Answer:

In Budget 2017, the government announced some steps to regulate electoral funding in order to:

♤ minimize the use of cash, which is mostly ill-gotten and unaccounted; and

♤ maintain anonymity of the donor to minimize favoritism when one party comes to power.

Following can be highlighted in this context:

♤ Ceiling of Rs 2000 on cash donation that a political party can receive from one person in a year. However, there is no requirement to disclose a contribution by cheque or digital transfer up to Rs 20,000. Also, there is no limit on how much anonymous (from all means) or total cash can a party receive from all sources together.

♤ A new scheme of Electoral Bonds which can be purchased from authorised banks and redeemable only in the designated account of a registered party within a short time (3-4 weeks). It is aimed at reducing cash payments which were abused earlier. However, identity of the donor being secret and without the cap of 7.5% of average 3 year profit that a company can donate to political parties, there is large scope of misuse.

♤ Exemption from payment of income tax has been made subject to timely filing of IT returns by political parties. However, such a provision already exists though routinely flouted