New Delhi: The union government on Tuesday announced details of political funding that can be routed by donors to parties through electoral bonds, a scheme announced by it in Union Budget 2017.
Electoral bonds will allow a political donor to purchase bonds from authorized banks. These can be redeemed only through the registered accounts of a political party in a prescribed time frame.
In line with the Election Commission’s recommendation, the government in last year’s budget session also capped anonymous cash donations to political parties at Rs2,000.
On Tuesday, finance minister Arun Jaitley said the electoral bonds, which are interest-free banking instruments, can be bought from specified branches of State Bank of India in multiples of Rs1,000, Rs1 lakh, Rs10 lakh or Rs1 crore.
The life of the electoral bonds will be 15 days and they can be encashed only by registered political parties through a designated bank account.
“The scheme has been placed before Parliament. Till today, people did not get explicit information on how much funds political parties got from which source and how they spent it. In 2001, we introduced a change to enable funding through cheque. But the share of anonymous funding is still high. The electoral bonds scheme is meant to change this," Jaitley told reporters.
“Whoever wants to donate electoral bonds, can buy them from any of the notified branches of SBI. The validity of the bonds is kept at 15 days so that this does not become a parallel currency. Every political party will have to file returns to the Election Commission on how much funds have been received," he said, adding that this was the “beginning" of reforms in political funding and hinted at more measures later.
The electoral bonds will be available for purchase for a period of 10 days each in the months of January, April, July and October, as specified by the government. Additionally, a 30-day period will be specified by the central government in the year of general elections.
Analysts said the move could end up bringing in more opacity in political funding and could be misused, given the lack of disclosure requirements for individuals purchasing electoral bonds.
“There are only three new pieces of information in what was announced today: the designated bank, life of the bonds and denominations. These do not help. Electoral bonds continue to be designed to make political and electoral funding even more opaque. It will bring more and more black money into the political system," said Jagdeep Chhokar, founding member of the New Delhi-based Association for Democratic Reforms (ADR).