New Delhi: Finance Minister Arun Jaitley on Wednesday dealt a big blow to the system of dubious political funding by announcing that a party cannot receive more that Rs 2,000 from one source in cash. Loud murmurs echoed in the Lower House of Parliament as he made the announcement.
Jaitley said that political parties continue to receive most of their funding through anonymous donations, which are shown in cash. He said his government was striving to bring in more transparency in the political funding system.
“An effort needs to be made to cleanse the system of political funding in India,” Jaitley said in the Budget Session and made the following proposals:
- In accordance with the suggestion made by the Election Commission, the maximum amount of cash donation that a political party can receive will be Rs 2000 from any one source.
- Political parties will be entitled to receive donations through cheques or by the digital mode from their donors.
- An additional step, an amendment is being proposed to the Reserve Bank of India Act, to enable the issuance of electoral bonds in accordance with the scheme that the government of India would frame in this regard – under this scheme, a donor could purchase bonds from authorised banks against cheques and digital payment only. These would be redeemable only in the designated account of a registered political party. These bonds will be redeemable within a prescribed time from the issuance of the bond.
- Every political party will have to file its returns within the time prescribed, in accordance with the provisions of the Income Tax act. Needless to say, the existing amendments to political parties from payment of income tax would be available only subject to the fulfilment of the above conditions.
"This reform will bring greater transparency and accountability in the political funding while preventing future generations of black money," Jaitley concluded....