Electoral bonds will protect donors’ identity: FM Jaitley in Lok Sabha
Names of people donating money to political parties through electoral bonds will be kept secret, finance minister Arun Jaitley said on Thursday, scotching fears of a backlash on donors by rival groups.
He, however, ruled out the possibility of state funding of elections, a suggestion that has been made by several parties.
In this year’s annual budget, the government proposed to introduce electoral bonds, which donors would be able to purchase from authorised banks and redeemable only in the designated account of a political party.
Also, it reduced the limit of party donations from one source — from Rs 20,000 to Rs 2,000 — to bring transparency in political funding. Most political parties receive a bulk of their donations in cash under Rs 20,000, which allows donors to remain anonymous.
These measures were taken to prevent political parties from becoming conduits for black money.
Speaking in the Lok Sabha on Thursday, Jaitley defended the bonds as an initiative that will check the flow of unaccounted-for cash into the political system. He said these have been designed to protect the identity of the donor.
“People donating to a political party usually don’t like to disclose their identity as they fear repercussions from rival political parties. By purchasing electoral bonds, they can keep their identity secret,” the minister said.
Opposition parties and election watchdogs were sceptical about the move, aimed at checking the inflow of illegal money to parties.
Jaitley argued that people prefer to donate in cash because of anonymity clause.
“…We have made a serious effort to legitimise this. We have said that you pay by cheque, then the donor and the receiver both will get tax advantage. We have said pay by digital mode,” he said.
Besides, the bonds will have a validity period of a few days, and will resemble a promissory note. These can be deposited in registered accounts of political parties within a particular time-frame.
The minister was not keen on state funding to offer a fair playing field for poor parties contesting elections.
“I am open to the idea. But your optimism is based on the fact that when state funding starts only state-provided funds will be used in elections and nobody will use private funds in elections. So your optimism is based on this one belief which is not consistent with Indian reality.”
Experts believe electoral reforms in the world’s largest democracy are overdue. Besides measures to clean up the system, Prime Minister Narendra Modi is pushing for simultaneous Lok Sabha and assembly elections in states, a move that will help reduce poll expenditure.
President Pranab Mukherjee has echoed similar views.
Taking a cue, Jaitley said the government has proposed solutions to bring transparency in electoral funding but “it will not take us anywhere” if the Opposition finds fault with every reform.