One of the major takeaways of this year’s general budget, presented by Union Finance Minister Arun Jaitley, was the steps announced to initiate reforms in electoral funding.
While demonetisation broke the back of black money stashed in cash, it was equally important to make sure that no new black money was generated in future. Jaitley lamented that political parties continued to receive most funds through anonymous donations, which is one of the major contributors to the creation of black money.
Therefore, Jaitley declared that political parties wouldn’t be able to accept more than Rs 2,000 in donation in cash from one source. Political parties will be entitled to receive donations by cheque or digitally from their donors, he added.
He further announced that the government will amend the Reserve Bank of India Act to enable the issuance of electoral bonds for political funding.
How will the “electoral bonds” work?
The government will bring in a new scheme under which every political party will have one bank account attached to its name.
Any donor who wants to donate a certain sum to a political party of his choice can go to a registered entity (say, a state bank) and draw a bond of the amount he wants to donate.
This bond can then be given to the party. The party will then “encash” these bonds by depositing the bonds in the above mentioned registered bank account of the party.
This will not only eliminate the possibility of black money but also ensure anonymity of donations.
In another important step towards curbing the generation of new black money, Jaitley announced that the government has decided to act on the recommendation of the Special Investigation Team to outlaw cash transactions over Rs 3 lakh.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.