The electoral bonds mechanism is a substantial improvement in transparency over the present system and the government is open to suggestions to further cleanse political funding, Finance Minister Arun Jaitley said on Sunday.
In a Facebook post, Jaitley said the conventional practice of funding the political system was to take donations as well as undertake expenditures in cash.
The sources are anonymous or pseudonymous. The quantum of money was never disclosed and the system ensures unclean money coming from unidentifiable sources.
"It is a wholly non-transparent system. Most political groups seem fairly satisfied with the present arrangement and would not mind this status-quo to continue.
"The effort, therefore, is to run down any alternative system which is devised to cleanse up the political funding mechanism," Jaitley said.
The finance minister had last week announced the contours of the electoral bonds, which will be sold by country's latest lender SBI and will have a tenure of just 15 days.
The bonds are being pitched as an alternative to cash donations made to political parties.
Jaitley said the choice has now to be "consciously" made between the existing system of substantial cash donations involving unclean money and other transparent options like cheque, online transactions or electoral bonds.
"While all three methods involve clean money, the first two are totally transparent and the electoral bonds scheme is a substantial improvement in transparency over the present system of no-transparency," he said.
"The government is willing to consider all suggestions to further strengthen the cleansing of political funding in India. It has to be borne in mind that impractical suggestions will not improve the cash denominated system. They would only consolidate it," Jaitley wrote.
He said India, despite being the largest democracy in the world, has not been able to evolve a transparent political funding system in the last seven decades.
"The round the year functioning of the political parties involves a large expenditure...These expenditures run into hundreds of crores. Yet there has not been a transparent funding mechanism of the political system," he said.