Finance minister Jaitley seeks suggestions from political parties on electoral bonds
He told the Rajya Sabha that individuals and companies will be allowed to invest in the proposed electoral bondsindia Updated: Mar 23, 2017 23:17 IST
Finance minister Arun Jaitley on Thursday sought suggestions from political parties on funding election expenditures by raising money through bonds in a bid to clean up the electoral process.
Jaitley told the Rajya Sabha that individuals and companies will be allowed to invest in the proposed electoral bonds through cheques from designated banks and the identity of the investors will be kept secret as it is the case in any other banking transaction.
“I want all political parties to give suggestions on electoral bonds. The objective is to cleanse the system,” Jaitley told lawmakers, participating in a debate on the Appropriation Bill.
On Wednesday, the Lok Sabha passed the Finance Bill with 40 amendments, including provisions in the RBI Act and Income Tax Act, to allow banks to issue electoral bonds to fund election spending.
Highlighting the Narendra Modi government’s intention to push forward electoral reforms, Jaitley said it will benefit opposition parties as well.
At present, a company can contribute up to 7.5% of the average of its net profits in the last three financial years to political parties. The company is required to disclose the amount of contributions made to political parties in its profit and loss account, along with the name of the political parties to which such contribution was made.
The amendments to the Finance Bill removed the limit of 7.5% and the requirement of a company to disclose the name of the political parties to which a contribution has been made.
In addition, contributions to political parties will have to be made only through a cheque, bank draft, electronic means, or any other scheme such as bonds.
The proposed electoral bonds will be issued by notified banks for an amount paid through cheque or electronic means.
Buyers of electoral bonds will get tax exemption, Jaitley said.