Govt open to suggestions on electoral bonds: Arun Jaitley
Jaitley tabled the new Electoral Bond Scheme, which was first announced in Budget 2017-18, in Parliament last week
Backing the electoral bond scheme, Union Finance Minister Arun Jaitley today said that it will make the system of political funding transparent. Jaitly said the government is open to suggestions to further cleanse political funding.
In a Facebook post, Jaitley said despite strengthening various institutions for the last seven decades, India has not been able to evolve a transparent political funding system.
Jaitley had tabled the new Electoral Bond Scheme, which was first announced in Budget 2017-18, in Parliament last week.
"Elections and political parties are a fundamental feature of Parliamentary democracy. Elections cost money. Round the year functioning of political parties involves a large expenditure. Parties run offices throughout the country. Staff salaries, travelling expenses, establishment cost are regular expenditures of political parties. These expenditures run into hundreds of crores. Yet there has not been a transparent funding mechanism of the political system," he said.
The present system ensures unclean money coming from unidentifiable sources and the effort, therefore, is to run down any alternative system which is devised to cleanse up the political funding mechanism, he said.
"A major step was taken during the first National Democratic Alliance (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 the Election Commission. It was hoped that donors would increasingly start donating money by cheque. Some donors did start following this practise but most of them were reluctant to disclose the details of the quantum of donation given to a political party."
He said the existing system would be substantially widened and donations of clean money could be made to political parties in several ways.
"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. However, the electoral bond scheme, which I placed before the Parliament a few days ago, envisages total clean money and substantial transparency coming into the system of political funding."
Under the scheme, a donor can purchase electoral bonds from a specified bank. The donor have to disclose in his accounts the amount of political bonds that 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. Every political party have to disclose the amount of donations it has received through electoral bonds to the Election Commission.
The entire transactions would be through banking instruments, Jaitley said.
The government is willing to consider all suggestions to further strengthen the cleansing of political funding in India, the finance minister said.