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A man giving money to a woman (representative image), VOA

New Delhi, Feb 9, 2017: Political funding is an organized process of raising funds through the system of contribution. Political parties collect their funds from sources such as:

  • Members of a political party contribute to their party’s funds either personally or mobilize raising fund raising from, other sources.
  • People supporting a party’s ideology also can help it in building financial structures.
  • Corporations which vision their growth and diversification along with certain party’s success also donate their share.

This is done to ensure the smooth running of party’s routine activities. These daily activities include campaigning, promoting their agendas and for other political purposes.


Therefore, political funding is an essential part and parcel of any democracy.

Common people can participate in the political affairs of the country by supporting through contributing financially.

Financial contribution may enable them to ascertain changes in the party structure.

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The money collected influences the party’s extend to function and implement specific programs.

The most preferred and popular party generally receives the majority of funds and the least popular one faces shortage.

The guiding principle of democracy which is ‘For the people, by the people and of the people’ finds relevance in relation with political funding also.

But the impact of public funding is just like that of industrialization. While, industrialization has benefited the nation’s economy, it has also made poor people poorer deserting hand-made industries.

Similarly, while advocating for democracy, funding has also harvested corruption.

When the funding is unregulated and from unknown sources, then a political party becomes a fertile ground for corruption. The vested interest would definitely want to intrude all the aspects of a political party, right from policies to selection of candidates and then financial benefits post government formation at state and Central level both.

The worst part is, that political parties can violate their promises after owning all the raised funds!

Earlier parties were not required to give any account for the contributions which were below 20,000 rupees. But every rule brings with itself an alternative. Individual funds were then divided into numerous blocks and each amounting to 20,000 rupees to keep the sources ‘unknown’ and thus turning all the blackmoney into white.

Finance Minister Arun Jaitley in the Union Budget for 2017-18. reduced the limit of fund collection from anonymous sources to 2,000. Now political parties will receive donations either through cheques or digitally above Rs. 2000.

Moreover, they also have to detail their donations in income tax returns.

“Reducing the cash funding of political parties to one-tenth of what it used to be and the introduction of electoral bonds are two significant steps in curbing corruption,” said A.K. Verma, a Kanpur-based political analyst.

In India, currently no political party is an ideal party as far as financial transparency is concerned.

Every party is indulging in corruption with regards to funding process.

The Aam Aadmi Party which claims to be the champions of transparency have now turned opaque. With removal of donors list and balance sheets from its website, AAP now is characterized by opaqueness and murky politics.

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The campaign ‘nolistnodonation’ (http://www.nolistnodonation.com/) is also struggling for the restoration of transparency in the Aam Aadmi Party. The campaign is directed towards reminding AAP of its initial basic guiding principles that were anti-corruption, clean politics and democratic socialism. It is demanding AAP to make its donation list public and practice ‘clean politics’.

-prepared by Himanshi Goyal of NewsGram


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