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Updated November 29th, 2019 at 19:22 IST

Electoral bonds are not a scam: Ex-finance secretary Subhash Chandra Garg

Subhash Chandra Garg while talking to news agency ANI defended the electoral bonds scheme and said that it is 70-90% cleansing of the political donation system.

Reported by: Rishabh Mishra
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The former Finance Secretary of state, Subhash Chandra Garg while talking to news agency ANI defended the electoral bonds scheme and said that it is 70 to 90% cleansing of the political donation system. Garg also added that this is a very good scheme and not a scam because it has replaced cash contribution to political parties. Subhash Chandra Garg had recently retired from the position of Secretary at the Ministry of Power on October 31.  

Gard asserted that the system of electoral bonds was meant to eliminate large cash donations. He stated that a scam could be possible if a political party received a large donation in liquid cash. This comes after a media organisation and the opposition questioned the lack of transparency in electoral bonds. 

Subhash Chandra Garg replies to Chidambaram 

Talking to ANI, Garg replied to the assertions made by the former Finance Minister P Chidambaram, who called electoral bonds 'the biggest scam of the decade'. He said, “It is not 100% cleansing of the political donation system, but it is 70 to 90% cleansing of the system. Electoral bonds are not a scam. How can it be a scam when the political contribution is given from the white money of a company or from somebody's bank account after transparently buying it from the bank after due KYC? Also, there is corresponding disclosure of how much amount a political party received in the form of bonds by the political party to the Election Commission”.  

Read: RBI appoints 3-member advisory panel for DHFL

Read: Muraleedharan slams Cong for row on electoral bonds

Subhash Chandra Garg went on to explain that "from the time the announcement was made in Parliament to bring electoral bonds as part of the Budget 2017-18, the process of consultation for its implementation was going on. During this process, several rounds of consultation were done with the RBI. There are a lot of matters and features of the scheme over which consultations were held. RBI had views on several features." 

Outcome on the consultations with RBI 

Garg went on to explain that the RBI wanted to issue the bonds itself. "This was agreed to. There was also agreement on almost all of the features of the Scheme. After considering all the issues, the government finally made a decision about the essential features of the scheme. Now as that scheme was to be notified in a few days, I asked the Budget Division to keep it with them and draft the final notification taking inputs from RBI," he added. 

"Maybe the Joint Secretary did not fully understand or he thought it more advisable, the Budget Division sent the features of the scheme to RBI with a letter and asked RBI to send a notification copy based on these essential features. We could have drafted the notification within the Ministry," he added. Garg stated that the RBI did change its views in the matter "again after the broad features of the scheme were approved." 

Read: RBI should be given full power to regulate co-op banks: Marathe

Decision to issue bonds via SBI 

"After initial asking that the bonds should be issued by RBI only and in physical form, they later changed their view and wanted the electoral bonds to be issued digitally by RBI. Issuing electoral bonds digitally might have compromised with the essential feature of the scheme. Then again consultations were held with RBI, and later it was agreed that electoral bonds should be issued through SBI. RBI also took it to their board committee and accepted the issuance of electoral bonds in the manner finally notified by the Government," Garg said. 

"If this system (electoral bonds) has replaced cash contribution, then in my view this certainly has done something good to the country. I also believe the scheme has been implemented in quite a transparent and impartial manner. It should also be seen that all are still receiving money in cash still. If a political party is still receiving money in cash, that might be a scam, but the electoral bond is not a scam," Garg said.  

(With ANI inputs)

Read: Adhir Ranjan Chowdhury: Govt should form a committee to scrutinize electoral bonds

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Published November 29th, 2019 at 17:51 IST

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