Presenting the Union Budget 2017, Finance Minister today announced a few steps to bring in transparency in political funding. The Finance Minister said political parties continue to receive most of their funds through anonymous donations. To fight against this anonymous donations, the Modi government has brought something that the opposition parties can’t resist ahead of the elections in 5 major states.
Finance Minister Arun Jaitley in his speech announced that he will reduce the tax rate of individuals earning between Rs 2.5 lakh to Rs 5 lakh to 5% from the current 10%. To part finance the additional burden on the government for this tax relief, FM Jaitley announced a surcharge of 10% for those earning between Rs 50 lakh and Rs 1 crore.
The steps announced by the Finance Minister are:
- Maximum amount that a political party can receive from a source in cash is Rs 2,000
- Political parties will be entitled to receive donations in cheque or digital payment
- Every political party has to file Income Tax returns
- An amendment to the RBI Act has been proposed which will enable issuance of electoral bonds
- Donor can purchase bonds from designated banks, and these bonds can be redeemed within a prescribed limit.
Arun Jaitley ‘s announcements on political funding were in line with Prime Minister Narendra Modi stand on the electoral reforms.