Electoral bonds will have to be redeemed within days: Jaitley

Seeking to arrest flow of unaccounted cash into the coffers of political parties, the just introduced 'Electoral Bonds' will be bearer bonds and have a tenure of few days, Finance Minister Arun Jaitley said today.
The Bonds, which will resemble a promissory note and not an interest-paying debt instrument, will be sold by authorised banks and can be deposited in notified accounts of political parties within the duration of their validity.
Speaking at a post-Budget session with industry chambers, he said the bearer bonds can be purchased by corporate donors and donated to political parties without revealing their identity.
"Every political party has to notify one bank account (where the bonds can be deposited). Within a very short period of time, which will be notified in the scheme, it will be days not months these will be redeemable only in that account of the political party," he said.

Jaitley, who had capped anonymous cash donations to political parties at Rs 2,000, said bonds can be purchased using cheque or e-payments only. "So in the hands of the recipient it is clean money, in the hands of donor it will be tax paid money."
He said some of the political donations has stopped coming by cash, but that is only a small percentage.

"The bulk of it still never came by a cheque. And therefore our consultations with a very large body of people reveal that for good reasons the donors wanted to donate tax paid clean money for political system. Political parties are part of democracy," he said.

So a system was devised where the there will confidentiality of the donor will be maintained but the money becomes "absolutely clean."
Election Commission, Jaitley said, had suggested
reduction in cash donations from one source to Rs 2,000 from Rs 20,000. "We accepted that suggestion. If the Election Commission has any other suggestion we are ready to consider it."
"The whole concept of Electoral Bond is it can be purchased from a notified bank under the scheme and the banks would sell this bonds against cheque or digital payments only. So it will be tax paid clean money on which these bonds will be purchased," he said.

On the question of disclosing identify of the donor, he said the tragedy of the country is that there were large number of so called well read people who have problems of every solution. "And therefore disclosure would again mean going back to the status quo and that status quo hasn't worked."
"Therefore this new scheme is being experimented and I hope we will improve upon the scheme but I don't think going back to the existing status quo which has not worked is an answer," he said, adding the important step taken the Budget deserves to be tried.
"I don't have the least doubt that if one or two elections are contested on this particular pattern we will see a significant amount of clean money getting into India's democratic (system)," he added.