Expressing concern over funds being received by political parties through anonymous donations shown in cash, the Finance Minister said that the measures taken in the past to check such donations has only marginally improved the situation.
A transparent method of funding political parties which is vital to the system of free and fair elections needs to be evolved. Arun Jaitley proposed the following schemes to cleanse the system of funding of political parties:
a) The maximum amount of cash donation that a political party can receive will be Rs 2000 from one person.
b) Political parties will be entitled to receive donations by cheque or digital mode from their donors.
c) Reserve Bank of India Act will be amended to enable the issuance of electoral bonds in accordance with a scheme to be framed by the Government in this regard. Under this Scheme, a donor could purchase bonds from authorized Banks against cheque and digital payments only. They shall be redeemable only in the designated account of a registered political party. These bonds will be redeemable within the prescribed time limit from issuance of bond.
d) Every political party would have to file its return within the time prescribed in accordance with the provisions of Income Tax Act.