1.Electoral Trust Donation Surge (Electoral Funding)

What & Where
Electoral Trust = Sec 8 (old 25) not-for-profit company pooling disclosed donations for registered parties in India.
Must pass ≥95 % collections to eligible parties within same FY; donors’ identities mandatorily reported to ECI.
FY 2023-24 spike: Prudent Electoral Trust alone handled ₹1,075.7 cr after SC scrapped anonymous Electoral Bonds.
Quick Facts for MCQs
Legal & Policy
- SupremeCourt: Electoral Bond scheme violates Art 19(1)(a) right to information; bonds halted immediately.
- Income-tax Sec 17CA lists permissible donors: citizens, Indian companies, HUFs, firms, AOPs.
- Trust registration renewal compulsory every 3 years with ECI & CBDT oversight.
Funding Pattern FY 2023-24
- Donations through trusts nearly tripled YoY; corporates shifted post-bond ban.
- Concentration: Prudent + Triumph dominate trust inflows, reflecting top-donor centralisation.
- Recipient ranking: BJP » INC > BRS > YSRCP.
Transparency & Accountability
- Trust model publishes donor name, PAN, amount, beneficiary party—unlike bonds’ secrecy.
- Public disclosure curbs crony capitalism risk but doesn’t cap corporate sums.
- Only five active trusts limits competitive transparency landscape.
Reform Suggestions
- Indrajit Gupta panel: partial in-kind state funding for recognised parties only.
- Law Commission 1999 sought RPA sec 78A mandating audited, published party accounts.
- Proposed National Election Fund to pool all donations, allocate by vote-share, shielding donors.
Key Data Points
| Feature | Data-Point |
|---|---|
| First Trust Rules | CBDT scheme, 2013 |
| Governing Company Act Clause | Section 8, Companies Act 2013 |
| Compulsory payout ratio | ≥ 95 % within FY |
| No. of ECI-recognised trusts | 15 + (only 5 active FY24) |
| Largest trust FY24 | Prudent Electoral Trust |
| Amount received by Prudent | ₹1,075.71 crore |
| Share post-SC verdict (PET) | 74 % receipts after 15 Feb 2024 |
| Top recipient party | Bharatiya Janata Party |
| SC case ending Bonds | ADR v UoI, Feb 2024 |
| Anonymous funding via Bonds 2018-23 | ~₹12,000 crore |











