Is the propsition of electoral bonding proposed by Jaitley in Budget 2017 a phony? In the name of transparent funding, are the citizens being fooled again?


Rueing the fact  that ‘even  70 years after independence, the country has not been able to adopt a transparent method of funding political parties’ – ‘vital for free and fair elections’ –  the learned Finance Minister proposed the following scheme in his budget speech.

(a) ‘In accordance with the suggestion made by the Election Commission, the maximum amount of cash donation that a political party can receive will be Rs. 2000/- from one person’.

(b) ‘As an additional step, an amendment is being proposed to the Reserve Bank of India Act to enable the issuance of electoral bonds in accordance  with a scheme that the Government of India would frame in this regard.  Under this scheme, a donor could purchase bonds from authorized banks against cheque and digital payments only. They shall be redeemable only in the designated account of registered political party.’


The one and the only specious argument put forward by the hon’ble FM in favour of this absurd cash limit for political donations, is that it was suggested by the Election Commission!!! It is as if the government would have altogether banned cash donations, only if the Election Commission had not suggested cash limit of Rs.2000/- for donations to political parties. So, they roped in the Election Commission also to coin an alibi to continue their  nefarious activities!!! It is sophistry at its best, if nothing else.


Recently, a study conducted by the Association for Democratic Reforms revealed that  between 2004-05 and 2014-15 the major political parties collected total donations of Rs. 11,367.34 crore, out of which 69 per cent  i.e. Rs. 7,833 crore was in cash collected from unknown sources. The BJP alone collected Rs. 2,125.91 crore from unknown sources during this period.

In this scenario, if the limit of cash donations is lowered to Rs. 2000/-, all they would need to do is to show ten bogus entries of Rs. 2000/- each, instead of a single bogus entry of Rs. 20,000/- in their account books.  The ground reality will remain unchanged. The suggestion made by the Election Commission was not a gospel truth. The government could have easily opted for total ban on cash donations for funding political parties. But then, nobody in his senses commits hara-kiri!!!!



Electoral bonds, proposed as a way of reforming election funding, are to be issued by a notified bank for specified denominations. The prospective donors to a registered political party can buy these bonds by making payments digitally or through cheques. The political party can encash these bonds by depositing them in their bank account notified to the Election Commission. The entire process is to be so structured that the the identity of the donor will not be known to the recipient political party.

electoral bonding working mechanism BUDGET ALALYSIS (PART II)

The budget speech of the Finance Minister makes it clear  that the agenda of the government is to ‘clean the country from the evils of corruption, black money and non-transparent political funding.’On the one hand, he says ‘massive war against black money has been launched’, but on the other, he wants to destroy the money trail of the political funding.  Is this his way of fighting crony capitalists? How are you going to catch these faceless potential criminals once the money trail is destroyed?  He argues that ‘donors have also expressed reluctance in donating by cheque or other transparent methods as it would disclose their identity and entail adverse consequences.’  The potential Mallyas are fearful. This explains the motive behind destroying the money trail.


(1) Budget 2017-18 speech of Finance Minister, Para – 164

(2) Budget 2017-18 speech of Finance Minister, Para – 165

(3) Analysis of Sources of Funding of National and Regional Parties- FY 2004-05 to 2014-15

(4) Budget 2017-18 speech of Finance Minister, Para – 19

(5) Budget 2017-18 speech of Finance Minister, Para – 3

(6) Budget 2017-18 speech of Finance Minister, Para – 2

(7) Budget 2017-18 speech of Finance Minister, Para – 165

By Vimlesh Kumar

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