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Under the scheme, a donor can purchase electoral bonds from an authorised bank and deposit it into the registered accounts of a political party. A finance ministry spokesperson said the exact dates of when the bonds could be purchased would be announced by the government in due course.
But the move has already drawn much criticism, with many doubting that it will lead to cleaner politics in India, where allegations of vote buying are common during state and national elections. In India, political parties rarely disclose the source of their funding with most donations coming from anonymous sources, and no laws require parties to name their donors.
Many make cash donations instead. The new scheme can prevent a shift to cash donations, Mr Jaitley argued, as the identity of donors is not made public. Under the scheme, anyone buying a bond will have to give their details to the banks but the bonds would not bear the name of the donor.
In India, political parties, including the two main national ones — Congress and the ruling Bharatiya Janata Party BJP — collect funds to run the party and fight elections.
In a survey, a non-government organisation NGO found that 69 per cent of the total income of The electoral bond scheme is not the first attempt by the Indian government to make political funding more transparent. But current Prime Minister Narendra Modi, who came to power with anti corruption as a key plank of his campaign, has focused more on this issue.
Since taking office, he has taken several measures, including capping anonymous cash donations to political parties at 2, rupees.
Nobody will know the name of the buyer, which will not be on the instrument. Who the buyer gives it to will also not be known. When there is complete anonymity on both sides, how does one call it transparent?
Pai Panandiker, president of New Delhi-based think tank, RPG Foundation, said the electoral bond scheme is better than nothing but added that political parties needed to be audited for greater transparency.
It is not going to completely wipe off wrongdoing. But at least there is some attempt towards reducing corruption.
Another party, the Communist Party of India Marxisthas also raised concerns about the bonds. Its chief Sitaram Yechury has written a letter to Mr Jaitley to ask him to reconsider the scheme and to call for more discussions among political parties.
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