electoral bonds were sold till March 29. We are continuing with the planned sale in April and May as well,” a senior government official said.
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The Election Commission, in an affidavit before the Supreme Court which is hearing the matter, has said that it had conveyed to the Centre, in 2017, that the changes made in several laws related to political funding would have “serious repercussions/ impact on the transparency aspect… of funding of political parties”.
System still suffers from the lack of transparency
Electoral bonds are interest-free bearer instruments (like Promissory Notes) that are available for purchase from the State Bank of India within a designated window of 10 days in every quarter of the financial year. An additional period of a month is notified in the year of Lok Sabha elections. While this is an improvement over the practice of cash donations, this electoral bonds system still suffers from the lack of transparency.
The government had brought in electoral bond scheme as an alternative to cash donations made to political parties as part of its efforts to bring transparency in political funding. Under the scheme, the name of the donor is known only to banks. Jaitley also said that people are finding flaws but not suggesting alternative solutions. “There is a particular psyche of individuals, particularly in the NGO sector, that they don’t suggest a solution but they have a problem with every solution. The EC … has also succeeded in many, many areas and became an extremely successful role model Election Commission. But money it has not been able to control,” Jaitley said.
A bench headed by Chief Justice Ranjan Gogoi will hear the pleas challenging the validity of the Centre’s decision on issuance of electoral bonds for political funding on April 5.
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