January 22, 2026

Pic courtesy: thequint.com
The finance minister has taken strong measures to bring transparency in political funding in the budget proposals. Post demonetization and the noise about black money, it was said that political funding was the main reason why black money was generated by businesses and individuals. Another reason why people preferred to pay parties in cash was because they did not want to disclose their names.

Parties were allowed to receive up to Rs 20000 in cash from one source. This measure was abused and large donations were broken into small parcels. This has now been reduced to just Rs 2000. This will bring about a huge difference and reduce black money generation. Parties can continue to receive any amount of funding by cheques or through digital means.

Further, electoral bonds will be introduced which could be purchased in specified denominations from scheduled banks only through cheques or other digital means. Donors can buy these bonds and donate them to political parties. These bonds will be encashable only in the bank accounts of registered political parties. These bonds will ensure that people can donate without disclosing their names. It will also ensure that banking channels are used for such donations, without involving black money.

While these measures alone will not clean up the political system entirely, they will go a long way in bringing transparency and eliminating black money. The government must be lauded for walking the talk and making a beginning.