Additional measures likely to protect donor's anonymity

In 2008, Rs 2.5 crore cash had vanished from the BJP's office at 11, Ashoka Road

A government source said additional precautionary measures would be put in place to ensure anonymity of the donor. The bonds are also likely to reduce internal corruption within political parties, which get a lot of donations in cash and is usually collected by second- or third-rung leaders.

The finance ministry could suggest a 30-day window for political parties to redeem the proposed Reserve Bank of India (RBI) electoral bonds to prevent misuse.

Measures aimed at reducing black, or unaccounted, money in political funding were one of the highlight of Budget 2017-18 that Finance Minister Arun Jaitley presented on Wednesday. In his Budget speech, Jaitley had said the government would soon frame rules on electoral bonds. Ever since, leaders of political parties have been seeking details of the proposal. On Friday, Trinamool Congress Rajya Sabha member Derek O’Brien was one of those who wanted to know from the FM the modalities likely to govern electoral bonds. Congress Vice-President Rahul Gandhi had welcomed the move on Wednesday. According to sources, Congress treasurer Motilal Vora supported the government’s move on electoral bonds. Trinamool’s rival in Bengal, the Communist Party of India (Marxist), has criticised it for falling way short of any real reform. 

In his Budget speech, Jaitley had said: “These bonds will be redeemable within the prescribed time limit from issuance of bond. But he didn't specify the window. A top finance ministry source said on Friday the rules were likely to provide a window of 30 days or less for redeeming of the bonds. Such bonds were earlier known to have been misused. 

Under the new scheme to come into effect from April 1, 2018, a donor could purchase bonds from authorised banks against cheques or digital payments. These would be redeemed only in the designated account of a registered political party. For this, Section 13A of the Income Tax would be amended with effect from the “1st day of April, 2018”, the Finance Bill stated.

In 2008, Rs 2.5 crore cash had vanished from the Bharatiya Janata Party (BJP)’s office at 11, Ashoka Road. The party had then hired an investigator and the culprit was finally caught.

Nuts and bolts

Precautionary measures would be put in place to ensure anonymity of the donor

Likely to reduce internal corruption within political parties

A donor could purchase bonds from authorised banks against cheques or digital payments

These would be redeemed only in the designated account of a registered political party

For this, Section 13A of the Income Tax would be amended with effect from the “1st day of April, 2018”

The finance ministry could suggest a 30-day window for political parties to redeem