Funding of elections has always been mired with controversies and the role of black money remained shrouded as there was no mechanism to trace the trail of the funds flowing to support any political party. The Union Government’s move on Tuesday no doubt is a landmark one in the electoral history of the country to give a clean election financing. The contours of the scheme make it more transparent as the new electoral bonds that donors can buy from SBI which political parties can encash only through a designated bank account thus tracing the track of fund flow. The electoral bonds, which are being pitched as an alternative to cash donations made to political parties, will be available at specified branches of State Bank of India (SBI) for 10 days each in months of January, April, July and October. The bonds, which would be valid for 15 days, will not carry the donor’s name even though the purchaser would have to fulfil (Know Your Customer) KYC norms at the bank, Finance Minister Arun Jaitley said in the Lok Sabha while announcing the contours of the scheme on Tuesday. He had first announced the idea of electoral bonds in his Budget 2017-18 speech made on February 1, 2017, to make political funding more transparent. Although called a bond, the banking instruments resembling promissory note will not carry any interest. The lender will remain the custodian of the donor’s funds until the political parties are paid. The move is aimed at making political funding more transparent. Currently, almost all of the funding is done by anonymous cash donations. This step follows the audacious move to ban high currency notes in November 2016 in a bid to flush the system of black money. Electoral bonds will allow donors to pay political parties using banks as an intermediary. There was great need for making political funding process to be cleansed up so that the whole process becomes transparent and accountable as at present donor, quantum and source of funds is not known. Electoral bonds will ensure clean money and significant transparency against the current system of unclean money but there is a catch i.e. donor’s name has been kept secret. Will it help in maintaining the transparency the government is looking at in the election funding?
