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98-594: The course of action was introduced in The Finance Bill, 2017 during the Union Budget 2017-18 by then Finance Minister Arun Jaitley . They were classified as a Money Bill, and thus bypassed certain parliamentary scrutiny processes, in what was alleged to be a violation of Article 110 of Indian constitution. Mr Jaitley also proposed to amend the Reserve Bank of India (RBI) Act in order to facilitate

196-650: A bank account in Gujarat with the intention of facilitating this fraud. Jan Raajya Party in Kanpur was investigated and feud between its co-founders Ravi Shankar Yadav and Omendra Bharat was revealed. It was found that Bharat is known to have later joined the Aam Aadmi Party . In November 2016, Arunesh Kumar Singh, the incumbent party president at the time, lodged a First Information Report (FIR) against Yadav, accusing him of engaging in financial misdeeds. The FIR

294-509: A drive in May 2022 to cleanse the political landscape as it was observed that a significant proportion of the RUPPs had exhibited minimal electoral engagement. In the 2019 Lok Sabha elections , a mere 673 parties participated, representing less than 30% of the total RUPPs. Similarly, in the 2022 Uttar Pradesh Legislative Assembly election , only 265 RUPPs out of over 800 registered parties contested in

392-563: A legally registered political party under the Representation of the People Act, 1951 (u/s 29A) which had received at least 1% of the votes in the last election. The stanches of bonds were available for purchase for 10 days in the months of January, April, July, and October with an additional time-frame of 30 days in the year of general elections for Lok Sabha . Electoral bonds featured anonymity since they bore no identification of

490-538: A notable increase of 62.39% in comparison to the total sales of Rs 1,056.73 crore achieved through six tranches conducted in March, April, May, July, October and November of 2018. From 1 July to 10 July, SBI conducted the 21st phase of Electoral Bond sale. From 19 January to 28 January, 25th electoral bond sale was carried out while 26th phase of sale worth ₹970.50 crore was conducted from 3 April to 12 April ahead of Karnataka assembly elections on 10 May 2023. Based on

588-457: A potential scenario wherein benefactors may procure bonds using funds acquired through legitimate means or subjected to taxation, and subsequently vend them to a third party utilizing illicitly obtained or undeclared funds for tax purposes. The third party may then transfer the bonds to a political organization. A major issue with political financing in India is the anonymity of funding sources. Since

686-433: A significant impact. It is said that the upcoming elections will not be directly affected by these changes, but the government is likely to view them as an opportunity for Narendra Modi to enhance his reputation as a fighter against corruption. This comes after he announced several measures to address illegal wealth. It is difficult to fully understand the financial aspects of politics in the world's largest democracy due to

784-519: A sufficient vote share in State Assembly or Lok Sabha elections to attain state party status, or those that have abstained from participating in elections since their registration. As of 2023, Electoral Bonds emerged as the primary means of income for political parties. The recent unanimous Supreme Court five-judge bench verdict comprising Chief Justice of India, DY Chandrachud, Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra on

882-409: A tendency to possess a vested interest in maintaining the anonymity of fund origins due to the predominant presence of unreported funds. These parties not only tolerate the existence of illicit funds in the form of "black money" but also safeguard their sources and actively engage in their utilization. Regrettably, comprehensive documentation in regard to the allocation of these funds does not exist as it

980-502: A total of ₹99.84 crore in electoral bonds during the fiscal year 2018-19, ₹74.35 crore in 2019-20, ₹96.25 crore in 2020-21, and ₹60 crore in 2021-22 but the YSRCP refrained from disclosing this information in its publication, Saakshi , indicating a lack of transparency and accountability. 2017 Union budget of India The 2017 Union Budget of India is the It was presented before

1078-564: Is a major concern under need for electoral reforms in India. The financing of the world's most extensive electoral process remains a perplexing issue, as the involvement of businesses in supporting both disclosed and undisclosed expenditures during elections has been a matter of public knowledge for a considerable period. On 21 December 2020, the Central Information Commission issued a verdict that political parties cannot be classified as "public authorities" and hence

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1176-616: Is believed to be from the period before 12 April 2019. The data released by the ECI showed that the biggest donor was Future Gaming and Hotels Pvt Ltd run by Mr Santiago Martin. This lottery company purchased bonds worth Rs 1,300 crore during the period 2019–2024. Of these, bonds worth Rs 100 crore were purchased seven days after a raid by India's Enforcement Directorate over charges of money laundering. The second and fifth biggest donors - Megha Engineering and Infrastructures Ltd and Vedanta Limited - also faced probes by law enforcement agencies during

1274-620: Is currently under investigation for suspected efforts to legitimize illicit funds following the demonetization in November 2016. Additionally, there are indications that certain organizations have served as intermediaries for gathering donations intended for purposes unrelated to electoral activities. The Election Commission furnished the I-T department with details of 2,174 Registered Unrecognized Political Parties that have failed to furnish their mandatory annual financial reports. In September 2022,

1372-622: Is not mandated by any of the existing laws. Consequently, electoral finances and expenditures emerge as the principal catalysts for corruption and the proliferation of unaccounted funds, hence the black money is widely prevalent in Indian politics. While the Modi-administration has taken steps to address the issue of political funding by imposing restrictions on cash donations and introducing "election bonds", some politicians and election officials believe that these measures will not have

1470-515: Is the major chunk of revenue generated by political parties as per their mandatory disclosures. All political parties including RUPPs are "entitled" to acquire contributions from both the general public and various organizations, while simultaneously benefiting from tax exemption as stipulated by the Income Tax Act. It is important to note that any donations received by the political party are entirely exempt from income tax, thereby affording

1568-723: Is unconstitutional and infringes upon the doctrine of separation of powers and the citizen's fundamental right to information, both of which form integral components of the basic structure of the Constitution. The PIL was initiated in October 2017, with the Ministry of Finance submitting its response in January 2018 and the Law Ministry responding in March 2018. The Supreme Court considered a collection of petitions submitted by

1666-535: Is worth noting that out of these 219 RUPPs, 66 of them did not fulfill the requirement of submitting their contribution report. Furthermore, for the year 2019, a substantial number of 2,056 RUPPs have yet to file their annual audited accounts. Among the 115 RUPPs located in Assam, Kerala, West Bengal, Tamil Nadu, and Puducherry, which underwent elections in early 2021, only 15 have successfully submitted their election expenditure statement. Election Commission has initiated

1764-789: The Election Commission of India reveals that BJP obtained electoral bonds amounting to ₹215 crore, whereas the Congress party received only ₹5 crore. It is noteworthy that no other registered political party, national or regional, has reported receiving any form of contribution through electoral bonds. The third phase of electoral bond sale was scheduled for purchase from 1 May to 10 May at eleven SBI branches in Chennai, Kolkata, Mumbai and New Delhi along with designated branches in Assam, Gujarat, Haryana, Karnataka, Madhya Pradesh, Punjab, Rajasthan and Uttar Pradesh. An application under

1862-591: The Finance Minister of India , Arun Jaitley has quoted that the Agenda for 2017-18 is "Transform, Energise and Clean India" – TEC India. He further went to explain that TEC India means to The printing of the budget documents began with a traditional Halwa ceremony in January 2017.32 It's the first budget after major changes in the economy like Goods and Services Tax (India) and 2016 Indian banknote demonetisation . Railway budget will be merged with

1960-520: The KYC norms laid down by the Reserve Bank of India (RBI). They could be procured by a donor solely through the means of cheque or digital payments in various denominations, such as one thousand, ten thousand, one lakh, ten lakh, and one crore from specific branches of the State Bank of India (SBI). Within a span of 15 days of issuance, these electoral bonds could be redeemed in the designated account of

2058-842: The Representation of the People Act, 1951 stipulates specific requirements for public disclosures on the donations received and expenditure made by political parties. According to a report by ADR, regional political parties garnered an approximate sum of Rs 108 crore during the fiscal year 2015-16 through donations exceeding Rs 20,000. It is noteworthy that this threshold mandates the disclosure of funding sources. Among 16 regional political parties that have publicly acknowledged receiving donations exceeding Rs 20,000, it has come to light that 9 parties, namely Shiv Sena , Aam Aadmi Party , Pattali Makkal Katchi , YSR Congress Party , All India United Democratic Front , Indian Union Muslim League , Maharashtra Navnirman Sena , Shiromani Akali Dal , and Desiya Murpokku Dravida Kazhagam , have neglected to disclose

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2156-484: The first tranche of electoral bonds were made available for purchase over a span of ten days. State Bank of India issued and encashed these electoral bonds in fours of its branches at Chennai, Delhi, Kolkata and Mumbai. Analysis of political parties' "Audited Accounts Contribution Statements" for the fiscal year 2017-18 ending on 31 March, which were duly submitted to both the Income Tax Department and

2254-474: The parliament on 1 February 2017 by the Finance Minister of India , Arun Jaitley with 21.47 lakh crore rupees (US$ 336.39 billion) budget size. The Finance Minister of India started speech by quoting "Madam Speaker, On this auspicious day of Vasant Panchami, I rise to present the Budget for 2017-18. Spring is a season of optimism. I extend my warm greetings to everyone on this occasion." In his speech

2352-630: The "black money" and restricting the utilization of campaign spaces, names, and symbols. In 2018, the Modi-government with the support of opposition Congress changed the legal provisions which enforced prohibition of foreign funding to Indian political parties. Both parties were found guilty in the Court ruling for violating the norms. From an amendment in the previously existing stricter laws of Foreign Contribution (Regulation) Act, 2010, political parties in India are presently granted immunity from

2450-682: The Anti Corruption Bureau (ACB) Court, indicating that the Telugu Desam Party (TDP) received ₹27 crore in the form of electoral bonds as donations during the fiscal year 2018-19. This substantial amount allegedly serves as proof of the funds that were misappropriated in a skill development project. Calling this a political hunt and misuse of state police machinery, the TDP countered that ruling YSR Congress Party (YSRCP) led by Chief Minister Y. S. Jagan Mohan Reddy had obtained

2548-506: The BJP acquire approximately 95 percent of the total bonds, as per information obtained by Reuters through a Right to Information request and BJP submissions. The purpose of introducing the bonds was to expose illegal money and increase transparency in political funding. However, critics argue that it has had the opposite effect, as they claim the bonds are shrouded in secrecy. There exists an absence of publicly available documentation regarding

2646-590: The Congress, totaling ₹3,323.39 crore, and 65% of the total income acquired by the BJP, amounting to ₹2,125.91 crore was attributed to unknown sources. The CPI(M) declared ₹893 crore as its income, which was third highest in 2014–15. Samajwadi Party had the highest income of ₹819.1 crore among regional political parties while Dravida Munnetra Kazhagam (DMK) reported second highest income of ₹203.02 crore followed by All India Anna Dravida Munnetra Kazhagam (AIADMK) with third highest net revenue of ₹165.01 crore. ADR study showed 94% of Samajwadi Party income (₹766.27 crore)

2744-623: The Corona Pandemic, the auditor of Garvi Gujarat Party revealed expenditures of an amount exceeding ₹4.0 crore in FY 2019–20. The auditor's report merely mentioned that they did not observe the actual execution of the party's programs or activities. In the year 2022, the income tax department conducted a raid on the premises of the political party's office. The audit report of the Jan Sangharsh Virat Party indicates that

2842-522: The DMK. It remains unclear how the smaller party utilized the significant contribution from the DMK, as neither its audit report nor its election expenditure statement for the 2019 Lok Sabha polls were available on the website of the chief electoral officer, Tamil Nadu. While such transactions are not prohibited, it raises questions about whether the DMK donors were aware that a substantial portion of their donation would be further donated to an unrecognized party in

2940-582: The Election Commission can't do much in situations where legislative modifications are tailored to accommodate the interests of corporate benefactors and political organizations that receive financial contributions from businesses including foreign entities. In 2023, former CM Chandrababu Naidu was arrested and the Andhra Pradesh Criminal Investigation Department (CID) had submitted evidence to

3038-675: The Election Commission discovered that the existence of these parties, in and of itself, does not pose a significant problem. However, the extensive financial fraud in which these organizations are implicated gives rise to apprehensions regarding various financial transgressions, encompassing tax evasion and illicit money transfers. The magnitude of the sums involved in these illicit activities could potentially reach billions of rupees. EC investigations have revealed that numerous such political parties are engaged in either evading substantial amounts of income tax or participating in money-laundering activities. For instance, Jan Raajya Party of Uttar Pradesh

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3136-407: The Election Commission due to their failure to comply with various legal requirements. Nevertheless, this action primarily signifies that these parties are deprived of obtaining a symbol, thereby rendering them ineligible to participate in elections, a circumstance that a considerable number of them do not engage in regardless. Despite this limitation, these parties persist in their existence and retain

3234-525: The Electoral Bond has received much attention. It has been hailed as a significant step in bringing the much needed cleaning in the funding of the parties and would set new paradigms for the funding of the political parties. Donors — individual or corporate — who contribute less than ₹20,000 to any political party in a single tranche are not obligated to disclose their details and their contributions are classified as unknown income. Additionally, after

3332-418: The FY 2019-20 includes a mention of an indirect income amounting to ₹1.42 crore and indirect expenses totaling ₹1.38 crore, without providing any specific details. This was also during the pandemic period. Based on this information, the Election Commission deduces that the auditor lacks knowledge regarding the sources and destinations of the aforementioned funds. The Election Commission's initiative to weed out

3430-704: The Gandhinagar branch was, in fact, "belonged" to the Bengaluru branch of the State Bank of India. The RTI applicant regretted the claims of transparency made by the government. The RTI response of SBI to a query by Vihar Durve has shown that the 2019 sale of Electoral Bonds in two tranches of January and March at eleven SBI branches, prior to the Lok Sabha elections in May, has experienced a significant surge amounting to Rs 1,716.05 crore. This figure represents

3528-558: The I-T Act, 1969. Donations in the form of cash amounting more than ₹2,000 are deemed ineligible for deduction under this provision. According to the Centre for Media Studies estimations, 2019 Indian general election was expected to see an expense of ₹55,000 crore ($ 8.6 billion) Expenditure Division of the Election Commission of India publishes the declared expenditure filed by the political parties in public domain. Section 29C of

3626-560: The Income Tax Department conducted raids on 23 RUPPs across 110 locations. In September 2022, a kite selling shop — the premises of Sardar Vallabhbhai Patel Party at Dattapada Road in Borivali, Mumbai was subject to a raid conducted by officials of Income Tax Department. The president of the party, Dashrath Bhai Parekh claimed that all financial contributions were legal and the crores of rupees in party's income came from

3724-550: The Mhada Colony Slums in Wadala, Mumbai. He was allegedly involved in money laundering activities. It is noteworthy that the auditor of both political parties — Sardar Vallabhbhai Patel Party and Jantawadi Congress Party — was Kashyap Kumar Ishwarbhai Patel. Furthermore, Patel's appointment as auditor for both parties occurred on the same date of 5 January 2021, and the letters of appointment issued by both parties share

3822-649: The Money Bill was seen previous to the retrospective amendments made to the Foreign Currency Regulation Act (FCRA) by the government, on two separate occasions, in an effort to shield the BJP and the Congress from prosecution for FCRA violations, as determined by the Delhi High Court . The UPA -administration had earlier implemented "Electoral Trusts" with false narratives on better electoral fundings. All political parties have

3920-464: The New Delhi branch encashed electoral bonds worth ₹117.58 crore. Previously, it was mandatory for all political parties to report the names and other details of donors who contribute more than ₹20,000 towards the party fund while filing their income-tax returns. Information was not sought for those donating an amount less than ₹20,000. Such donations were declared as Income from "unknown sources" and

4018-556: The Permanent Account Number (PAN) details of 1,567 donations. These parties have collectively amassed a substantial sum of Rs 6.79 crore through such undisclosed contributions or "unknown sources". During the financial years of 2014-15 and 2015–16, a collective of 26 regional political parties have failed to submit their donations report to the Election Commission of India (ECI). Among these parties, 21 have neglected to file their reports for both financial years, while

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4116-523: The RUPP ecosystem has brought to light the involvement of numerous fake political parties in the acceptance of fraudulent donations through cheques or banking channels, subsequently returning the funds in cash after deducting their commission and funneling the money through various intermediaries. Primarily, this practice results in a financial loss for the government, as both these parties and their donors can seek exemptions from income tax. Furthermore, apart from

4214-534: The Right to Information (RTI) Act was filed in May 2018 to obtain information on cumulative number of donors and the aggregate quantity of electoral bonds sold by each authorized branch during the months of March and April, among other relevant particulars. The Central Public Information Officer (CPIO) declined the application in June 2018, citing that the compilation of such data would result in "disproportionate diversion of

4312-424: The State Bank of India to disclose the details of electoral bonds to the Election Commission of India (ECI) by the end of business hours the next day. This data was subsequently released by the ECI on their website on 15 March 2024. It includes the details of all bonds encashed between 12 April 2019, and 24 January 2024. On 17 March 2024, the Election Commission unveiled data received directly from political parties and

4410-567: The Union budget and classification of plan and non-plan expenditure has been done away with starting from the year 2017 by Narendra Modi led Government of India . Finance Minister Arun Jaitley presented Finance Bill on 21 March 2017. He has suggested major overhaul in the bill. 40 changes have been suggested by him in the existing legislations. Some of the major changes are Political funding in India Political funding in India

4508-412: The ability to receive funds and enjoy the benefits of income tax exemption. In order to revoke this exemption, an amendment to the Income Tax Act would be necessary. Another issue of concern relates to the potentiality of these registered political parties assuming the role of "proxies" or "surrogates" for other well established political parties, engaging in informal alliances to acquire illicit funds or

4606-426: The accounts of voters in advance of an election. The pathway from Electoral Bonds to Aadhaar and bank account numbers, or even just UPI numbers, presents a potential conduit for untraceable funds from anonymous sources to anonymous voters. This development could ultimately undermine the integrity of democratic elections, rendering them neither "free" nor "fair." Retired Chief Election Commissioner V. S. Sampath said

4704-544: The address in Ahmedabad, whereas the registered office listed on the Election Commission website is situated in Sant Ravidas Ward, Sagar district of Madhya Pradesh. Interestingly, the audit report bears the countersignatures of three individuals who hold the positions of president, secretary, and treasurer. However, the identities of these individuals have not been disclosed. The audited profit and loss account for

4802-529: The banking system would mean the declaration of assets by political parties and also enable their traceability. Then Finance Minister Arun Jaitley argued that this reform of electoral bonds is expected to enhance transparency and accountability in the realm of political funding , while also preventing the creation of illegal funds for future generations. Jaitley, while defending the anonymity of bonds, argued that if donors were asked to disclose their identity, they would revert back to cash donations. The anonymity of

4900-517: The bank’s resources" but gave only the denomination-wise figures for the sale of all such bonds through the designated branches which did not match with information provided in another application. However, SBI’s first appellate authority (FAA), in July 2018, acknowledged the blunder that the previously given electoral bond sale data — 10 bonds of ₹100,000 denomination, 38 bonds of ₹10,00,000 and 9 bonds of ₹1,00,00,000 denomination, totaling ₹12.93 crore — for

4998-603: The bonds was also intended to protect the donors' privacy and shield them from potential harassment. On 28 January 2017, the finance ministry in a correspondence with the Reserve Bank of India (RBI) sought comments on the proposed amendments in The Finance Bill, 2017. The necessity of amendments to RBI Act was realized. Next day, on 30 January 2017, the RBI replied by expressing its severe apprehensions, contending that

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5096-444: The bonds, the Election Commission of India expressed concerns regarding the potential compromise of electoral transparency. This apprehension was echoed by various entities including the central bank, the law ministry, and several Members of Parliament, who contended that the electoral bonds would not effectively deter the influx of illicit funds into the political sphere. Notably, the ECI later altered its stance and extended support to

5194-401: The conditions for a legislation under consideration to be classified as a Money Bill. The provisions pertaining to electoral bonds fail to satisfy the criteria for classification as a Money Bill. The government's justification for this is that any component of the Budget, being a Money Bill, automatically fulfills the prerequisites for classification as such. A comparable instance of the misuse of

5292-563: The data obtained through the Right to Information (RTI) by Commodore Lokesh Batra (retired) for the 26th edition of bond sale conducted by the State Bank of India (SBI), it has been revealed that a total of 1,470 bonds were sold. Among these, 923 bonds accounting for 95.10% of the total, were of the denomination of ₹1 crore. Additionally, the SBI sold 468 bonds valued at ₹ one lakh each, 69 bonds valued at ₹ one lakh each, and 10 bonds valued at ₹10,000 each. Highest sales of bonds amounting to ₹335.30 crore

5390-413: The details of such donors are not available in the public domain. Association for Democratic Reforms (ADR) conducted a study in 2017 which found the total income of political parties in India between 2004–05 and 2014-15 was ₹11,367 crore and that 69% of income from donations below ₹20,000 given to political parties amounting to ₹7,833 crore came from unknown sources. Only 16 per cent of their total income

5488-446: The disclosure of information regarding the funding of political parties is not mandatory for voters and citizens. As per a notification dated 23 September 2021 released by the Election Commission, there exist eight National Parties and over 60 State Parties . It also recognizes and mentions an approximate count of 3,000 Registered Unrecognised Political Parties (RUPP) . RUPPs encompass newly established parties, those unable to attain

5586-522: The dismissal of the petition submitted by the left party, asserting that there is an absence of "invidious or arbitrary discrimination" and no infringement upon any fundamental rights of the Petitioner. The Election Commission of India submitted its views on the matter to the Supreme Court that the amendments in existing legislation, which permit the utilization of electoral bonds and eliminate

5684-407: The donations made. Further, government added that the introduction of electoral bonds will encourage donors to opt for the banking channel as a means of contributing, with their personal information being captured by the authorized issuing entity. Consequently, this measure will guarantee transparency, accountability, and serve as a significant stride towards electoral reform. The government requested

5782-512: The donor and the political party to which they were issued. In the event that the 15-day deadline was not met, neither the donor nor the receiving political party received a refund for the issued electoral bonds. Rather, the fund value of the electoral bond was remitted to the Prime Minister's National Relief Fund (PMNRF). The government capped cash donations to political parties at ₹2,000 . Enforcing donation amount exceeding ₹2,000 via

5880-470: The donor the opportunity to claim income tax exemption for the donated amount. As of 2023, tax evasion is a major concern among approximately 3,000 RUPPs in India. There were around 2,300 such parties in March 2019. Since the year 2001, there has been an increase of 300 percent in the number of RUPPs. Election Commission and the income tax authorities often report and take action against those found with "financial irregularities". During its verification drive,

5978-518: The donors of his political party comprise philanthropic entities, commercial enterprises, textile manufacturers, diamond traders, and real estate professionals. Jantawadi Congress Party located at Swadeshi Mills Road in Chunabhatti, Mumbai was also found in financial wrongdoings. The party witnessed a remarkable surge in its donation revenue from ₹2,000 in FY 2018–19 to ₹5.83 crore in the next FY 2019–20. Party president Santosh M. Katke resides at

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6076-437: The electoral authority. Furthermore, 253 political parties were declared inactive and subsequently removed from the list as they had not participated in any elections, either at the assembly or Lok Sabha level, during the years 2014 and 2019. These parties also neglected to respond to any correspondence or notices sent to them by the Election Commission. Overall, since May 2022, a total of 537 political parties have been delisted by

6174-693: The electoral bond scheme was susceptible to illicit financial activities, lack of transparency, and possible exploitation. HuffPost India reported that the government overlooked the RBI concerns and went ahead with its announcement during Budget Session in Parliament on 1 February 2017. Critics argued that these changes would allow any person, corporation, or interest group to now anonymously donate an unrestricted amount of funds to any political party, and that no citizen, journalist, or civil society representative would be able to establish any connections. Postponed from January 2018 and commencing on 1 March 2018,

6272-440: The electoral bonds after a year. Furthermore, the courts have postponed their verdict on the matter, thus leaving it unresolved. Those who oppose this scheme argue that the government has effectively enacted opacity through the implementation of electoral bonds. There can be a possibility of shell companies' accounts to serve as a means to facilitate contributions for favorable political parties. Opponents highlight that there exists

6370-449: The electoral bonds scheme, as well as amendments to the Representation of People Act , Companies Act and Income Tax Act , as unconstitutional. They found it "violative of RTI (Right to Information) " and of voters’ right to information about political funding under Article 19(1)(a) of the Constitution. They also pointed out that it "would lead to quid pro quo arrangements" between corporations and politicians. The State Bank of India

6468-465: The exact amount of money that political parties earn or possess. The appeal by Congress was seen as a move to portray itself as an honest party that is not getting enough funding from corporate companies and wealthy donors. The Congress-led UPA government faced allegations of involvement in major scandals during its previous tenure. While the INC saw dip in their revenues, BJP had seen doubling of its earning in

6566-498: The implementation of Electoral Bonds Scheme in 2018, contributions received through these bonds are also categorized as unknown sources of income. The aggregate revenue of eight national parties during the fiscal year 2021-22 amounted to ₹3,289 crore. Out of this sum, ₹781 crore was contributed by identified donors, while ₹336 crore originated from various known sources such as the sale of assets, membership fees, bank interest, sale of publications, and party levy, among others. Notably,

6664-614: The issuance of electoral bonds by banks for the purpose of political funding. Although introduced in early 2017, the Department of Economic Affairs in Ministry Of Finance notified the Electoral Bond Scheme 2018 in a Gazette only on 2 January 2018. According to an estimate, a total of 18,299 electoral bonds equivalent to a monetary value of ₹9,857 crore (98.57 billion) were successfully transacted during

6762-424: The lack of transparency in campaign financing. The introduction of Electoral Bonds has enabled companies to anonymously finance political parties without any limitations on the amount of donations. This development has been criticized by activists who argue that it grants corporations excessive influence and obfuscates the connections between politicians and business entities. The initial issuance of electoral bonds saw

6860-786: The legitimacy and accountability of this party's financial practices. Rajasthan's Shashakt Bharat Party is headquartered in Chittorgarh. Remarkably, within a year of its establishment in November 2019, the party received substantial sum of over ₹2.67 crore from a diverse pool of 159 donors located throughout the nation. It is worth noting that this period coincided with the onset of the COVID-19 pandemic in India , which undoubtedly presented unique challenges and circumstances. Records shows this Party allocated an amount exceeding ₹1.42 crore towards activities categorized as 'election/general propaganda' and additionally, an expenditure of over ₹97 lakh

6958-797: The non-governmental organization Association for Democratic Reforms , Common Cause (India) , (represented by Prashant Bhushan ) and the Communist Party of India (Marxist) , which contest the legality of the modifications made to the Reserve Bank of India Act, the Representation of the People Act, the Income Tax Act, the Companies Act, and the Foreign Contribution Regulation Act through the Finance Acts of 2016 and 2017. These amendments enabled

7056-463: The period spanning from March 2018 to April 2022. On 7 November 2022, the Electoral Bond scheme was amended to increase the sale days from 70 to 85 in a year where any assembly election may be scheduled. The decision on Electoral Bond (Amendment) Scheme, 2022 was taken shortly prior to the assembly elections in Gujarat and Himachal Pradesh, while the Model Code of Conduct was implemented in both

7154-472: The period. Meanwhile, the third biggest donor - Qwik Supply Chain - was accused of being a subsidiary of Reliance Industries , a charge Reliance denied. However, the company's registration details indicated a connection. The electoral bonds scheme has been subjected to legal challenge through a Public Interest Litigation (PIL) in the Supreme Court of India on two grounds. Firstly, it is argued that

7252-501: The political party successfully amassed a substantial sum of ₹25.44 crore. Tamil Nadu-based political party, Kongunadu Makkal Desia Katchi reported donations amounting to Rs22.64 lakh 2018–19. However, in the subsequent year, its income surged to ₹15.77 crore, primarily due to a donation of ₹15 crore from the Dravida Munnetra Kazhagam (DMK). The party had contested the 2019 Lok Sabha elections in alliance with

7350-461: The poll. The commencement of the clean-up initiative involved the authentication of information furnished by the parties, including their address and particulars of office-bearers, while also considering their electoral engagement or absence thereof. In May 2022, the Election Commission removed 87 non-existent RUPPs from its registry of registered parties, whose addresses were discovered to be fraudulent through either physical verification conducted by

7448-408: The purchasers of individual bonds and the recipients of the corresponding donations. This lack of transparency renders the bonds susceptible to being deemed "unconstitutional and problematic," as it hinders taxpayers and citizens from obtaining knowledge about the origins of these contributions. Moreover, according to some critics, it is argued that the anonymity of the bonds is not absolute since SBI ,

7546-489: The remaining five ( AIUDF , DMDK , JD(S) , PMK and Shiv Sena ) have submitted their report for 2014-15 but have failed to do so for 2015–16. A comprehensive study conducted by the Association for Democratic Reforms reveals that 69% of financial resources and contributions acquired by political parties during the period spanning from 2004–05 to 2014-15 originated from undisclosed origins. Income from "unknown sources"

7644-415: The remaining ₹2,172 crore, constituting 66% of the total income, was derived from unknown sources. Contributions or donations solely in the form of a bank cheque or digital payments to a registered (under Section 29B of the Representation of the People Act, 1951) political party, including electoral trust, in India during the financial year are eligible for deduction in taxable income under Section 80GGC of

7742-501: The respective chief electoral officers or through reports of undelivered letters or notices from the postal authority. In June 2022, a total of 111 registered political parties were removed from the list due to their failure to comply with the legal obligation of informing the Election Commission about their authentic communication address. Subsequently, in September 2022, an additional 86 non-existent political parties were delisted by

7840-442: The restriction on donations, including those from foreign origins, to political parties, would inevitably result in a surge in the utilization of illicit funds (black money) during the electoral process. Furthermore, this alteration would have profound consequences on the transparency of financial contributions to political parties, ultimately leading to the manipulation of Indian policies. The Constitution of India clearly specifies

7938-477: The revenue loss, there exists a potential risk of fund diversion and money laundering. A significant majority of the RUPPs failed to submit their contribution report for the fiscal year 2019–20, with a staggering 92 per cent of them being non-compliant. In the preceding fiscal year of 2018–19, a total of 199 RUPPs claimed income tax exemptions amounting to ₹445 crore. Subsequently, in the fiscal year 2019–20, 219 RUPPs claimed income tax exemptions worth ₹608 crore. It

8036-517: The same period. For the Financial Year 2021–22, ADR Annual Audit report revealed that the regional parties declared ₹887.55 crore as income from unknown sources which amounts to 75% of their net income. Only 12% (₹145.42 crore) of the total income (₹1165.576 crore) of the 27 regional parties was attributed to known sources. Electoral bonds contributed to 93.26% (₹827.76 crore) of the entire income from unknown sources. Also, ₹38.354 crore (4.32%)

8134-521: The same reference number. The Election Commission has raised concerns regarding the possibility that the two parties are under the control of the same group of individuals. Abdul Mabood, the party president of Apna Desh Party in Sultanpur (Uttar Pradesh) was investigated by tax authorities for receiving donations of nearly ₹100 crores and found that his associate Abdul B. Razak Pathan "misused" Mabood's PAN card without his knowledge . Razak established

8232-420: The scheme has resulted in a complete lack of transparency in political funding in India , thereby preventing the Election Commission and the citizens of the country from accessing crucial information regarding political contributions and parties' significant source of income. Secondly, it is contended that the passage of this scheme as a Money Bill, thereby circumventing the upper house of Parliament — Rajya Sabha,

8330-409: The state-owned bank maintains a comprehensive record of both the benefactor and the beneficiary. Consequently, this enables the ruling government to effortlessly obtain pertinent information and potentially exploit it in order to exert influence over donors. This practice has been deemed as conferring an unjust advantage upon the ruling party and the government. In 2017, upon the initial announcement of

8428-452: The state. Bhartiya National Janta Dal , a regional political party registered in Gujarat, received a donation of ₹1.47 lakh and ₹1.62 lakh in the fiscal years 2016-17 and 2017–18, respectively. In 2018–19, there was a significant increase in the donation which amounted to ₹4.32 crore. Notably, ₹4.23 crore was reported as being spent on "other charitable objects," without any accompanying details. This lack of transparency raises concerns about

8526-437: The states. Ahead of the 2019 General Elections , Congress announced its intention to eliminate electoral bonds, if the party is elected to power. The Communist Party of India (Marxist) has also opposed the scheme, and was the sole national party to refuse donations through electoral bonds. On 15 February 2024, a five-judge bench of the Supreme Court of India, headed by Chief Justice DY Chandrachud , unanimously struck down

8624-470: The utilization of electoral bonds. In his petition against the government's decision, CPI(M) leader Sitaram Yechury demanded for revocation of Electoral Bond Scheme and the called the issuance of electoral bonds and the Finance Act 2017, as "arbitrary" and "discriminatory". The government in its defense of its decision to introduce electoral bonds, asserted in Supreme Court that its primary objective

8722-472: The ₹2,000 limit still exist for donations in cash, there is an apprehension that political parties will hide a large portion of their illegal money in this category. The potential consequences of a political party in possession of both Electoral Bonds funds and the Aadhaar and Jan Dhan account numbers of voters are significant. The party could potentially engage in a " Direct Benefit Transfer " of funds into

8820-573: Was asked to hand over details of donors and recipients to the Election Commission of India by 6 March, and the ECI was to publish these online by 13 March. However, the SBI failed to submit the details by 6 March, and approached the Supreme Court asking for more time. The court turned down this request, following which the details were turned over to the ECI and published on their website. Electoral Bonds functioned like Promissory notes and interest-free banking tools. Any Indian citizen or organization registered in India could buy these bonds after fulfilling

8918-556: Was at Hyderabad branch, followed by the Kolkata branch with sales of ₹197.40 crore and the Mumbai branch with sales of ₹169.37 crore. The Chennai branch recorded sales of bonds worth ₹122 crore, while the Bengaluru branch sold bonds worth ₹46 crore. In terms of bond encashment, the New Delhi branch saw redemption of bonds valued at ₹565.79 crore. Subsequently, the Kolkata branch redeemed bonds worth ₹186.95 crore. 27th edition of bond sale

9016-564: Was dedicated to 'administrative costs'. Further in 2020–21, the Party had tremendously increased its financial resources, accumulating an impressive sum of over ₹6.9 crore. Out of this total, an amount of ₹4.31 crore was allocated towards 'election/general propaganda' activities. It is important to highlight that this financial allocation occurred despite the absence of any elections taking place in Rajasthan during this specific timeframe. During

9114-406: Was from the known donors. Bahujan Samaj Party (BSP) declared 100% of its income of ₹111.96 crore in 2014-15 from unknown sources. This was a 2,057% jump from its ₹5.19 crore income in 2004–05. Congress Party had the highest income of ₹3,982 crore among national parties while Bharatiya Janata Party (BJP) reported an income of ₹3,272.63 crore. Approximately 83% of the aggregate income received by

9212-402: Was from unknown sources whereas Shiromani Akali Dal (SAD) reported 86% (₹88.06 crore) of revenue from unknown sources. In 2018, the 133-year old Indian National Congress which ruled for 49 years of Independent India's 71 years history, for the first time made a public request for "small contribution" to its party fund which pointed to shortfall in party's income. It is impossible to determine

9310-420: Was garnered from sale of coupons while ₹21.293 crore (2.4%) was received by the regional parties in form of donations each amounting to less than ₹20,000. According the information given by 27 out of 54 recognized regional parties to Election Commission of India by May 2023, DMK received 96.01% (₹306.025 crore) of its total income (₹318.745 crore) from unknown sources. On 11 March 2024, the Supreme Court ordered

9408-539: Was held between 3 July and 12 July which saw 1,371 transactions worth ₹812.80 crore. The Hyderabad branch achieved the highest sales in bonds amounting to ₹266.72 crore, followed by the Kolkata branch with sales worth ₹143.20 crore, and the Mumbai branch with sales worth ₹135 crore. The Bengaluru branch recorded sales of bonds worth ₹46 crore. In terms of bond encashment, the Bhubaneswar branch saw highest redemption of electoral bonds valued at ₹155.50 crore. Subsequently,

9506-566: Was registered at the Naubasta police station in Kanpur. Bharatiya Rajnitik Vikalp Party was registered in Bihar's Bakhtiyarpur but all its financial transactions were carried out in Delhi NCR . This political party actively promotes the financial advantages of contributing and donating to its funds by highlighting the income tax exemption benefits associated with such donations. In 2019–20,

9604-494: Was to ensure increased accountability and promote electoral reforms as a means to combat the escalating threat of "black money" and to help nation's transitions towards a cashless and digital economy. Government said that the implementation of a restricted time-frame and a significantly brief period of maturity for electoral bonds reduces the likelihood of any potential misuse. The acquisition of these bonds by donors will be duly recorded in their financial statements, thereby reflecting

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