New Delhi, Feb 1 (IANS) Political parties receiving donations above Rs 2,000 will now have to disclose the identity of the donor, Finance Minister Arun Jaitley said on Wednesday, announcing new rules for greater transparency in political funding in the country.
This is a sharp drop from the Rs 20,000 that the political parties were so far allowed to receive in anonymous cash donations.
Presenting the Union Budget for 2017-18, Jaitley said the government has accepted the Election Commission's recommendation to bring in transparency in political funding and political parties can take donations from donors through cheque and digital payments.
He said as an additional step, the government proposes to amend the Reserve Bank of India Act for issuing electoral bonds that can be bought through cheques and will be redeemable in the registered account of a political party.
"This reform will bring greater reform in political funding while preventing future generation of black money," Jaitley said.
"Even after 70 years of Independence, there is no transparency in political funding. Most donations are received in cash, and the donors too hesitate to disclose their identity," Jaitley said.
"Maximum amount of cash donation to any political party will be Rs 2,000 from any person," Jaitley said.
Till now, most political parties showed their donations received in cash in chunks of below Rs 20,000, as they were not bound to disclose the identity of donors giving up to Rs 20,000.
The EC had asked the government, among other things, to bring down this limit of anonymous donation to Rs 2,000.