55 FIRMS SURPASSED THE DONATION CAP, CONTRIBUTING HEAVILY TO THE RULING PARTY.
Why in the news?
Supreme Court’s verdict on electoral bonds revealed 55 firms exceeded donation cap, contributing ₹1,377.9 crore to ruling BJP.
source:slideserve
Analysis of Electoral Bond Donations:
Following the verdict, an analysis was conducted on electoral bond data from 385 companies.
Donations totaled ₹5,362.2 crore, primarily directed towards the ruling BJP.
Out of these, 55 companies exceeded the original 7.5% cap on corporate donations in the financial years 2022-23 and 2023-24.
These excess donations amounted to ₹1,377.9 crore, constituting over 69% of their total contributions of ₹1,993 crore. Notably, the BJP received nearly 71% of these donations.
What are Electoral Bonds?
Electoral Bonds: Monetary instruments akin to promissory notes purchasable by companies and individuals from the State Bank of India (SBI).
Scheme Launch: Introduced in 2018 to enhance transparency in political funding.
Amendments (2022):
Additional 15-day Period: During general elections to Legislative Assembly and Union territories with Legislature.
Validity: Bonds valid for 15 days from issuance; no payment if deposited after expiry; immediate credit upon deposit.
Understanding Political Funding:
Definition: Political funding refers to the methods employed by political parties to raise finances for their campaigns and day-to-day operations.
Statutory Provisions:
Representation of the People Act (RPA):
Section 29B: Allows parties to accept voluntary contributions from individuals or non-Government companies.
Section 29C: Mandates parties to disclose donations exceeding ₹20,000. Failure to report timely results in loss of tax relief under the Income Tax Act, 1961, enforced by the Election Commission (EC).