Corporate Political Funding in India: An Empirical Study about Corporate Donations, Foreign Donations & Electoral Bonds
Sandeep Khakase*
Arshad Bhat
India has distinct laws and regulations that govern and direct corporate charities or donations to political parties including foreign donations. The Companies Act, 2013, the Income Tax Act, 1961 and Foreign Contribution (Regulation) Act, 2010, inter alia, regulates donations to political parties. In the last decade, India has witnessed several amendments pertaining to corporate’s political funding have raised many questions, mainly after the Supreme Court judgment of Feb 15, 2024 striking down the Electoral Bonds Scheme. This literature review, legal analysis and empirical research based paper, intended to address issues related to corporate donations, foreign funding to political parties and Electoral Bonds. It is an attempt to understand why companies donate to political parties, is there any need to limit donations. It also aimed to check the validity of the Electoral Bonds and influence of foreign donations to Indian political parties on the Indian political autonomy. It is concluded that the companies are incorporated to make profits and hence there should be a limit on donations and such donations should be decided by shareholders and not by the directors. Foreign funding may influence political autonomy and policy making, hence it should be restricted. The Electoral Bond Scheme, being opaque, should be removed. This paper aimed to help governments and its legislative members in making laws and policies using the limited evidences collected by a survey of 100 Respondents in India in 2020 about Indian laws related to corporate’s political funding, although it addresses a global concern about political donation.
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