Election bonds to end political funding

Cleansing political funding is a “big challenge” but the government is working on the electoral bonds mechanism announced in Budget to end corruption, Finance Minister Arun Jaitley said.

He said people used to say that if corruption is to be eradicated from the country, then the exercise should start from political parties.

“There is corruption in politics because of our electoral funding mechanism… There is no transparent mechanism for electoral funding…. Is a very big challenge in front of the country to cleanse the political funding,” Mr Jaitley said at an event in New Delhi.

He said the present NDA government has ended discretion in allocation of natural resources as Prime Minister Narendra Modi wanted every resource be allocated through transparent market mechanisms.

“In the coming days, we will come out with mechanism for electoral bonds which will ensure only tax-paid money comes into the political system. We have moved much ahead in this,” Mr Jaitley said.

In a major move aimed at promoting transparency in political funding, Finance Minister Jaitley had in this year’s Budget speech announced capping of anonymous cash donations to political parties at Rs. 2,000 and introduced electoral bonds.

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.

The bonds will not carry the name of the donor.