New Delhi: Union finance minister Arun Jaitley said on Sunday that the electoral bonds mechanism recently notified by the government was a substantial improvement in transparency over the present system and added that the government was open to suggestions to further cleanse political funding.
“Elections cost money. The round-the-year functioning of political parties involves a large expenditure. There has not been a single year where elections, either for Parliament or the state Assemblies, have not been held,” Mr Jaitley said in a Facebook post.
The finance minister wrote: “The government is willing to consider all suggestions to further strengthen the cleansing of political funding in India. It has to be borne in mind that impractical suggestions will not improve the cash system. These would only consolidate it.”
He pointed out that the conventional system of political funding was to rely on donations. “These donations, big or small, come from a range of sources — from political workers, sympathisers, small business people and even large industrialists. The conventional practice of funding the political system was to take donations in cash and undertake these expenditures in cash. The sources are anonymous or pseudonymous. The quantum of money was never disclosed,” said Mr Jaitley. He noted that the present system ensures unclean money coming from unidentifiable sources. It is a wholly non-transparent system. “Most political groups seem fairly satisfied with the present arrangement and would not mind this status quo to continue. The effort, therefore, is to run down any alternative system which is devised to clean up the political funding mechanism,” he said.
He said that the electoral bond scheme he had placed before Parliament last week envisages totally clean mo-ney 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 he has purchased. The life of the bond would be only 15 days. A bond can only be encashed in a pre-declared account of a political party,” said Mr Jaitley. He said every political party, in its returns, will have to disclose the amount of donations it has received through electoral bonds to the EC. All transactions will would be through banking instruments. “As against a total non-transparency in the present system of cash donations, where the donor, the donee, the quantum of donations and the nature of expenditure are all undisclosed, some element of transparency would be introduced in as much as all donors declare in their accounts the amount of bonds that they have purchased and all parties declare the quantum of bonds that they have received,” said Mr Jaitley. However, how much each donor has distributed to a political party would be known only to the donor. This, the finance minister said, is necessary as once this disclosure is made, past experience has shown donors would not find the scheme attractive and would go back to the less-desirable option of donating by cash.
“The choice has now to be consciously made between the existing system of substantial cash donations which involves total unclean money and is non-transparent, and the new scheme, which gives the option to donors to donate through entirely a transparent method of cheque, online transaction or through electoral bonds,” said Mr Jaitley
