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Electoral trust declares donation of Rs 3 crore through electoral bonds

Topics Covered: RPA related issues.

Electoral trust declares donation of Rs 3 crore through electoral bonds:


Paribartan Electoral Trust has anonymously disbursed Rs 3 crore it received from Birla Corporation in 2019-20 using electoral bonds.

This is the first time that an electoral trust has taken the bonds route to disburse corporate donations to unnamed political parties.

  • However, Association for Democratic Reforms (ADR), an independent poll watchdog, has alleged that the use of electrical bonds route is “against the spirit” of the Electoral Trusts Scheme, 2013 and Income Tax Rules, 1962.

What’s the issue now?

It is mandatory for trusts to furnish each and every detail about the donor contributing to the trust and to whom the donations have been distributed.

  • But, Paribartan Electoral Trust has said that since the donation was made through electoral bonds, in terms of the electoral bonds scheme, “information with regard to payee is not required to be disclosed”.

The Concern:

So the main concern now is that if Electoral trusts start adopting this precedent of donating through bonds, which do not permit disclosure norms and discourage transparency rules/laws then it is like going back in time before the Electoral Trusts Scheme, 2013 was incorporated.

  • In such a scenario, it will be a complete mayhem of unfair practices i.e. total anonymity, unchecked and unlimited funding, free flow of black money circulation, corruption, foreign funding, corporate donations and related conflict of interest etc.
  • Such a practice completely negates the very purpose behind the inception of the Electoral Trusts Scheme, 2013 and Rule 17CA of the I.T Rules, 1962.

About Electoral Trusts Scheme, 2013:

  1. Electoral Trust is a non-profit organization formed in India for orderly receiving of the contributions from any person.
  2. The scheme was notified by the Central Board of Direct Taxes (CBDT).
  3. Objectives of the Scheme: To lay down a procedure for grant of approval to an electoral trust which will receive voluntary contributions and distribute the same to the political parties.
  4. The sole object of the electoral trust is to distribute the contributions received by it to the political party, registered under section 29A of the Representation of the People Act, 1951.
  5. These Electoral Trust companies are not allowed to accept contributions from foreign citizens or companies.
  6. The trust shall also maintain a list of persons from whom contributions have been received and to whom the same have been distributed.

The electoral trust may receive voluntary contributions from:

  1. An individual who is a citizen of India.
  2. A company which is registered in India.
  3. a firm or Hindu undivided family or an Association of persons or a body of individuals, resident in India.


Insta Curious: 

Similar concept of political financing (especially in USA): Do you know what Hard Money & Soft Money is? Read Here



Prelims Link:

  1. What are electoral bonds?
  2. Eligibility.
  3. Denomination.
  4. Features.
  5. Who can issue these bonds?
  6. About Electoral Trust scheme.

Mains Link:

Critically examine the effectiveness of electoral bonds in ensuring transparent political funding and suggest alternatives?

Sources: the Hindu.