The latest reports on Electoral Trust Contributions have confirmed a long-standing truth in Indian politics: funding remains heavily influenced by corporate interests. In the fiscal year 2024-25, electoral trusts contributed a staggering ₹3,811 crore to political parties, with the Bharatiya Janata Party (BJP) receiving an overwhelming ₹3,112 crore, constituting over 83 percent of total donations. The Indian National Congress garnered only ₹299 crore, just under 8 percent, while all other parties shared the remaining 9 percent. This distribution highlights a significant structural concentration of financial power within the political landscape.
To comprehend these numbers, it’s essential to understand the mechanism behind electoral trusts, which were established in 2013 with a straightforward intent: to redirect corporate donations away from cash transactions, ensuring transparency through banking channels. Under this system, companies and individuals donate to a registered trust, which, in turn, contributes to political parties. The rules dictate that trusts cannot accept cash and must allocate at least 95 percent of collected funds within the financial year. Both donors and recipients are required to register with the Election Commission, promoting formal transparency.
However, while the regulations are designed to improve visibility, they do not impose an equitable distribution among political parties. A trust can allocate its entire funds to a single party, reflecting its preferences without any restriction. This has led to the conclusion that over four-fifths of this year’s trust donations were directed to just one party.
This issue prompted the introduction of electoral bonds in 2018. The government suggested that the lack of anonymity pushed donors back to cash, fearing repercussions if their political preferences became public knowledge. Anonymity was positioned as a means to create a level playing field. Donors could acquire bonds from banks and provide them to political parties, which could cash them in without disclosing the donor’s identity.
A significant structural difference between electoral trusts and electoral bonds influenced donor behavior. While electoral trusts are capped in terms of donations-limited to 7.5 percent of a company’s average net profits over the prior three years-electoral bonds have no such ceiling. This removal allowed companies to contribute unlimited funds, including those operating at a loss or newly established firms, under the premise that removing limits would deter illicit financial practices.
The outcome was predictable. With the elimination of restrictions and guaranteed anonymity, corporate contributions disproportionately favored the party perceived as likely to maintain power. Data indicated that the BJP consistently secured the majority of bond proceeds, raising alarms about the use of a public sector bank, the State Bank of India, for transactions. Critics voiced concerns that while donations were anonymous to the citizens, they were not necessarily so to the state. In 2024, the Supreme Court intervened, declaring the electoral bond scheme unconstitutional, emphasizing that complete anonymity infringed on voters’ right to information.
In the absence of bonds, corporate donors quickly reverted to electoral trusts, resulting in a significant surge-trust donations more than tripled within a year. This shift indicates that while corporate money did not vanish, it merely changed hands.
The ongoing debate is whether the BJP’s financial gains are merely a reflection of its position in power. Historical data complicates this discourse. During the Congress-led United Progressive Alliance’s rule from 2004 to 2014, the BJP received more declared donations in most years, except for a brief period between 2005 and 2007. However, since 2014, this disparity has widened drastically, with the BJP’s donations surpassing ₹2,200 crore by the 2023-24 fiscal year, while Congress remained below ₹300 crore.
Does this indicate that corporate India has consistently favored the BJP? To some extent, yes. The BJP has cultivated a reputation for a systematic approach to fundraising, favoring direct interactions between donors and the party, thereby minimizing intermediaries and facilitating direct financial flows to the party.
Conversely, the Congress party’s narrative presents a different picture. Despite being in power for a decade, it failed to establish a robust fundraising infrastructure. Many leaders thrived as intermediaries, contributing to the financial weakening of the party organization. This erosion undermined its competitiveness over time.
Nonetheless, discussions about political funding cannot ignore the issue of cash donations. Contributions below ₹20,000 can still be made anonymously; previously, the threshold was ₹2,000. This loophole allows a large volume of political money to remain untracked and unaccounted.
While electoral bonds attempted to address some aspects of this problem, they fell short due to absolute anonymity devoid of accountability. Electoral trusts enhance disclosure but do not create a level playing field. As long as cash donations remain permissible and corporate money stays concentrated, true transparency in political funding will remain elusive. The latest data reveals not only the distribution of funds but also highlights how far India is from achieving a clean and equitable funding system.
Original Source: https://www.indiatodayne.in/opinion/story/whether-upa-or-nda-is-in-power-why-india-inc-donates-more-to-bjp-1320520-2025-12-21?utm_source=rssfeed
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Publish Date: 2025-12-21 23:13:00
