Centre notifies electoral bonds
Move aimed at bringing greater transparency in donations to parties
NEW DELHI: The government on Tuesday notified electoral bonds as a new instrument for donations to political parties in a bid to clean up election funding.
Announcing the contours of the scheme, finance minister Arun Jaitley told Parliament the bonds will bring substantial transparency in political donations against the present system of anonymous contributions.
“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,” Jaitley said.
Though called ‘bonds’, it is an interest-free instrument in the nature of a promissory note, which can be purchased for any value in the multiples of ~1,000, ~10,000, ~1 lakh, ~10 lakh and ~1 crore from specified branches of the State Bank of India (SBI).
“A citizen of India or a body incorporated in India will be eligible to purchase the bond,” the ministry said in a statement.
The bonds can be bought after fulfilling SBI’s KYC norms while the payment can only be made from a bank account. The bonds will not carry the name of the donor, the statement added.
Political analysts said this is where electoral bonds will fail in their objective of bringing transparency in political funding.
“The fact that the donor remains anonymous is the most damaging aspect. Anonymity and transparency do not go together. If black money has to be removed, then all funds to political parties should be routed through digital payments,” said Jagdeep Chhokar, founding member of Association for Democratic Reforms.
Electoral bonds would have a life of 15 days during which it can be used for making donation only to the political parties registered under Section 29A of The Representation of the People Act, 1951, and can be redeemed only through registered bank accounts of the political parties.
Jaitley said the 15-day validity is to ensure that the bonds do not turn into a “parallel economy”.
Electoral bonds were announced in the Budget 2017-18 to bring transparency in the opaque system of political party funding, often plagued by allegations of corruption. To this end, the government had earlier capped anonymous cash donations to parties at ~2,000.
The bonds will be available for purchase for 10 days in January, April, July and October, and an additional period of 30 days that will be notified by the government during general elections.
These bonds will be part of the returns filed by political parties with the Election Commission.