Seeking to arrest flow of unaccounted cash into the coffers of political parties, the just introduced ‘Electoral Bonds’ will be bearer bonds and have a tenure of few days, Union Finance Minister Arun Jaitley said on Friday.
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.
Speaking at a post-Budget session with industry chambers, he said the bearer bonds can be purchased by corporate donors and donated to political parties without revealing their identity.
“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.
Jaitley, who had capped anonymous cash donations to political parties at Rs 2,000, 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,” he said.
He said some of the political donations has stopped coming by cash, but that is only a small percentage.
“The bulk of it still never came by a cheque. And therefore our consultations with a very large body of people reveal that for good reasons the donors wanted to donate tax paid clean money for political system. Political parties are part of democracy,” he said.
So a system was 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. That’s what happening in other parts of the world, that is what needs to be encouraged,” he said.
The Election Commission, Jaitley said, had suggested reduction in cash donations from one source to Rs 2,000 from Rs 20,000. “We accepted that suggestion. If the Election Commission has any other suggestion we are ready to consider it.”
“The whole concept of Electoral Bond is it can be purchased from a notified bank under the scheme and the banks would sell this bond against cheque or digital payments only. So it will be tax paid clean money on which these bonds will be purchased,” he said.
On the question of disclosing identify of the donor, he said the tragedy of the country is that there were large number of so called well read people who have problems of every solution.
“And therefore disclosure would again mean going back to the status quo and that status quo hasn’t worked,” he said.
“Therefore this new scheme is being experimented and I hope we will improve upon the scheme but I don’t think going back to the existing status quo which has not worked is an answer,” he said, adding the important step taken the Budget deserves to be tried.
“I don’t have the least doubt that if one or two elections are contested on this particular pattern we will see a significant amount of clean money getting into India’s democratic (system),” he added.
Meanwhile, criticising the Centre’s move to introduce electoral bonds, West Bengal Chief Minister Mamata Banerjee on Friday said that a decision on political funding should have be taken after obtaining opinions of all political parties.
“There should have been discussion with all political parties on the issue of political funding, electoral bonds. They should have taken opinion of all political outfits. Are they planning to send regional parties in exile,” Banerjee told reporters.
“We have long been demanding electoral reforms and state funding of elections,” the Trinamool Congress chief said.
Banerjee also questioned the motive behind bringing these proposals ahead of the assembly elections in five states.
“What is the motive behind this announcement just ahead of Assembly elections in five states? Later on we might find some thing much bigger motive behind this decision,” she said.
Banerjee claimed that UP Chief Minister Akhilesh Yadav had asked her to field TMC candidates in Uttar Pradesh assembly elections, saying she ‘decided not to contest there’.
“If we had money we could have contested and won a few seats in Punjab assembly,” she said.
She also slammed the central government for ‘pursuing political vendetta against the TMC for opposing the demonetisation’.
“We don’t believe in insulting masses. We don’t believe in political vendetta. No one should consider our political courtesy as our weakness,” she added.
The TMC has been at the loggerheads with the Modi government over the issue of demonetisation and the arrest of its two MPs by the Central Bureau of Investigation in connection with an alleged chit-fund scam.
Banerjee also said that the TMC would hit the streets demanding that the CBI and the ED return the money that Rose Valley and Saradha Chit Fund scam has looted from the masses.
“We will hit the streets demanding that the CBI and the ED return the money that Rose Valley and Saradha Chit Fund scam has looted from the masses. They have seized the assets of these chit fund companies, then why are they not returning the money,” she said.
Photograph: Vijay Kumar Joshi/PTI Photo
