Political parties to now receive maximum donation of Rs. 2,000 from one source

Union Finance Minister Arun Jaitley on Wednesday announced that the maximum cash donation any party can receive will be Rs. 2,000 from one source.

"The political parties continue to receive most funds through anonymous donations. The maximum cash donation any party can receive will be Rs. 2,000 from one source. The political parties will be entitled to receive donations by cheque or in the digital mode from their donors. An amendment is being proposed to RBI Act to enable the issuance of electoral bonds for political funding," Jaitley said while reading out the Union Budget for 2017-18 in Parliament.

According to a report issued by the Association for Democratic Reforms (ADR), 70 percent of party funding comes from 'unknown' sources.

The ADR issued the report earlier on January 24 analysing the data since 2004, which showed that political parties do not reveal majority of the sources of their funds.

Attributing most of their donations to unknown sources such as sale of coupons, Aajiwan Sahayog Niti, relief fund, voluntary contributions and miscellaneous income, several political parties declared these incomes to the Income Tax Department without revealing the source of donations under Rs. 20,000.

The ADR report comes weeks after a Supreme Court judgment had dismissed a PIL seeking that the source of all donations, irrespective of amount, be revealed by political parties.