Union Finance Minister Arun Jaitley on Tuesday outlined the basic contours of the electoral bonds scheme announced during the 2017 Budget, including their denominations, validity, and eligibility of the purchasers.
“Electoral bonds would be a bearer instrument in the nature of a promissory note and an interest-free banking instrument,” the Minister said in the Lok Sabha. “A citizen of India or a body incorporated in India will be eligible to purchase the bond.”
KYC norms
Electoral bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India. “The purchaser will be allowed to buy electoral bonds only on due fulfilment of all the extant KYC norms and by making payment from a bank account,” Mr. Jaitley said. “It will not carry the name of the payee.”
The bonds, aimed at increasing transparency in political funding, will have a life of 15 days during which they can be used to make donations to registered political parties that have secured not less than 1% of the votes polled in the last election to the Lok Sabha or Assembly.
The bonds shall be available for purchase for a period of 10 days each in the months of January, April, July and October, with an additional 30 days to be specified by the Central government in the year of a general election. “The bond shall be encashed by an eligible political party only through a designated bank account with the authorised bank,” he said.
Mr. Jaitley told reporters later that the aim was to bring transparency in funding of political parties and elections. “The political funding mechanism developed over the last 70 years has faced widespread criticism as people do not get clear details about how much money comes, from where it comes and where it is spent,” he said.
PTI adds...
When Congress leader Mallikarjun Kharge asked what purpose the bonds would serve when the name of the donor is not disclosed, Mr. Jaitley said bonds would get reflected in the balance sheet of the donors.“Let me clear misconceptions, if any. I had announced in budget speech that political funding needs to be cleansed up. A very large part of donation coming to political parties by the donors, quantum and source is not known... electoral bonds substantially cleanse the system,” he said.
Electoral bonds, he said, can be given to a registered political party, which has secured at least 1% vote in last election. That party will have to give a bank account to the Election Commission and it will have to be encashed within 15 days, Mr. Jaitley said.
“(For) donors who buy these bonds, their balance sheet will reflect (the purchase). It will ensure cleaner money coming from donors, cleaner money coming to political party and ensure significant transparency,” he said. The Minister said at present, the donor, the quantum and the source of funds is not known. “The donor will know, which party he is depositing money to. The political party will file return with the election commission. Now, which donor gave to which political party, that is the only thing which will not be known,” he said. “Electoral bonds will ensure clean money and significant transparency against the current system of unclean money”.
Only political parties which has secured not less than 1% of the votes polled in the last general election or an Assembly poll would be eligible to receive donations through electoral bonds, Mr. Jaitley said. Later talking to reporters, he said the 15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency.
“Every political party will file before Election Commission return as to how much money has come through electoral bonds,” the Minister said. On why the name of the donor is being kept secret, he said the past experience has shown that once the names are disclosed, there is a tendency to shift to cash donations. “The present system is unclean money and new system is a substantial amount of transparency if not total,” he added.
The idea is to move away from present system, which is cash, Mr. Jaitley said. “This will substantially help a lot of opposition parties because in case a disclosure is made it will always be in favour of ruling party,” he said. “People who are expressing apprehension let them suggest better way.”
( With inputs from IANS )
