Arun Jaitley defends electoral bonds as white money with better transparency

Finance Minister Arun Jaitley defended electoral bonds on Sunday, saying in a blog post that they were meant to curb the use of black money in election funding, the same goal that electoral trusts proposed under the UPA-II government had sought to achieve.

Jaitley’s argument

Jaitley said reports indicated that about Rs 1,500 crore had been seized in action by the Election Commission and the revenue authorities. He argued that critics were targeting the bonds rather than the electoral trusts only because the bonds came from the NDA and the trusts from the UPA, though the principle behind both was the same.

Without the bonds, he said, donors would have no choice but to give cash siphoned out of their businesses. He claimed recent raids had shown taxpayers’ money being routed through public works and other government departments back into politics, and asked whether that was better than a system of white money with improved, if imperfect, transparency. He urged NGOs and analysts to look beyond their noses.

Jaitley said the trusts proposed by then finance minister Pranab Mukherjee in 2010 and the bonds both ensured clean money and better transparency while shielding the link between donor and party, to encourage donors to give without fear. He said enforcement action had been especially significant in Karnataka, Tamil Nadu, Andhra Pradesh, the North-East and Madhya Pradesh, and that in many cases money had come from government contractors and beneficiaries. In one state, he said, contractors passed money to engineers for distribution to candidates; in another, which had elected a new government four months earlier, 50,000 government transfers had become a way of raising money.

Recent searches

On Sunday the Income Tax Department searched at least 50 places in Delhi and Madhya Pradesh linked to people close to Chief Minister Kamal Nath, officials said, over suspected hawala transactions and tax evasion. The previous month, premises of associates of a JD(S) minister in Karnataka were searched, which the state government called politically motivated. Searches were also carried out at premises of senior DMK leader Duraimurugan in Vellore, where Rs 10 lakh in allegedly excess cash was seized.

About electoral bonds

The government introduced the electoral bond scheme in 2018 as an alternative to cash donations to political parties. Under the scheme, only banks know the donor’s name.

What happened next

In the 2019 Lok Sabha election, counted on 23 May 2019, the BJP won 303 seats. Kamal Nath had become Madhya Pradesh Chief Minister after the 2018 Assembly election, in which the Congress won 114 seats.

Originally published on 8 April 2019. Rewritten on 9 October 2026.

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