Salient points of Press Conference of Senior BJP Leader & Union Minister Shri Piyush Goyal

 

 

Salient points of Press Conference of Senior BJP Leader & Union Minister Shri Piyush Goyal

 

Electoral bonds have brought transparency and accountability to the system.

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This opposition is the handiwork of the alliance of the defeated and the dejected.

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Electoral Bonds is in the same trajectory of electoral reforms to bring transparency and remove black money from the system.

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Electoral bonds have a KYC mechanism while the old system had no way to assess donor credentials.

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However, now people who want to be a part of the political process but are scared of political retribution will be able to contribute.

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Shri Piyush Goyal addressed the media on the issue of Electoral Bonds. He mentioned that for the first time in the country, a Government has taken a decisive step which promotes electoral funding. However, today it is being criticised by the people who flourished under an opaque, unaccountable system where black money ruled. Notably those political parties that are opposed to electoral bonds are happily accepting donations through them. This opposition is the handiwork of the alliance of the defeated and dejected.

 

He spoke about how electoral bonds have brought transparency and accountability to the system. It is unique that those who are themselves immersed in corruption are opposing it the most. There have been cases earlier of Prime Ministers allegedly accepting suitcases of cash, of various scams including Bofors, Jeep, 2G, Coalgate etc. In all of these it is the Congress party which has been involved. It is natural that they will oppose a system which is cleaning the electoral process from the curse of black money.

 

Shri Goyal spoke about how even Late Atal Bihari Vajpayee ji had amended IT Act and donations were treated as expenditure. This had encouraged white money in the economy and political system. In line with the same,  the Government under the able leadership of Prime Minister Shri Narendra Modi has reduced cash donation limit to Rs 2,000 in Budget 2017-18 from the earlier limit of Rs 20,000. Electoral Bonds is in the same trajectory of electoral reforms to bring transparency and remove black money from the system.

 

Shri Goyal mentioned how electoral bonds have a KYC mechanism while the old system had no way to assess donor credentials. Since there is no name attached with an electoral bond, there is no fear of harassment. Electoral bonds are also issued to a particular party, redeemable in a particular bank account, non-transferable and valid for only 15 days - so they cannot be used as crypto currency.

 

A serial number is put on the bond through an invisible ink so that there is no harassment to donors. This invisible number ensures that  there will be an audit trail available for internal control & reconciliation. These bonds can be encashed in only a single place. This has been effective in dealing with shell companies.

 

Shri Goyal recounted the consultations between Reserve Bank of India and Election Commission of India. He said between the passing of the Finance Bill on 31st March, 2017 and Notification of the Electoral Bond Scheme on 2nd January, 2018, there were multiple interactions between the RBI and the government.  To ensure there is no misuse of Electoral Bonds, the encashment can be done by only qualified registered parties and within 15 days.

 

Shri Goyal also enumerated the several advantages of Electoral Bond Scheme. The earlier system led to creation of black money and promoted cash in the system as donors were reluctant to declare their political contributions due to fear of political retribution. However, in the new system, the donor has to donate using banking cashless channel and the political party also receives the money in a bank account. The data of the donor and the political party is easily accessible to the Authorities including Income Tax officials.

 

Shri Goyal mentioned that Electoral Bond provides for a complete white money donation. The bond is a banking instrument of State Bank of India, a Political Party had to deposit it in a single declared Bank account. Donor has to donate through Cheque, DD, NEFT/ RTGS or Direct Debit to the Applicant Account. Therefore, cash has been removed from the process of donation. However, now people who want to be a part of the political process but are scared of political retribution will be able to contribute.

 

 

COMPARISON

 

S.	New System		Old system
	Inbuilt KYC requirement for donors.		Anonymous/ pseudonymous donors
	KYC compliance ensures clean tax-paid money.		Unclean money from unidentifiable sources
	EBs cannot be used as collateral
	Donors to donate only through a transparent mechanism using cheque, and online transactions. (contributions only below ₹2000 can be made through cash)		Non-transparent system
	No name of donee and donor. Hence, no fear of harassment.		Reluctance of donors to pay by cheque because of identity becoming known and fear of harassment
	This is the first step in substantially cleaning up the electoral funding process. An amount of ₹6,129 cr in 12 tranches has been received by different political parties.		Only marginal improvements in political funding were effected through earlier reform measures allowing tax exemptions to political parties disclosing donations in a prescribed manner. The mechanism of “pass-through” electoral trusts introduced by UPA government also had limited success.
7.	Issued to a particular registered political party, redeemable in a designated bank account of that party. EBs are non-transferable instruments, valid for only 15 days. Hence, cannot equivalent to cash.They can be purchased only from a specified bank using a banking instrument.		Based on cash donations
8.	Accounting entries in the books of political parties for EBs received by them ensuring audit trail.		No audit trail

 

Mahendra Pandey

(Office Secretary)