NEW DELHI: Defending electoral bonds, Finance Minister Arun Jaitley Sunday said they are aimed at checking the use of black money for funding elections, as was sought to be achieved through electoral trusts proposed during the UPA-II regime.
Highlighting the problem of black money in elections, Jaitley said as per reports ₹1,500 crore has been seized as a result of initiatives taken by the Election Commission and revenue authorities.
"Surprisingly the attack is against the bonds and not the electoral trusts because the earlier was brought by the NDA and the latter was by UPA. The underlying principle of both is the same," Jaitley said in his blog titled 'The Choice of Political Funding - Cheque, Electoral Bonds or Blackmoney from Contractors and middlemen'.
He further said in the absence of the electoral bonds, the donors will have no option but to donate only by cash after siphoning monies from their businesses.
"The recent Election Commission and IT raids have shown that it is taxpayers/ Government’s money, which, through PWD and other Departments of the Government, is being siphoned out and round-tripping into politics.
"Is that a better option or the reformed system of all white money and improved, if not a perfect transparency? NGOs and commentators must look beyond their nose," he added.
The Income Tax Department Sunday searched at least 50 locations in Delhi and Madhya Pradesh against people linked to state Chief Minister Kamal Nath, officials said.
The searches are linked to suspected movement of hawala money during the ongoing poll season and tax evasion, they added.
Last month, the tax department searched premises of aides of a JD(S) minister in Karnataka, leading to the state government dubbing the raids as politically motivated.
Similarly, searches were conducted at the premises of senior DMK leader Duraimurugan in Vellore district over suspected use of unaccounted money for electioneering and ₹10 lakh of alleged "excess" cash was seized.
The government had in 2018 brought in the 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 said both the electoral trusts, proposed by the then finance minister Pranab Mukherjee in 2010, and electoral bonds assured total white money and improved transparency but masked the identity of the link between the donor and the party.
"This obviously has been done to encourage donors to donate white money without fear of consequences," he said.
The minister said the past few days have witnessed several cases where the Election Commission and the revenue authorities, both separately and acting jointly, were trying to curb the use of black money in elections.
"These actions have been particularly significant in States like Karnataka, Tamil Nadu, Andhra Pradesh, North-East and Madhya Pradesh. The Election Commission and the Income-tax authorities work in close tandem during elections. In many cases, monies have been coming from Government contractors and beneficiaries," Jaitley said.
He said in one state, contractors passed on monies to engineers who were to distribute it to the candidates.
"In another State, which only four months ago elected a new Government, 50,000 Government transfers became a revenue generating exercise. Reports have also indicated that an amount of about Rs.1500 crore has already been seized," Jaitley added.