Electoral bonds will have limited tenure: Arun Jaitley

New Delhi: Union finance minister Arun Jaitley said on Friday that the proposed “Electoral Bonds” for making donations to political parties will be bearer bonds and have a tenure of few days. The finance minister said the bearer bonds can be purchased by corporate donors and donated to political parties without revealing their identity.

He also justified levy of 10 per cent surcharge on rich, saying the resources in a largely non-tax compliant society will have to come from the more affluent. There are also indications that government may cap service charge on on-line transactions through credit and debit cards.

The bonds, which will resemble a promissory note and not an interest-paying debt instrument, will be sold by authorised banks and can be deposited in notified accounts of political parties within the duration of their validity.

“Every political party has to notify one bank account (where the bonds can be deposited). Within a very short period of time, which will be notified in the scheme, it will be days not months these will be redeemable only in that account of the political party,” he said.

Mr Jaitley said that the system has been devised where the there will confidentiality of the donor will be maintained but the money becomes “absolutely clean.” “You can contribute, donate money to a political party by cheque, you will be entitled to a deduction. We would like to incentivise people to give small donations in very large volumes through the digital mode,” he said.

He said bonds can be purchased using cheque or e-payments only. “So in the hands of the recipient it is clean money, in the hands of donor it will be tax paid money.”  Mr Jaitley said some of the political donations has stopped coming by cash, but that is only a small percentage.