itle: The Minister of Finance and Ministry of Corporate Affairs made a statement on

introduction of the Scheme of Electoral Bonds.

THE MINISTER OF FINANCE AND MINISTER OF CORPORATE AFFAIRS (SHRI
ARUN JAITLEY): Sir, I had announced in the Budget Speech of 2017-18 to bring in a
scheme of Electoral Bonds to clean the system of political funding in the country.
The Government has now finalised the Scheme of Electoral Bonds. The Scheme
will be notified today.
The broad contours of the Scheme are:
 The electoral bond would be a bearer instrument in the nature of a Promissory Note
and an interest-free banking instrument. A citizen of India or a body incorporated
in India will be eligible to purchase the bond.
 The electoral bond would be issued/purchased for any value in multiples of Rs.
1,000, Rs. 10,000, Rs. 1,00,000, Rs. 10,00,000 and Rs. 1,00,00,000 from the
specified branches of the State Bank of India.
 The purchaser would be allowed to buy electoral bond(s) only on due fulfilment of
all the extant KYC norms and by making payment from a bank account. It will not
carry the name of the payee.
 Electoral Bonds would have a life of only 15 days during which it can be used for
making donations only to the political parties registered under section 29A of the
Representation of Peoples Act, 1951 (43 of 1951) and which secured not less than
one per cent of the votes polled in the last general election to the House of the
People or a Legislative Assembly.
 The bonds under the Scheme shall be available for purchase for a period of ten days
each in the months of January, April, July and October, as may be specified by the
Central Government. An additional period of 30 days shall be specified by the
Central Government in the year of the general election to the House of People.
 The bond shall be encashed by an eligible political party only through a designated
bank account with the authorised bank.
… (Interruptions)
HON. DEPUTY SPEAKER: Shri Shrirang Appa Barne.
… (Interruptions)
HON. DEPUTY SPEAKER: I have already called the next speaker.
… (Interruptions)
SHRI MALIKARJUN KHARGE (GULBARGA): Sir, I have one clarification.…
(Interruptions) This is a very dangerous thing. You will have to give me one minute.…
(Interruptions)
HON. DEPUTY SPEAKER: What clarification you would like to have?
SHRI MALIKARJUN KHARGE: The hon. Minister has stated that the names of the
political parties cannot be disclosed. What is the purpose of not disclosing the names?
As of today, when the political parties file return to the Election Commission, they have
to give all the details like how and from where the donation has come. What is the
purpose of this donation when you are not going to disclose it? What is the benefit of
this?
SHRI ARUN JAITLEY: Let me clear the misconception, if there is any, because we have
gone through this debate at the time of the Finance Bill itself. This announcement was a
part of the General Budget itself. I had announced in the Budget speech itself that
political funding in India needs to be cleaned up. Today, the system is, and this is no
secret to any political party or to the world outside, that donations coming to political
parties are coming otherwise than through banking instruments. The names of the
donors, quantum and the source of the money are not known.
Electoral bonds substantially seek to cleanse that system. Any person seeking to
donate money to a political party during that specified period can buy electoral bonds
from the specified branch of the State Bank of India. Those bonds can be given only to a
registered political party and only such parties, so that fake parties are not registered,
which secured at least one per cent vote in the last election. Those parties will have to
announce one designated account, that is the Congress or the BJP or the BJD will have
one account given to the Election Commission in advance. These bonds can be encashed
within 15 days of purchase by the donor to the political party.
Now, the element of transparency is that the donors buy these bonds. Obviously,
their balance sheets will reflect that they have bought a certain amount of bonds.
Political parties will file their returns and collectively also say that this is the extent of
electoral bonds that they have received. And, therefore, this will be the cleaner money
coming from the donor, cleaner money coming into the hands of a political party who
would have cleansed substantially the whole process.
There would be a significant amount of transparency. Today, there is nil
transparency. When the cash is given, the source of the money, the donor and where it is
spent is not known. Therefore, at least now it will be known. The donor will be having
an account of how many bonds he has purchased. The political party will be filing
returns to the Election Commission, thereby indicating the total bonds it has received and
which donor gave to which political party.
It is in order to ensure that the transformation into clean money takes place
smoothly and people are incentivised to give that. That is the only factor which will not
be known. So, there will be clean money, and a substantial, significant amount of
transparency as against the present system of unclean money and no transparency. …
(Interruptions)