Political Funding


A petition was filed in the Supreme Court under Article 32 of the Indian Constitution, challenging the numerous amendments made to Companies Act, Income Tax Act, Representation of People’s Act, Foreign Contribution Regulations Act, Reserve Bank of India Act, through Finance Act 2016 and Finance Act 2017. The said petition was filed on behalf of Association of Democratic Reforms (ADR) and Centre for Public Interest Litigation (CPIL), through advocates Prashant Bhushan and Neha Rathi.

The petitioners contested that the aforesaid Amendments allowed unlimited corporate donations to various political parties and anonymous financial support by Indian and Foreign Companies. The immediate consequence being that there is no limitation on campaign donations by companies and it legalizes anonymous donations. They also requested that political parties shouldn’t be allowed to accept donations in cash.

The Finance Act, 2017, which was enacted as a money bill has introduced a system of electoral bonds, that can be issued by any scheduled bank with the purpose of electoral funding, these are exempted from disclosure to the ECI and intermittently would “affect electoral transparency and encourage corrupt practices in politics”. Removal of the statutory ceiling of 7.5 per cent of average profits on donation to political parties now enables even loss-making companies to make donations of any amount to political parties out of their capital or reserves.

There have been various similar amendments that can hamper with the transparency maintained in political campaigns and elections.

Such amendments makes us question the main agenda of our government as on one hand it talks about eradicating the corruption from its roots and on other hand it passes such amendment bills that are very much likely to contribute to corruption and jeopardizing the integrity of world’s largest democracy.

The Supreme Court Bench comprising of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud on Tuesday (03/10/17) issued notices to the Centre and Election Commission of India regarding the petition and asked for their response on the matter.


By-Neha Bargotra , Student Reporter -INBA


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