The Supreme Court’s landmark judgment

On February 15, 2024, the Supreme Court of India delivered a historic verdict, declaring the electoral bonds scheme unconstitutional. A five-judge bench led by Chief Justice D.Y. Chandrachud struck down the scheme, citing that it violated the fundamental rights of citizens under article 19(1)(a) of the constitution—the right to freedom of speech and expression, including the right to information. The court ruled that anonymous political donations enabled a quid pro quo system and compromised electoral transparency.

The judgment was a blow to the ruling government, which had vigorously defended the scheme on the grounds of curbing black money in political funding. However, the court found that the scheme instead facilitated opaque financial transactions between corporate entities and political parties, disproportionately benefiting the party in power.

The dubious inclusion in the new income tax bill

Despite the court’s ruling, the recently proposed income tax bill, 2025, shockingly retains provisions related to electoral bonds under schedule VIII, which deals with ‘income not to be included in the total income of political parties and electoral trusts’. Legal experts have suggested that this could be a deliberate move to keep the door open for a modified version of the scheme, or a blatant defiance of the Supreme Court ruling.

The new bill is meant to replace the 64-year-old income tax act, 1961, simplifying tax structures, but it also preserves loopholes that enable anonymous political donations. The State Bank of India (SBI) had issued electoral bonds worth ₹16,518 crore in 30 tranches before the Supreme Court struck down the scheme. With the new bill’s provisions, the government appears to be laying the groundwork for a future reintroduction of electoral bonds, undermining the judiciary’s authority.

ALERT

Electoral bonds have been mentioned in the new Income Tax Bill’s Schedule VIII which deals with ‘Income not to be included in the total income of political parties and electoral trusts’https://t.co/5zQ2WBe1jh

— CommodoreLokeshBatra (@CommodoreBatra) February 19, 2025

This inclusion raises serious constitutional concerns, particularly in light of the doctrine of colourable legislation. This doctrine states that what cannot be done directly cannot be done indirectly. By embedding electoral bonds within the new tax framework, the government is attempting to circumvent the Supreme Court’s ruling through legislative manipulation. The bill, in essence, seeks to reintroduce a scheme that has already been declared unconstitutional, disguising it within a broader tax reform package. Such a move is an affront to judicial authority and undermines the doctrine of separation of powers.

Moreover, this legislative move also violates the well-established principle that parliament cannot pass a law to nullify a Supreme Court judgment. The Supreme Court has repeatedly held that while parliament has the power to enact laws, it cannot override judicial pronouncements declaring laws unconstitutional. The inclusion of electoral bonds in the new bill is a clear attempt to undo the court’s ruling through legislative backdoor tactics. This blatant disregard for judicial authority sets a dangerous precedent, effectively rendering constitutional checks and balances meaningless.

The case against Nirmala Sitharaman

Last year, Union Finance Minister Nirmala Sitharaman and Karnataka BJP Chief B.Y. Vijayendra were under legal scrutiny regarding the electoral bonds case. An FIR was registered against Sitharaman in Karnataka, alleging extortion under the guise of the electoral bonds scheme. The complaint, filed by Adarsh R. Iyer, co-president of the Janaadhikaara Sangharsha Parishath (JSP), accuses Sitharaman and BJP leaders of illegally extracting funds through the covert assistance of Enforcement Directorate (ED) officials, allegedly benefiting by over ₹8,000 crore.

However, the Karnataka High Court swiftly stayed the probe against Sitharaman, raising concerns about judicial interference in politically sensitive cases. Critics then argued that such legal shields reflect a broader trend of political impunity, wherein high-ranking officials evade accountability while citizens are deprived of transparency in electoral financing.

The larger implications

The government’s quiet attempt to reinstate electoral bonds despite a clear Supreme Court ruling is an affront to constitutional governance. It raises several alarming questions:

• Is the government attempting to override the judiciary through legislative subterfuge?
• How can an income tax bill include a provision that the Supreme Court has explicitly deemed unconstitutional?
• Why is the government adamant about anonymous political donations despite widespread public opposition?

These concerns reflect an emerging pattern of governance where constitutional mandates are disregarded, judicial decisions are undermined, and electoral transparency is sacrificed for political gain.

The electoral bond controversy is far from over. The Supreme Court’s ruling against the scheme was a victory for democratic integrity and transparency, but the government’s persistence in reviving an unconstitutional mechanism under the pretext of tax reform exposes its unwillingness to embrace accountability.

As citizens, we must remain vigilant against such systematic attempts to erode democratic institutions. If left unchecked, this could set a dangerous precedent where judicial verdicts hold no weight, and political funding remains a black hole of corruption. The time for demanding accountability is now—before democracy is reduced to a mere facade.

Related

Landmark Ruling: Supreme Court declares Electoral Bond Scheme unconstitutional in unanimous decision, citing violation of right to information

Supreme Court rejects SBI plea for extension in electoral bond case, pulls up the bank for the delay

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The Prudent Electoral Trust donated Rs. 723 Crore to the BJP; Rs. 85 Crore to the Bharat Rashtra Samiti (BRS)–the then ruling party in the state of Telangana; Rs. 72.50 Crore to the YSR Congress-the then ruling party in Andhra Pradesh. During the fiscal year 2023-24, electoral trusts received 51.23% of their total donations, amounting to Rs 624.195 cr, from the top 10 corporate donors. DLF Ltd, ArcelorMittal Nippon Steel India Ltd, Maatha Projects LLP, CESC Ltd, and Maruti Suzuki India Ltd were amongst the top donors to electoral trusts. Both DLF Ltd and ArcelorMittal Nippon Steel India Ltd contributed the highest amount of Rs 100 cr each. Following closely, Maatha Projects LLP donated Rs 75 cr, while CESC Ltd and Maruti Suzuki India Ltd each contributed Rs 60 cr.

After the Supreme Court declared the electoral bonds scheme to be unconstitutional in February 2024, electoral trusts have made a comeback, to fill the big gaping void left by the electoral bonds scheme. The Prudent Electoral Trust received the largest share of donations. Nearly three-quarters of those donations, amounting to Rs 797.1 crore out of a total of Rs 1,075.7 crore, were made after the Supreme Court’s decision on February 15.

How massive is ₹1,179 crore—the total sum funnelled by these Electoral Trusts into political parties? To grasp its scale, this is nearly the entire 2025 budget allocation for judiciary infrastructure or the estimated funding for cutting-edge R&D at Bhabha Atomic Research Centre (BARC). These are pillars of national progress, yet the same amount has been mobilised not for science, justice, or public welfare, but to tighten the grip of corporate power over our politics—all under the guise of “transparent” donations.

This article seeks to examine the democratic legitimacy of the Electoral Trusts, without invoking their presumptive constitutional status against their now unconstitutional successors-electoral bonds.

What are Electoral Trusts?

A legal trust is a financial or legal arrangement in which one party (the trustor or settlor) transfers assets to another party (the trustee) to hold and manage for the benefit of a third party (the beneficiary). Trusts are commonly used for estate planning, asset protection, and charitable giving.

In case of Electoral Trusts in India, the donors are the corporates, the trustee is whoever manages the trust, and the beneficiary is the political party. Sometimes, the trustor is also a corporation which would establish a trust and later transfer it to other auditors. For example, the Prudent Electoral Trust was established by Bharti Enterprises (the parent of Bharti Airtel) but was later transferred to independent auditors to be managed.

How are they structured?

Electoral Trusts (Trusts) are registered under Section 8 of the Companies Act, 2013 (Section 25 of the now repealed Companies Act, 1956), requiring approval from the Central Board of Direct Taxes (CBDT) and adhere to the CBDT rules. They must adhere to the provisions of the Income Tax Act, 1961. Trusts cannot accept foreign donations or contributions from government companies, ensuring domestic funding sources.

Operational Structure

1. Donations: Trusts receive voluntary contributions from Indian citizens, domestic companies, firms, or Hindu Undivided Families (HUFs) via cheques, bank drafts, or electronic transfers. Donors must disclose their Permanent Account Number (PAN).
2. Fund Distribution: At least 95% of collected funds must be disbursed to registered political parties, with the remaining 5% administrative expenses. Trusts cannot use donations for members’ benefit.
3. Transparency: Trusts must maintain audited accounts, disclosing donors, recipients, and disbursements to the CBDT and the Election Commission of India (ECI).

The issue with Electoral Trusts

The design of electoral trusts reflects a compromise between corporate interests and state regulation, embedding structural inequities into India’s political economy.

First, Trusts like Prudent Electoral Trust dominate the landscape, distributing funds disproportionately to major parties (e.g., the BJP and Congress—more to the BJP), entrenching incumbency and marginalising smaller voices. This concentration mirrors the broader political economy’s bias toward established power blocs, where corporate donors prioritise access to ruling parties over democratic pluralism. While Trusts disclose donor identities to regulators, they withhold critical details like trust deeds or allocation criteria, enabling deniability for corporations and opacity in fund distribution.

Second, the regulatory framework—governed by the Electoral Trusts Scheme (2013)—mandates minimal transparency. Trusts must distribute 95% of funds to registered parties but face no scrutiny over their internal governance. This loophole allows Trusts to operate as autonomous entities, ostensibly independent of donor influence, yet their opaque rules shield them from accountability. For instance, Prudent’s donations, though publicly reported, lack explanations for party-specific allocations, raising questions about quid pro quo arrangements. Essentially, we have multiple companies donating to the trust, and the trust funnelling the money to the party. We do not know whether the trust is funnelling the money to the party on the advice and suggestion of the donor or, if there is a cartel of sorts or anything as such. The public is kept in the dark as to what guides the division of money between parties, by trust when it executes the contributions.

Third, the rise of Electoral Trusts, post-electoral bonds, underscores the persistence of corporate dominance in political financing. Corporations leverage these trusts to maintain influence while avoiding direct exposure, perpetuating a cycle of crony capitalism. What was direct in Electoral Bonds’ case where there was complete anonymity for the donors, is indirect in Electoral Trusts which give the chance to companies to deny their role in disbursement of funds to the parties.  The ECI’s limited oversight—relying on limited disclosures—further weakens accountability, leaving voters uninformed about the true sources of party funding.  The disclosures mandated by the ECI and are publicly accessible do not have details of the trust deed, or the details of the criteria of division of funds between the parties.

Why Electoral Trusts undermine democracy

The shadows cast by Electoral Trusts reveal a deeper truth: the veneer of transparency masks a system designed to entrench power. These trusts, dominated by a few corporate giants, funnel funds to major parties while obscuring the strings attached. The illusion of autonomy—trusts claim independence from donors, yet their allocations disproportionately favour ruling parties—becomes a self-fulfilling prophecy. Smaller parties, starved of resources, fade into irrelevance, while voters internalize the inevitability of elite rule. This is not democracy; it is the cloaked control by capital, where power is consolidated without overt coercion.

The problem lies not just in the Electoral Trusts themselves but in the regulatory framework that enables them. The Electoral Trusts Scheme mandates minimal transparency, allowing trusts to operate as autonomous entities while shielding their internal governance from scrutiny. This loophole enables corporations to maintain influence while avoiding direct exposure, perpetuating a cycle of crony capitalism. The Election Commission’s reliance on self-reported disclosures further weakens accountability, leaving voters uninformed about the true sources of party funding.

Conclusion

To dismantle this system, we must embrace a vision of democracy that prioritises equity and accountability. First, Trusts must be required to disclose their internal rules and allocation criteria. Transparency is not merely a procedural requirement; it is the bedrock of democratic legitimacy. Second, corporate donations to trusts must be capped to prevent the concentration of political power. A model like Germany’s limit on corporate contributions could serve as a template. Third, public funding of political parties should be expanded to reduce reliance on corporate largesse.

Regulatory oversight cannot be passive; it must actively challenge the hegemonic practices that entrench corporate dominance. In the end, the choice is clear: will India’s democracy be a plaything of capital, or a vehicle for the people? The Electoral Trusts’ opacity is not a bug—it is a feature.

To dismantle this Electoral Trusts Scheme is to reclaim the promise of a nation where power belongs not to the few, but to the many.

(The author is a legal researcher with the organisation)

Related:

On March 5, 18 days after the SC stuck down electoral bond scheme, directing full disclosure of donor details, SBI fails to comply

Supreme Court rejects SBI plea for extension in electoral bond case, pulls up the bank for the delay

Electoral Bonds: SC directs all parties to reveal political funding details to EC

The post Electoral Trusts Scheme: Utter non-transparency in political funding & an unholy nexus between big corporate giants and major political parties appeared first on SabrangIndia.

The Electoral Bonds scheme has been the single legitimate way of funding to political parties, as introduced by the Bharatiya Janata Party (BJP) government in 2017. From the year 2017 to 2023, the BJP received 54.7% of the total contributions via electoral bonds, while the principal opposition Congress and the ruling party in Bengal-All India Trinamool Congress receiving approximately 9% each.[2] More about the Electoral Bonds scheme can be read here. Now that Electoral Bonds have been declared as unconstitutional, it becomes necessary to discuss ways to make campaign finance more transparent and its details- more accessible. This article explores various steps different countries across the world have adopted to make their campaign finance more transparent.

Before going further, it is important to keep in mind that there is a nexus between big money sources and the politicians across the world. This therefore presents a rather universal problem. However, the responses to this problem have been on the spectrum, ranging from lenient to stringent.

There are usually three pillars of campaign finance, across the world.

One is the cap on contributions/spending’s and restrictions on contributors i.e., limiting the amounts of money that one can give to a candidate or a party, or banning some persons from contributing to parties or candidates. Second is the regulation of spending, which sets limits on how much money candidates or parties can spend during an election cycle. And thirdly, transparency measures, which aim to ensure that the sources of campaign funds are disclosed to the public, allowing for scrutiny and accountability.

United Kingdom

In UK, as far as individuals and companies are concerned, they have to be in UK Electoral Rolls and UK registered respectively. The company should be registered as a company in UK, incorporated in UK, and should be carrying on business in UK i.e., all three conditions should be met with.  Any donation over £50 is required to be from a permissible donor. The candidates are required to keep the records of donors who give more than £50 and report them in the short campaign donations return. Short Campaign Period is the period beginning from the day of dissolution of Parliament whereas Long Campaign Period is the period that begins once the Parliament has sat for 55 months. There is a different allowance for the long campaign period.

The Political Parties, Elections & Referendums Act 2000(PPERA) governs the spending limits of parties. Under the PPERA, party (as opposed to the candidate spending limits in India) were introduced. Under this legislation, a formula was created for parties based on the number of constituencies in which a party fielded a candidate.[3] These limits only apply to the parties for 365 days prior to the polling day-the period being called the Regulated Period. While any party can spend approximately just over £1.458,440, for the region of England, and collectively an amount of £ 324, 090 for the regions of Scotland and Wales, irrespective of the number of seats they contest, parties are mandated to spend no more than £54, 010 per each constituency their candidate is contesting in for Great Britain.[4] Therefore, there are strict limits on spending of political parties Great Britain.

Within campaign spending, the items or services bought before the regulated period begins but used during it, or items or services given to the party free of charge or at a non-commercial discount of more than 10% and are used in campaign are also included. Political Parties are mandated to submit weekly donation reports to the Electoral Commission once the Parliament is dissolved. And after the election, Political Parties will have to report the spending and are mandated to keep invoices or receipts for any payments over £200.  Parties have 3 months to submit returns, or they get 6 months if they have spent more than £250,000.

European Union[5]

Anonymous Donations: Most countries don’t allow anonymous donations, especially large ones. Austria, Denmark, Germany, Italy, the Netherlands, and Romania are the exceptions with varying limits on how much can be given anonymously.

Foreign Donations: The majority of countries prohibit donations from outside their borders. Belgium, Denmark, Germany (small amounts), Luxembourg, the Netherlands, and Sweden are exceptions.

State-Owned Companies: Most countries ban donations from companies owned or controlled by the government.  Belgium, Denmark, Ireland, the Netherlands, and Sweden don’t have this restriction.

Additional Restrictions:  Over half of the countries in the EU have additional rules such as bans on donations from companies with government contracts or even bans on donations from any non-individual entities.

This is important since in India, the major issue about anonymity of Electoral bonds was due to the chance for Quid Pro Quo (a favour for a favour) being high.

Does a blanket Ban on Corporate funding work?

In 2015, Brazil banned corporate contributions to restrict the influence of big money on politics.[6] However, it was found that this reform did not stop individuals from donating money, although there was a limit of 10% of their last annual declared income.[7] This enabled super-rich individuals to dominate the campaign funding, which was not the intention.

For Political Parties’ funding, Brazil enables Special Fund for Financial Assistance to Political Parties- to transfer money to political parties.[8] The fund is made of federal budget allocations, fines, penalties and other donations and other financial resources allocated to them by law.

What would work for India?

During the run of the Electoral Bonds Scheme, even foreign companies could buy bonds and give those to parties for the latter to encash and no one would know. Therefore, the state of affairs in India, as far as political campaign finance is concerned, is dire. From here, any reform in terms of restricting contributions from certain people or ensuring that there is transparency in ‘who funds which party’ would be a forward step provided the government does not explore other innovative options to deteriorate the situation further.

In a conversational interview of former Election Commissioner SY Quraishi, former Supreme Court judge Justice M.B. Lokur and former BJP MP Subramanian Swamy and Senior Advocate Kapil Sibal- it was suggested that there could be a Corporate Cess or that the Election Commissions could maintain a fund-accepting donations from anyone from permissible-and later distribute it according to a formula.[9]

While these are workable suggestions, the first step would be to undo the loss the electoral bonds have done. That would be to examine the data that Election Commission will hopefully disclose owing to the Supreme Court’s directions in the judgement within the timeframe as directed by the Court. This exercise will give ways for further steps to be taken, like restriction on people who get government contracts from contributions, restrictions on contributions from those who have no profits etc. Only with these initial steps can we pave a path for better laws on Electoral campaign finance laws.

(The author is a legal researcher with the organisation)

[1] ADR vs. Union of India, 2024 INSC 113

[2] Nath, D. and Das, A. (2024). 57% vs 10%: BJP vs Congress share in electoral bond funds. [online] The Indian Express. Available at: https://indianexpress.com/article/political-pulse/bjp-congress-electoral-bonds-funds-9162973/

[3] The Constitution Unit (2023). Election spending limits: we’re going to spend, spend, spend (or are we)? [online] The Constitution Unit Blog. Available at: https://constitution-unit.com/2023/10/05/election-spending-limits-were-going-to-spend-spend-spend-or-are-we/

[4] Electoralcommission.org.uk. (2024). The spending limit. [online] Available at: https://www.electoralcommission.org.uk/party-spending-uk-parliamentary-general-election/spending-limit

[5] Financing of political structures in EU Member States, European Parliament, https://www.europarl.europa.eu/RegData/etudes/STUD/2021/694836/IPOL_STU(2021)694836_EN.pdf

[6] The Wire. (2018). In Blow to Big Money, Brazil Bans Corporate Donations to Parties, Election Campaigns. [online] Available at: https://thewire.in/external-affairs/in-blow-to-big-money-brazil-bans-corporate-donations-to-parties-election-campaigns

[7] Carolina, A., Burle, F. and Joaquim, M. (2023). In brief: political finance in Brazil. [online] Lexology. Available at: https://www.lexology.com/library/detail.aspx?g=f4af9afa-06c7-41f5-aba5-43da242fa552

[8] Tribunal Superior Eleitoral, Partisan Fund, https://international.tse.jus.br/en/partidos/partisan-fund.

[9] Dil Se with Kapil Sibal (2024). Electoral Bonds Illegal but BJP Now Has Rs 6500 Cr; SC Delay, Secrecy Give Modi Unfair Advantage. YouTube. Available at: https://www.youtube.com/watch?v=Hjr9gwxn-jI

Related:

Supreme Court unanimously hold Electoral Bond scheme to be unconstitutional, violative of right to information

‘Electoral Bond Scheme must be abrogated, favours ruling party, threats of money laundering,’: Coalition Report tells FATF

Electoral Bonds: A Democracy’s Trojan horse

Is India’s democracy being sold through electoral bonds?

SC expresses concern over the possible misuse electoral bonds, reserves its order on the matter

Centre Allowed Electoral Bonds Sale for 15 More Days Despite Official Objection: ADR

The post Electoral Bonds Scheme ‘Unconstitutional’: How do countries across the world deal with Campaign Finance? appeared first on SabrangIndia.

New Delhi: Aiming for reforms and transparency in donations received by political parties, the Election Commission has proposed reducing anonymous political donations from Rs 20,000 to Rs 2,000.

Sources said that the poll panel wrote a letter to the Union Law Ministry recommending various amendments in the Representation of the People Act.

Recently, the Commission delisted 284 non-compliant registered unrecognised political parties (RUPPs), declaring more than 253 of them inactive. Earlier, the Income Tax Department raided a number of such entities across the country on charges of tax evasion.

Currently, political parties have to disclose all donations above Rs 20,000 through their contribution report that is submitted to the EC.

Sources said that the Commission has proposed lowering the threshold limit for cash donations made to political parties from Rs 20,000 to Rs 2,000. In case the proposal gets approved, all donations above Rs 2,000 will be part of the contribution report which is submitted to the Commission.

There are a few political parties which have shown contributions above Rs 20,000 as nil, while their audited accounts statement showed receipt of huge amounts – all less than the limit of Rs 20,000.

The poll panel has also proposed to limit cash donations at 20 per cent or at a maximum of Rs 20 crore to cleanse election funding of black money.

Sources said that the proposed amendments will also lead to maintaining a separate account for receipt and payments related to elections by the candidate and the same has to be transparently disclosed to authorities as election expenditure.

Moreover, the Commission also wants every candidate to open a separate bank account for poll purposes which will have all the details related to all expenses and receipts as part of the election expenditure.

Sources said that electoral reforms proposed by the Election Commission also include segregation of foreign funds from the funds of the parties for more transparency into funding to political parties.

Courtesy: The Daily Siasat

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The Association for Democratic Reforms (ADR) which has been rallying for national political parties to disclose their sources of donations through different sources and the contentious electoral bonds given their anonymity and potential influx of illegal funding.

The ADR has now released a report on the donations of above Rs. 20,000 received by national political parties for the year 2018 – 19. The National Parties include Bharatiya Janata Party (BJP), Indian National Congress (INC), Bahujan Samaj Party (BSP), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India (Marxist) (CPM) and All India Trinamool Congress (AITC).

ADR’s report mentioned that the total donation declared (above Rs. 20,000) by the National Parties was Rs. 951.66 crore from 5,520 donations. Out of this the major donations, more than three times the aggregate declared by the INC, CPI, CPM an AITC, were the donations to the BJP which stood at Rs. 742.15 crore from 4,483 donations. The INC declared that it received donations of Rs. 148.58 crore from 605 donations.

It also stated that the donations saw a jump of almost 103 percent to Rs. 481.77 crore in 2018 – 19 from the previous year. The donations to the BJP saw a 70 percent increase from Rs. 437.04 crore in 2017 – 18 to 742.15 crore in 2018 – 19. The INC saw a 457 percent jump in donations from Rs. 26.658 in 2017 – 18 to Rs. 148.58 crore in 2018 – 19.

The states which contributed the largest amounts of donations to the parties were Maharashtra (Rs. 548.22 crore), Delhi (Rs. 141.42 crore) and Gujarat (Rs. 55.31 crore).

The corporate sector made 1,776 donations (92.06 percent) of Rs. 876.11 crore were made to the national parties while 3,509 donations (7.50 percent) were made by individual donors. Out of the 1,776 corporate donations, 1,575 donations amounting to Rs. 698.092 crore were made to the BJP. The individual donations to the BJP amounted to Rs. 41.70 crore coming from 2,741 individual donors.

The INC received a total of Rs. 122.5 crore via 122 donations from corporate / business sectors and Rs. 25.39 crore via 482 individual donors.  

CPI and CPM have also not declared the details of cheque and DD (cheque number, bank on which it was drawn and the date) for a total of 66 donations of Rs 78 lakhs and 31 donations of Rs 35.63 lakhs, respectively.

BSP has declared that for the past 13 years it hasn’t received donations above Rs. 20,000.

The report also stated that BJP did not declare the names of donors for 164 donations of Rs 2.34 crore in its contributions report for FY19. CPI (M) did not name one donor, who made a contribution of Rs 30,000.

The statement added that the BJP declared 452 donations of Rs 514.48 crore, the Trinamool Congress collected 89 donations of Rs 44.26 crore and the Congress received 51 donations of Rs 4.51 crore having incomplete cheque/DD details where cheque number, bank details on which it was drawn and the date on which the cheque was received/ encashed is not provided. “Thus, without the complete cheque/DD details, it would be a time consuming process to link the donors against their donations and hence trace the money trail,” it added.

Progressive Electoral Trust was the top donor. It donated a total of Rs 455.15 cr to BJP, INC and AITC together and is one of the top 2 donors to the three parties that received the maximum donations. The Trust donated Rs 356.535 crore to BJP (48.04% of total funds received by the party) and Rs 55.629 crore to INC (37.44% of total funds received by the party).

BJP and INC received a total of Rs 67.25 crore (9.06%) and Rs 39 crore (26.25%), respectively from Prudent Electoral Trust.  

ADR has also been battling for political parties to reveal their funding from electoral bonds, Sabrang India had reported earlier. On behalf of ADR, a plea was filed by Advocate Prashant Bhushan who had informed the court that around “6,000 crore had been collected under the scheme so far, which is being misused by the party in power”. The contentious electoral bond scheme had earlier been flagged by the Reserve Bank of India (RBI) and the Election Commission of India (ECI) as well.

ADR had said that the amendments made to the above mentioned acts, opened doors to funding from foreign companies, thus legalizing anonymous donations.

Again, no bones had been made by the opposition about how BJP has gained a lion’s share of electoral bond donations. Out of the Rs. 6,000 crore bonds that were sold in 2018 – 19, bonds worth Rs. 4,500 crore went to the BJP.

Earlier this month, the Election Commission of India (EC) had filed an affidavit before the Supreme Court (SC) saying that it had “received sealed covers” from 105 national, state, state unit of political parties, state parties and unregistered parties about donations garnered through electoral bonds.

Related:

EC files affidavit stating electoral bond donation details before SC
Foot in the door? SC agrees to hear ADR’s plea seeking stay on disputable electoral bonds scheme

The post BJP gets lion’s share of donations in 2018 – 2019; a 70% increase in funding from ’17 – 18 appeared first on SabrangIndia.

The Election Commission of India, on the basis of annual contribution reports submitted by political parties, has revealed that the Bharatiya Janata Party (BJP) raised Rs. 800 crore in FY 19 ahead of the Lok Sabha elections in May this year. Corporate India contributed over Rs. 472 crore to the party and over 75%, Rs. 356 crore, came from the Tata group’s Progressive Electoral Trust (PET) alone.

It is to be noted that the contributions from PET have gone up 20 times since 2014-15. While in 2014-15, it disbursed Rs. 25.11 crore to political parties, this year the cdole out has gone up to Rs. 600 crore.

The Congress received around Rs. 99 crore from four electoral trusts, of which 56%, Rs. 55.6 crore was handed over by PET.

While donations to the ruling party almost trebled, the Congress saw a surge of over eight times from last year. According to a report by The Times of India, total contributions to the BJP this year were up 69.5% from Rs. 437.69 crore in 2017-18. Congress received total donations Rs 146.8 crore in 2018-19, up from Rs. 26.66 crore in 2017-18. 

(Image Credit – The Times of India)

It is also interesting to note that the PET, which had not contributed to the Trinamool Congress (TMC) last year, distributed Rs. 43 crore to the party this year.

The second largest donor to the BJP was Prudent Electoral Trust, which is funded by the Bharti Airtel, DLF and the Hero group. This trust donated Rs. 67 crore to the BJP and Rs. 39 crore to the Congress. Last year, Prudent Electoral Trust had contributed Rs. 154 crore to the BJP and only Rs. 10 crore to the Congress.

The A B General Trust, the fourth largest contributor made payouts of Rs. 28.5 crore to the BJP and Rs. 2 crore to the Congress. This up from Rs. 12.5 crore and Rs. 1 crore to the BJP and Congress respectively.

Bharatiya Socialist Republican Electoral Trust is the fourth largest contributor to the Congress, with a modest Rs. 25 lakh.

BJP also gained a total of Rs. 10 crore, Rs. 5 crore and another Rs. 2.5 crore from the Harmony Electoral Trust, Triumph Electoral Trust and New Democratic Electoral Trust and Janhit Electoral Trust.

Telangana Rashtra Samithi (TRS) received Rs. 182.8 crore, Shiv Sena – Rs. 130.6 crore, TDP – Rs. 26.2 crore, YSR – Rs. 80.6 crore, CPM – approx. Rs. 3 crore, CPI – Rs. 1.6 crore and NCP – Rs. 12.1 crore. The Bahujan Samaj Party (BSP) declared nil contributions in excess of Rs. 20,000.

However, experts say that these figures do not give a clear picture of the total funds. The EC has not made any announcement of funds received from electoral bonds which are more preferable to the corporate world as the identity of the donor is kept confidential. However, in 2019, the Supreme Court directed political parties to submit receipts of amounts and the identity of donors to the EC.

Electoral bonds have been with stern resistance from parties like the CPI (M). They argue that ordinary citizens will not be able to know who is donating how much to which political party. BJP has been the biggest beneficiary of electoral bonds, garnering 94.5% of the bonds worth around Rs. 210 crore.

Related:

Assembly numbers bust the hype of BJP’s electoral dominance

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SBI issued electoral bonds worth Rs 3,622 crore in March and April: RTI

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The Association for Democratic Reforms (ADR), a non-partisan NGO working in the area of political and electoral reforms has released a report analysing the donations received by six major national political parties in the year 2016-17 and 2017-18 from corporate/business houses. The report titled ‘Analysis of Donations from Corporates & Business Houses to National Parties for FY 2016-17 & 2017-18’ analyses the sources, the type, the mode and the quantum of donations received by BharatiyaJanata Party (BJP), Indian National Congress (INC), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India-Marxist (CPM) and All India Trinamool Congress (AITC) in the two financial years (FY) preceding the election year. The report accounts for donation above Rs. 20,000 as political parties are required to submit details of only such donations to the Election Commission of India (ECI).

Major Findings:

• The report reveals that there has been a rise by 160% in donations above Rs.20,000 to national parties from corporates/business houses from 2004-12 to 2016-18.
• Parties received Rs. 378.89 cr in the period 2004-2012 and Rs. 985.18 cr in 2016-2018 alone.
• Between FY 2012-13 and 2017-18, donations from corporates to national parties increased by 414%, with a major drop in the percentage of corporate donations in FY 2015-16. The highest donations were in the FY 2014-15, during which the LokSabha elections were held.

• 93% of the total contribution to political parties from known sources came from corporates.
• BJP received the highest donations from corporates (94%) while CPI received the lowest (2%) in FY 2016-17 and 2017-18.
• Top three states from where maximum corporate donations were received, in FY 2016-17 & 2017-18, were Delhi (Rs 481.37 cr = 48.86%), Maharashtra (Rs 176.88 cr = 17.95%) and Karnataka (Rs 43.184 cr = 4.38%).

Party-Wise corporate donations:

• In FY 2016-17 and 2017-18, the 6 National Parties received a total of Rs 1059.25 cr via voluntary contributions above Rs 20,000 out of which Rs 985.18 cr (93%) was from corporates/ business houses alone.
• In FY 2016-17 & 2017-18, a total of 2061 corporate donations were received by national parties.
• The maximum number of donations were received by BJP, followed by INC, CPM, NCP, CPI and AITC.
• BJP declared receiving more than five times the total corporate donations (1731 donations) received by the rest of the 5 National Parties combined (330 donations) during the FY 2016-17 and 2017-18.

• BJP received the maximum donations of Rs 915.596 cr, which forms 94% of the total donations to the party above Rs 20,000 in FY 2016-17 and 2017-18.
• Between FY 2012-13 and 2017-18, BJP received the maximum corporate donations of Rs 1621.40 cr, constituting 83.49% of the total corporate donations in the six years
• INC declared a donation of Rs 55.36 cr (81%) from various corporate and business houses.
• CPI received the least amount of donations from the corporate sector, receiving a total of only Rs 4 lakhs (2%) from 7 donations.
• BSP has stated that the party received no donations above Rs 20,000 from any donor in FY 2016-17 and 2017-18.

The following tables give a brief of the amount and percentage of corporate donations received by national parties.

Categories of corporate donors:
The ADR report divides the corporate donations into 15 categories which includes Electoral Trusts, Manufacturing Companies, Real Estate, Power and Oil among others.

• Of the 985.18 cr corporate donations received between FY 2016-17 and 2017-18, Rs. 488.42 cr (49.58%) was received from Electoral trusts followed by Manufacturing companies (Rs. 120 cr = 12.18%), Real Estate (Rs. 90.57 cr = 9.19%) and the least was received from Education firms (Rs. 0.67cr = 0.07%).
• Further, Rs. 22.59cr (2.29%) was received from the unsegregated category, which includes companies with no details available online or those with no clarity regarding the nature of their work.

• The top 10 corporate donors in FY 2016-17 and 2017-18, led by Prudent/Satya Electoral Trust, gave donations to BJP with only 3 of them giving it to INC.

Mode of donations:

ADR report comprises of four modes of donations- Cheque/DD, Bank transfer, Cash and Incomplete and Undeclared sources.

• Overall, highest amount has been received through Cheque/DD (Rs 786.603 cr = 79.84%), followed by Bank Transfer (Rs 175.764 cr = 17.84%).
• Mode of payment is either incomplete or undeclared in case for 211 donations through which National Parties received Rs 22.81 cr, which forms 2.32% of the total amount of donations received by corporate/business houses.
• 52.96% (Rs 12.08 cr) of the total donations with Incomplete and undeclared mode of payment have been received by the INC alone while 124 donations or Rs 8.066 cr of the total donations with Incomplete or undeclared mode of payment was received by the BJP.
• 100% of corporate donations to AITC either have incomplete or undeclared mode of payment.

• A total of 916 donations through which National Parties received Rs 120.14 cr do not have address details in the contribution form.
• 98.77% of such donations worth Rs 118.66 cr without address details belong to the BJP.
• In case of 84 donations through which Rs 2.55 cr have been received, there is neither PAN detail, nor address is available.
• 98% of such donations worth Rs 2.50 cr without PAN and address details belong to the BJP.
• Overall, there were a total of 20 donations declared by National Parties in which there was absolutely no information related to PAN, address and incomplete details of the mode of payment of donations.

Recommendations of ADR
1. The Supreme Court gave a judgment on September 13, 2013, declaring that no part of a candidate affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs20,000, should be blank.
2. All donors who have donated a minimum of Rs 20,000 as a single or multiple donations should provide their PAN details.
3. Date on which the donation was made should be recorded by the party and submitted in Form 24A.
4. Any party which does not submit its donation statement to the ECI on or before 31st Oct should be heavily penalized and its income should not be tax-exempted.
5. A total of Rs 2.55 cr was collected by the National Parties from 84 corporate donors without obtaining their PAN and Address details. Such incomplete contributions reports must be returned to the parties by the ECI, to deter them from providing incomplete information.
6. Corporates should make details of their political contributions available in the public domain through their websites (in annual reports or in a dedicated page) for increasing transparency in political financing.
7. Annual scrutiny of donations reports of National, Regional and unrecognized parties should be initiated by a dedicated department of the CBDT, to discourage donations from shell companies or illegal entities.

Related Articles:

1. Electoral Bonds: SC directs all parties to reveal political funding details to EC
2. Should Political Funding in India be Transparent?
3. Foreign Funding for Political Parties: SC Issues Notices to Centre

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New Delhi: The Supreme Court on Friday refused any interim stay on the electoral bond scheme and directed all parties to submit details of political funding received so far to the Election Commission in “sealed covers” by May 30.
 
A bench headed by Chief Justice of India Justice Ranjan Gogoi and comprising Justices Deepak Gupta and Sanjiv Khanna, ordered the parties to furnish receipts of electoral bonds to the poll body, providing information on the identity of donors and the amount in the account of donors.
 
The apex court observed that “rival contentions” by the petitioners and respondents “raise weighty issues which have a tremendous bearing on the electoral process” and that the matter will require a detailed hearing. It posted the matter for hearing on an “appropriate date”.
 
Besides this, the court also directed the Finance Ministry to reduce the window of purchasing electoral bonds from 10 days to five days in April-May.
 
The top court was hearing pleas by the CPI(M) and the NGO Association of Democratic Reforms (ADR) challenging the scheme. Appearing for petitioner ADR, advocate Prashant Bhushan had earlier said that according to Election Commission figures, bonds worth Rs. 210 crore of the total Rs. 221 crore purchased had gone to the BJP.
 
However, objecting to it, Attorney General K K Venugopal said Bhushan was making an election speech. Responding to queries from apex court earlier, he had said “transparency cannot be the mantra” and “my opinion is voters have the right to know about their candidates… why should they know where the money of political parties is coming from”.
 
The BJP-led NDA government had announced electoral bonds in the earlier budget, claiming that the scheme would clean up political funding. Finance Minister Arun Jaitley had also defended the use of electoral bonds, saying that if the donors are asked to disclose names of political parties to whom they give money, it would result in return to the earlier system of usage of cash and black money in political funding.
 
The government had brought in the electoral bond scheme as an alternative to cash donations made to political parties as part of its efforts to bring transparency in political funding. Under the scheme, the name of the donor is known only to banks.
 
BJP received Rs. 997 crore and Rs. 990 crore through donations in 2016-17 and 2017-18 respectively, five times more than what Congress received in the same period, the Election Commission told the Supreme Court on Thursday.
 
Appearing for the EC, senior advocate Rakesh Dwivedi gave the information to a bench of Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna while hearing a petition by Association for Democratic Reforms which sought transparency in anonymous donations through electoral bonds, alleging that at present they encouraged corruption and generated black money.
 
“BJP has shown a receipt of Rs. 210 crore through electoral bonds (which is exactly 95% of the total amount redeemed by political parties),” the EC said. This means all other parties put together received a paltry Rs. 11 crore as donation through electoral bonds as compared to Rs. 210 crore by BJP during 2017-18,” Dwivedi said.
 
The EC, however, added, “A large portion of the funding of political parties in earlier years (90% in 2015-16 and 62% in 2016-17) was in cash donations of less than Rs. 20,000. If a part of the cash donations is now received through electoral bonds, it would mean that clean, tax-paid money is being used for political funding.”
 
Total donations received by BJP in 2016-17 was Rs. 997 crore. Of the total, the party declared Rs. 529 crore before the EC which showed that it received Rs. 468 crore in cash donations, each below Rs. 20,000, from anonymous persons. In the same period, Congress received Rs. 180 crore in donations of which Rs. 138 crore was through small donations from anonymous persons.
 
In 2017-18, BJP received Rs. 990 crore in donations of which Rs. 342 crore was through small cash donations by anonymous persons and Rs. 210 crore by way of electoral bonds. Congress, in the same period, received Rs. 168 crore of which Rs. 141.50 crore was through small donations from anonymous persons and Rs. 5 crore through electoral bonds.
 
What is the Electoral Bonds Scheme?
Anyone can buy an electoral bond at the government-owned State Bank of India in denominations ranging from 1,000 rupees to 10 million rupees ($14 to $140,000). Afterwards, they are delivered to a political party, which can exchange them for cash. They don’t carry the name of the donor and are exempt from tax.
 
They are available for a period of 10 days each in the months of January, April, July and October, with an additional period of 30 days specified by the central government in the year of general elections.
 
The bonds can be purchased only after making payment through KYC-compliant account. They can be encashed by an eligible political party only through a designated bank account with the authorised bank.
 
An electoral bond is valid for 15 days from the date of issue. No payment would be made to any payee political party if the bond is deposited after the expiry of the validity period. The bond deposited by any eligible political party into its account would be credited on the same day.
 
SBI is the only authorised bank to issue such bonds.
 
Read Also: Is India’s democracy being sold through electoral bonds?
 

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These amendments were seen as an attempt to overturn the judgment passed by the Delhi High Court in March 2014 holding the two major political parties, BJP and INC, guilty of accepting foreign funding. The Delhi High Court ordered the Central Government and Election Commission of India to take action against BJP and INC within six months. (Click here for the copy of the judgment –  https://bit.ly/2KsTB0c ).

These amendments to the FCRA law have opened doors to unlimited political donations from foreign companies and also legitimizing financial contributions received from foreign sources. The petition was necessitated due to the intransigence of the Central Government in complying with the Delhi HC order of March 2014 and instead trying to get BJP and INC off the hook by amending the FCRA 2010 in 2016 and subsequently the FCRA 1976 in March 2018.

Prof. Jagdeep Chhokar, Founder Member & Trustee, ADR said, “I hope that the Supreme Court will strike down the amendments introduced in FCRA 2010 by Section 236 of Finance Act, 2016 and by Section 217 of the Finance Act, 2018 as void, illegal and unconstitutional”.

The petition may be read here:
 

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The Supreme Court today issued notices to the Centre and Election Commission of India on a petition filed on behalf of Association of Democratic Reforms (ADR) and Centre for Public Interest Litigation (CPIL) challenging various amendments made through the Finance Act 2017 and the Finance Act 2016 in the Companies Act, Income Tax Act, Representation of People’s Act, Reserve Bank of India Act and Foreign Contribution Regulations Act.

The petitioners had submitted that the these amendments in question had opened floodgates to unlimited corporate donations to political parties and anonymous financing by Indian and foreign companies, which can have serious repercussions on the Indian democracy. The said amendments have removed the caps on campaign donations by companies and have legalised anonymous donations. There was also no transparency in the donation process. The petition, filed through advocates Prashant Bhushan and Neha Rathi, also sought a direction that political parties must not be allowed to accept any cash donations.
 
“The Finance Act of 2017 has introduced the use of electoral bonds which is exempt from disclosure under the Representation of Peoples Act, 1951, opening doors to unchecked, unknown funding to political parties. The Finance Act, 2016 has also amended the Foreign Contribution Regulation Act (FCRA), 2010, to allow foreign companies with subsidiaries in India to fund political parties in India, effectively, exposing the Indian politics and democracy to international lobbyists who may want to further their agenda. These Amendments pose a serious danger to the autonomy of the country and are bound to adversely affect electoral transparency, encourage corrupt practices in politics and have made the unholy nexus between politics and corporate houses more opaque and treacherous and is bound to be misused by special interest groups and corporate lobbyists,” it said.

The petitioners also submitted that such wide-ranging amendments in various statutes were brought in illegally as a Money Bill, in order to bypass the Rajya Sabha.
 
The details of the amendments made to various statutes introduced through Finance Act, 2017 and Finance Act 2016 are:
1. Section 31, the Reserve Bank of India Act, 1934 through Part III, Section 135 of the Finance Act, 2017,
 
2. Section 29C, the Representation of the People Act, 1951 through Part – IV, Section 137 of the Finance Act, 2017,
 
3. Section 13A, the Income Tax Act, 1961 through Chapter III, Section 11 of the Finance Act, 2017 and in
4. Section 182 of the Companies Act, 2013 through Part-XII, Section 154, the Finance Act, 2017.
5. Section 2 of the Foreign Contribution Regulation Act, 2010 (FCRA) through Finance Act, 2016.
 
According to the petitioners, the above amendments were unconstitutional and violative of the doctrine of separation of powers and a citizen’s fundamental right to information, which are parts of the basic structure of the Constitution.
 
 

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