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Business News/ News / India/  As SC calls electoral bonds unconstitutional, here's what Arun Jaitley had said while defending the scheme

As SC calls electoral bonds unconstitutional, here's what Arun Jaitley had said while defending the scheme

Former finance minister Arun Jaitley had defended the electoral bond scheme, stating that it aimed to check the use of black money in funding elections.

File image of former finance minister Arun Jaitley.Premium
File image of former finance minister Arun Jaitley.

The Supreme Court on February 15 pronounced the verdict on a batch of petitions challenging the validity of the electoral bond scheme, which allows for anonymous funding to political parties. The top court in its verdict struck down the electoral bond scheme by terming it unconstitutional. The SC also held that the electoral bond scheme is violative of Article 19(1)(a) and unconstitutional. 

Also Read: Supreme Court strikes down Electoral Bond Scheme, calls it ‘unconstitutional’. Here are top seven things the judges said

However, in 2019, the late Arun Jaitley, the then finance minister, had defended the electoral bond scheme and said that it was 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.

Electoral Bonds Scheme verdict LIVE updates

Jaitley had 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.

On January 7, 2018, Arun Jaitley had also issued a statement on the necessity of electoral bonds.

Also Read: Electoral Bond Scheme verdict: SC orders SBI to disclose details of political parties receiving electoral bonds to date

He had said, “India is the largest democracy in the world. However, despite strengthening various institutions for the last seven decades, India has not been able to evolve a transparent political funding system. Elections and political parties are a fundamental feature of Parliamentary democracy. Elections cost money. The round-the-year functioning of the political parties involves a large expenditure."

Jaitley had also mentioned that political parties have hundreds of crores of expenditure right from staff salaries, travelling expenses, establishment costs, election campaigns, publicity, etc, yet there was no transparent funding mechanism of the political system.

“A major step was taken during the first NDA government led by Shri Atal Bihari Vajpayee. The Income Tax Act was amended to include a provision that donations made to political parties would be treated as expenditure and would thus give a tax advantage to the donor. If the political party disclosed its donations in a prescribed manner, it would also not be liable to pay any tax. A political party was expected to file its returns both with the income-tax authorities and Election Commission. It was hoped that donors would increasingly start donating money by cheque. Some donors did start following this practice but most of them were reluctant to disclose the details of the quantum of donation given to a political party," the former finance minister wrote. 

He had further said, “I do believe that donations made online or through cheques remain an ideal method of donating to political parties. However, these have not become very popular in India since they involve disclosure of donor’s identity." Speaking about the electoral bond scheme which he had placed before Parliament, he said, "It envisages total clean money and substantial transparency coming into the system of political funding. A donor can purchase electoral bonds from a specified bank only by a banking instrument. He would have to disclose in his accounts the amount of political bonds that he has purchased."

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Published: 15 Feb 2024, 11:43 AM IST
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