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LATEST NEWS UPDATES | Poll bond transparency test: Govt finalises terms for donation process

Poll bond transparency test: Govt finalises terms for donation process

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published Published on Jan 3, 2018   modified Modified on Jan 3, 2018
-The Telegraph

New Delhi: A company that has been in operation for less than three years will be able to donate money to a political party through electoral bonds, according to the terms finalised by the Centre on Tuesday.

But a party that could not secure 1 per cent of the vote in the previous election will not be eligible for the electoral bonds. This could pose a funding challenge for new political parties, especially the one that superstar Rajinikanth intends to float soon.

The Narendra Modi government hopes the electoral bonds will inject an element of transparency into election financing of political parties that have been dependent until now on dark pools of cash from unnamed sources.

The electoral bond will be an interest-free banking instrument, much like a promissory note, that every eligible political party will be able to encash through a designated bank account, finance minister Arun Jaitley told the Lok Sabha. "These 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," Jaitley said.

The purchaser will be allowed to buy the electoral bonds only after he complies with the existing Know Your Customer (KYC) norms and makes payments from a bank account.

But it will not carry the name of the payee (the recipient of the donation). The corporate donor is under no obligation to disclose the name of the party to which the donation has been made.

Analysts have raised concerns. "Now a private corporation can make donations without starting commercial operations, let alone earning profits. There will be no obligation to publicly disclose the amount so donated and the identity of the recipient political party. Only the total sum of money so donated will be reflected in the profit and loss account of the company every year," an analyst said.

One analyst felt that the cloak of anonymity thrown over donors raises the prospect of perpetuating a system of crony capitalism that could boost the poll prospects of the party that happens to be in power when the donation is made.

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The Telegraph, 3 January, 2018, https://www.telegraphindia.com/india/poll-bond-transparency-test-198285


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