To curb misuse, political parties to redeem electoral bonds in 30 days max

Officials welcomed the measure saying that it has laid the foundation for more electoral reforms

In order to prevent misuse, the Finance Ministry could suggest a 30-day window within which political parties would need to redeem the soon-to-be-introduced Reserve Bank of India (RBI) electoral bonds. Measures aimed at reducing the incidence of black, or unaccounted, money in political funding were among the major highlights of the Budget presented by Finance Minister Arun Jaitley on Wednesday.

In his Budget speech, Jaitley had said that the government would soon frame rules on electoral bonds. Ever since, leaders of other political parties have enquired about the details of the proposal. On Saturday, Trinamool Congress MP Derek O'Brien was among those who wanted to know more about the modalities likely to govern electoral bonds. 

While Congress Vice President Rahul Gandhi had welcomed the move on Wednesday, Trinamool's rival in Bengal -- the Communist Party of India (Marxist) -- has criticised it for falling way short of any real reform and has called it a 'gimmick'. According to sources, Congress treasurer Motilal Vora has supported the government's move on electoral bonds.

In his Budget speech, Jaitley had said: "These bonds will be redeemable within the prescribed time limit from issuance of bond." But he did not specify a window. On Saturday, a top Finance Ministry source said the rules are likely to provide a window of 30-days or less for redeeming the bonds. Such bonds have earlier known to have been misused.

Under the new scheme that will come into effect from the month of April in 2018, a donor could purchase the bonds from authorised banks against cheque or digital payments. They shall be redeemable only in the designated account of a registered political party. For this, section 13A of the Income Tax Act will be amended with effect from the "1st day of April, 2018", the Finance Bill states.

Additional precautionary measures will be put in place to ensure anonymity of the donor, and that the information isn't leaked in the public domain, added the source.

  

However, election watchdog Association for Democratic Reforms (ADR) has criticised the anonymity clause. According to ADR, sharing details of the donors and recipient would check any quid pro quo existing between the involved parties after the elections, especially in cases when the party comes to power.

The measure is also likely to reduce corruption within political parties that operate through donations in cash. While political donations are struck at a senior level, the cash is usually collected by second or third-rung leaders. Back in 2008, over Rs 2.5 crore went missing from the Bharatiya Janata Party's (BJP's) office at 11, Ashoka Road. The party had then hired an investigator and the culprit was finally caught.

Activists criticising the move have a penchant for coming up with "problems for every solution", said a government source. Meanwhile, other officials welcomed the government measure saying that it has laid the foundation for more electoral reforms.