The recent Annual Report on contributions received by Electoral Trusts, released by the Election Commission, highlighted that incumbent parties received a larger share of political funding.
Issues in Political Funding/Financing
Political Funding Mechanisms in India
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- Lack of transparency and Anonymity: Between the financial years 2004-05 and 2022-23, the country’s six national parties collected ₹19,083.08 crore from unknown sources. (Association for Democratic Reforms (ADR))
- Unequal Playing Field: Absence of legal limits on political parties' election expenditure, favors parties with vast financial prowess creating barriers for weaker parties
- Corporate Influence and Cronyism: Present political funding in India relies largely on corporates leading to policies to serve private interests
- The Supreme Court in Electoral Bond case (2024) called this quid pro quo an instance of institutionalised corruption.
Way Forward
- Promote Public Funding: State funding may reduce disparities in financial resources among political parties (Indrajit Gupta Committee, 1998).
- Establishing a national election fund: Individuals and companies should channel their donations through a common fund, which can then be allocated to political parties fairly and transparently.
- Limit on Campaigning Expenditure: A limit on campaigning expenditure may be placed so that parties can contest without worrying about too much poll expenses.
