The central government’s demonetisation move banning Rs 500 and Rs 1000 notes has invited praise and brickbats in equal measure. One of the sticking points that the critics of demonetisation used to target the PM’s policy was that the same parameters used to crackdown on tax evaders weren’t being used for funding of political parties. The biggest loophole in the electoral funding procedure is that parties are not obliged to reveal the donations up to Rs 20,000 which helped black money to seep into political funding anonymously.
However, the government seems to have taken the criticism seriously and decided to crack down on unaccounted electoral corporate funds. His big announcement is that political parties cannot accept more than Rs 2000 as a cash donation. The next part of the announcement, however, is more tricky. He said donations can be accepted in the form of electoral bonds.
One would wonder why didn’t he simply restrict the change to digital transactions or a simple cheque payment. After all, why would anyone who wants to give money to a political party from his hard earned money not like to reveal his name? We are still to fathom the importance of this step in cleaning up the electoral system as most people are grappling to understand what is electoral reform. As we understand, to enable this process of donations through electoral bonds, the RBI Act has to be amended.
The announcement attracted both applause and curiosity on Twitter:
#MintBudget #ElectoralBond will record political donations. @RBI will float. Fine. Curious to know who will pay interest on such bonds?
— Tamal Bandyopadhya (@TamalBandyo) February 1, 2017
Limiting cash to Rs 2k for political parties is revolutionary reform, as are election bonds. Can greatly clean up politics #Budget2017
— Shekhar Gupta (@ShekharGupta) February 1, 2017
#Budget2017 Electoral funding reform thru Electoral Bond issue as bearer bond is a welcome announcement. Long awaited.
— Shankar Subramanian (@shankysubs) February 1, 2017
There were some funny comments also that reflected the cluelessness regarding the issue:
This ‘electoral bond’ thing looks interesting. Wish experts decide and analyse it asap
— Kanchan Srivastava (@Ms_Aflatoon) February 1, 2017
There is a new #Bond in the market: My name is Electoral Bond@arunjaitley #MintBudget #Budget2017
— Anil Padmanabhan (@capitalcalculus) February 1, 2017
Proposal to introduce a Romance bond (like Electoral Bond). There’s a cap on gifting during Valentine’s Day or other similar occasions.