1-2 DECEMBER 2023

by | Dec 4, 2023

Crucial Role of Transparent Political Funding

Amidst the ongoing legal debates surrounding electoral bonds in India, the issue of transparency in political funding emerges as a critical focal point. The resolution of this challenge holds immense significance for the democratic fabric and rule of law in the country. Navigating this intricate landscape prompts an exploration of global perspectives on political funding regulations, highlighting their pivotal role in upholding the essence of democracy.


Aspect Political Funding in India
Definition Financial contributions made to political parties for various purposes.
Legal Provisions
  • Sources: Political parties can receive funds from individuals, companies, electoral trusts, and unions.
  • Disclosure: Parties are required to disclose contributions exceeding a specified limit. 
  • Anonymous Contributions: Prohibited above a specified limit.
  • Electoral Trusts: Introduced for anonymous contributions with conditions.
  • Corporate Donations: Companies can contribute, but with limits and disclosures.
  • Foreign Contributions: Prohibited under the Foreign Contribution (Regulation) Act.
Electoral Bonds Introduced as a means of transparent political funding, allowing donors to purchase bonds and contribute to political parties. Concerns: Criticized for potential anonymity and its impact on transparency.
Election Commission’s Role Regulates and monitors political funding. Scrutiny: Verifies party accounts, examines declarations, and ensures compliance with guidelines.
Supreme Court’s Observations
  • Transparency: Emphasizes the need for transparency in political funding.
  • Electoral Bonds: Expressed concerns about anonymity, questioned the impact on free and fair elections.
  • Reforms: Suggested reforms to ensure clean and transparent funding, including stricter scrutiny of political parties’ financial dealings.
  • Lack of full transparency despite existing regulations.
  • Potential misuse of electoral bonds for undisclosed and unlimited donations.
  • Difficulty in tracking funding sources and ensuring compliance.
  • Calls for more comprehensive reforms to address loopholes.
Constitutional Framework
  • Article 19(1)(c): Freedom to form associations or unions, including political parties.
  • Article 324: Election Commission’s powers to supervise elections, including monitoring political funding.
  • Article 105: Privileges and immunities of members of Parliament concerning freedom of speech and voting.
  • Laws like Representation of the People Act, 1951: Governs elections and includes provisions related to political funding.
Legal Framework
  • Income Tax Act: Contains provisions regarding tax exemptions and disclosures for political parties.
  • FCRA (Foreign Contribution Regulation Act): Prohibits political parties from accepting foreign contributions.
  • RPA (Representation of the People Act): Governs the conduct of elections and includes provisions on political funding.
  • Companies Act: Regulates corporate donations to political parties.


Global Standards on Political Funding Transparency

In the realm of political funding, a fundamental principle resonates universally – transparency. The belief that citizens have the right to know the financial supporters of political entities forms the cornerstone of a robust democratic process.

United States: A Historical Precedent

As early as 1910, the United States enacted the Publicity Act, mandating the disclosure of all political contributions. The U.S. Supreme Court, in the landmark case of Buckley v. Valeo (1976), not only upheld the requirement for public disclosure but also endorsed limits on political contributions. The court recognized the potential erosion of confidence in the political system when large, undisclosed contributions are involved, emphasizing the importance of both disclosure and contribution limits.

European Union: Striking a Balance

In 2014, the European Union implemented regulations limiting the value of donations political entities could accept per year and per donor. While smaller donations could remain anonymous, larger contributions necessitated full disclosure. The EU’s approach exemplifies the delicate balance between protecting donor privacy and ensuring transparency in political financing.

United Kingdom: Restrictions and Declarations

The U.K., through the Political Parties, Elections and Referendums Act 2000, imposes restrictions on political party donations and loans. Donors above a certain threshold must be declared, reinforcing the global consensus on the need for transparency.

The Indian Scenario: Electoral Bonds and the Challenge Ahead

Contrary to this global trend, recent amendments to India’s Representation of the People Act 1951 introduced electoral bonds with complete donor anonymity. This departure from international norms raises concerns about the transparency of political funding in the country.

Importance of Disclosure

Transparent accounts are the linchpin of preserving citizens’ trust in political entities. In a representative democracy, political parties serve as the pillars, and public disclosure becomes vital to maintaining the rule of law and eradicating corruption from the electoral process.

Limiting Donations to Safeguard Democracy

The imposition of limits on political donations acts as a safeguard against the undue influence of wealth in politics. Democracy should not be swayed by financial prowess, and the separation of wealth from power is foundational to a democratic system.

The Road Ahead: Towards Electoral Justice and Democracy

While challenging the constitutionality of electoral bonds is crucial, it’s equally imperative to look beyond and establish a comprehensive legal framework for political funding. The path to a healthy democracy necessitates:

  • Public Disclosure Laws: Mandating the public disclosure of donors’ identities above a certain nominal limit.
  • Immediate Reporting: Requiring immediate reporting of significant donations to the election commission.
  • Auditing Mechanisms: Implementing independent audits of political party accounts to ensure financial transparency.
  • Enforcement: Establishing robust mechanisms for enforcing these laws to guarantee accountability.

Strengthening Democracy Through Transparency

In the pursuit of electoral justice, it is not enough to merely deem electoral bonds unconstitutional. India must chart a course toward a robust legal framework that regulates political party funding and champions public disclosure. Only through such comprehensive measures can democracy be fortified, ensuring that the democratic process remains transparent, fair, and free from the undue influence of undisclosed financial contributions.

Source: The Hindu

Hubble Space Telescope:

  1. Activation of Safe Mode (November 23, 2023):
    1. Hubble automatically entered safe mode due to a malfunctioning gyroscope, temporarily halting its operations.
  1. Launch and Inception (April 24, 1990):
    1. Launched aboard the Space Shuttle Discovery, Hubble has served as a space-based observatory for over three decades.
  1. Collaboration Between NASA and ESA:
    1. A joint venture between NASA and the European Space Agency (ESA), symbolizing global cooperation in space exploration.
  1. Orbital Altitude and Ingenious Design:
    1. Orbits at approximately 340 miles above Earth, boasting the distinction of being the first observatory designed for in-orbit servicing.
  1. Capture Across the Spectrum:
    1. Proficient in recording images in ultraviolet, visible, and near-infrared wavelengths, facilitating a comprehensive exploration of the universe.
  1. Landmark Servicing Missions:
    1. Demonstrating adaptability and longevity, Hubble’s successful servicing missions ensure its sustained functionality and relevance.
  1. Over 1.5 Million Observations:
    1. Hubble’s expansive portfolio includes over 1.5 million observations, significantly advancing our understanding of the cosmos.
  1. Revolutionizing Astronomical Understanding:
    1. Pivotal in providing astronomers with groundbreaking views and data, transforming our comprehension of distant celestial bodies.
  1. Temporary Operational Pause and Gyroscope Challenge:
    1. Current operational pause attributed to a malfunctioning gyroscope, highlighting the complexities of maintaining aging yet invaluable space instruments.
  1. Legacy of Human Ingenuity:
    1. Hubble’s odyssey stands as a testament to human innovation, underscoring the enduring spirit of exploration as the space community addresses the current setback.

Written By Vishakha Khatri

My name is Vishakha Khatri. I am an engineering graduate and a civil service aspirant with a passion for spreading knowledge about Indian polity. I believe that understanding our political system is crucial for every citizen, and I am committed to making this information accessible to everyone in my own easy way. Through my experiences in civil service preparation and my unique perspective as an engineering graduate, I hope to inspire and educate others on the importance of Indian polity.

Related Posts



In a groundbreaking decision, a 5-judge Constitution Bench of the Supreme Court has recently ruled against the Electoral Bond Scheme, emphasizing its...



India's Republic Day Parade In a transformative stride aimed at quelling controversies and championing equitable representation, the Defence Ministry has...



Ayodhya Dispute carries a very special cultural and religious reverence in India, marked not only by devotion but also beset with legal complications....

19th DECEMBER, 2023

19th DECEMBER, 2023

National Geoscience Data Repository (NGDR) Portal Launch Date and Venue: The NGDR Portal is scheduled to launch on 19th December 2023 in New Delhi. The launch...