• UGI USER
  • Apr 05, 2024
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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).

Source: https://www.thehindu.com/data/55-firms-electoral-bond-purchases-topped-the-original-75-cap-in-2022-24-69-of-their-total-donations-went-to-bjp-data/article68031081.ece#:~:text=Fifty%2Dfive%20of%20these%20companies,donation%20of%20Rs.%201%2C993%20crore.