In case a political party receives a political donation in cash primarily, then that might actually indicate a scam, he stated.
"It is not 100 per cent cleansing of the political donation system but it is 70 to 90 per cent cleansing of the system. Electoral bonds are not a scam," Garg said.
"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," he added.
Garg was replying to a question over former Finance Minister P Chidambaram, who earlier raised questions over electoral bonds and called it 'the biggest scam of the decade.'
"I have asked my family to tweet this on my behalf: electoral bonds are the biggest scam of the decade. Purchasers will be known to the bank and, therefore, to the government. The donor will be known to the party (BJP) to which he donated. The donor who did not donate to the BJP will be known to the BJP. If anyone is completely in the dark it will be the people of India. Long live transparency," Chidambaram had tweeted on November 23.
This comes after a news report by Indian Express on electoral bonds and the issue being raised in Parliament by various opposition parties against alleged lack of transparency in electoral bonds.
Garg added: "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."
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 said.
"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."
"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.
He also mentioned that in the process of consultations with all stakeholders, there are bound to be some difference in opinion and there is a process which results in harmonising the views and making of final decisions. He also cited that considerable consultations did take place with the Ministry of Law and after such comprehensive consultations only the final notification emerged.
Garg said that he did not consider that there was any difference between the government and the RBI regarding the scheme finally issued. He said that he does not recall whether RBI raised any objection or expressed any opinion after the scheme was notified.
The former Finance Secretary said that if an actual test of the scheme needs to be done, the test would be to compare whether cash donations have come down after introduction of electoral bonds or not and which party is receiving more donation in cash compared to electoral bonds.
The Election Commission has complete information relating to cash and electoral bonds received by each party and a comparison can be about how much cash contribution was there before the introduction of electoral bonds and now how much is received through electoral bonds now.
"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 who all are still receiving money in cash still. If a political party is still receiving money in cash, that might be a scam, but electoral bond is not a scam," Garg said.
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