Anonymous Individuals Cash Donations Capped at Rs 2K, No Check On Cheque
Seeking to arrest the flow of unaccounted cash into the coffers of political parties, the Budget has proposed a Rs 2,000 cap on anonymous individual cash
donations and has introduced a new mechanism for making political contributions through bonds for those who want to remain incognito.
The Election Commission had sought to bring down the limit on anonymous cash contributions from Rs 20,000 to Rs 2,000 as parties were often accused of
"breaking up" donations to go below the sanctioned limit. This process will now become much more tedious and complicated if a party does look to fudging
its ledger.
There is, however, no such restriction on contributions to political parties by cheque or the digital mode. Going a step further, the government has also
facilitated contributions from donors reluctant to adopt transparent methods for fear of being identified. Such donors can now maintain anonymity by
purchasing bonds from banks against cheque and digital payments. These bonds shall be redeemable by political parties in their bank accounts within a
prescribed time limit.
"It is time we corrected the system of political funding in India. Our claim is that we are the largest as well as the most vibrant democracy. We cannot
have a political system which is funded by a shadow economy. It is part of the campaign the prime minister has launched for the cleansing of political
economy," FM Arun Jaitley said.
While enforcement of the Rs 2,000 cap will require an amendment to Section 29(C) of the Representation of the People Act, 1951, an amendment to the RBI
Act is proposed to allow issuance of electoral bonds. Jaitley said the bonds would be "bearer in character because if names are disclosed, identities
are revealed, then it is as good as paying money through a cheque, which is the present status quo". Every political party will have to file its return
within the time prescribed in accordance with provisions of the Income Tax Act.
The Election Commission on Wednesday refrained from reacting to the government's acceptance of its recommendation, which was forwarded in December 2016
as part of a compilation of proposed electoral reforms, in the interest of neutrality ahead of polls in five states.
In the 10 years between 2004-05 and 2014-15, political parties of all hues had a total income of over Rs 11,000 crore, of which Rs 7,800 crore was
collected from unknown sources, according to a report put out recently by the Association for Democratic Reforms.
02ND FEBRUARY, 2017, THE TIMES OF INDIA,NEW-DELHI
Seeking to arrest the flow of unaccounted cash into the coffers of political parties, the Budget has proposed a Rs 2,000 cap on anonymous individual cash
donations and has introduced a new mechanism for making political contributions through bonds for those who want to remain incognito.
The Election Commission had sought to bring down the limit on anonymous cash contributions from Rs 20,000 to Rs 2,000 as parties were often accused of
"breaking up" donations to go below the sanctioned limit. This process will now become much more tedious and complicated if a party does look to fudging
its ledger.
There is, however, no such restriction on contributions to political parties by cheque or the digital mode. Going a step further, the government has also
facilitated contributions from donors reluctant to adopt transparent methods for fear of being identified. Such donors can now maintain anonymity by
purchasing bonds from banks against cheque and digital payments. These bonds shall be redeemable by political parties in their bank accounts within a
prescribed time limit.
"It is time we corrected the system of political funding in India. Our claim is that we are the largest as well as the most vibrant democracy. We cannot
have a political system which is funded by a shadow economy. It is part of the campaign the prime minister has launched for the cleansing of political
economy," FM Arun Jaitley said.
While enforcement of the Rs 2,000 cap will require an amendment to Section 29(C) of the Representation of the People Act, 1951, an amendment to the RBI
Act is proposed to allow issuance of electoral bonds. Jaitley said the bonds would be "bearer in character because if names are disclosed, identities
are revealed, then it is as good as paying money through a cheque, which is the present status quo". Every political party will have to file its return
within the time prescribed in accordance with provisions of the Income Tax Act.
The Election Commission on Wednesday refrained from reacting to the government's acceptance of its recommendation, which was forwarded in December 2016
as part of a compilation of proposed electoral reforms, in the interest of neutrality ahead of polls in five states.
In the 10 years between 2004-05 and 2014-15, political parties of all hues had a total income of over Rs 11,000 crore, of which Rs 7,800 crore was
collected from unknown sources, according to a report put out recently by the Association for Democratic Reforms.
02ND FEBRUARY, 2017, THE TIMES OF INDIA,NEW-DELHI
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