Keeping in line with Prime Minister Narendra Modi’s previous appeals to bring transparency to political funding, Union Finance Minister Arun Jaitley today made some significant announcements during his fourth Budget speech. Until now, political parties have to maintain a list of donors contributing more than Rs 20,000 in their funds in cash or cheque.
Even as both the donor and the donee are granted exemption from payment of tax, if the accounts are transparently maintained and returns are filed with competent authorities, political parties continue to get a huge amount of donations in cash from anonymous sources. In December last year, the Election Commission had asked the government to reduced the Rs 20,000 cap to Rs 2000.
In his Budget speech, Jaitley announced four measures to make the political funding transparent.
a) The maximum amount of cash donation a political party can receive will be Rs 2000 from one person.
b) Political parties can receive donations by cheque or digital mode from their donors.
c) The government is preparing a scheme to issue electoral bonds. Under this scheme, a donor could purchase bonds from authorised banks against cheque and digital payments only. The government will also propose an amendment in the Reserve Bank of India Act to enable the issuance of electoral bonds as per the scheme. The bonds would be redeemable only by designated accounts of registered political parties, within the prescribed time limit from the issuance of the bond.
d) Every political party would have to file its return within the time prescribed in accordance with the provision of the Income-tax Act.
The idea of issuing electoral bonds and restriction on anonymous donations sounds nice, for a change. But considering the level of corruption and the expertise of our politicians in this regard, Jaitley’s budget proposal can at best be hailed as a small step for cleansing the electoral system of the country. The result, however, would not be as what is desired, though many would say that Jaitley has announced a revolutionary decision.
If parties can play with the Rs 20,000 limit on anonymous funding, they can do so with Rs 2000 as well. Reason: laws can’t end corruption. Only characters can.
India needs political parties to show some courage and conviction to declare all their sources of funding, and where they spend their wealth if they truly wish to set an honest political system for the welfare of the people. PM Modi or Jaitley can start this from their own party. Will they?