Political parties receiving donations above Rs.2,000 will now have to disclose the identity of the donor, Finance Minister Arun Jaitley said, 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.
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.