ADR Report on Political Funding in India (FY 2024-25)

Source: Mint | Date: April 2, 2026 

The Association for Democratic Reforms (ADR) has released a damning report on political donations for FY 2024-25, revealing patterns that go well beyond mere accounting — they speak to the structural health of Indian democracy itself.

The Numbers That Demand Attention

The headline figures are stark. Total donations to national parties surged 161% to Rs 6,648 crore, with the BJP alone receiving Rs 6,074 crore; a 171% jump from the previous year. That one party commands over 91% of declared funding is not just a political statistic; it is a governance red flag.

Even more telling is the corporate stranglehold: 92.18% of all donations came from businesses, while individual citizens contributed a mere 7.61%. This inversion; where corporations, not voters, are the primary financial constituency of political parties — fundamentally distorts the democratic contract.

The Post-Electoral Bond Paradox

This report arrives in a particularly significant context. The Supreme Court struck down the Electoral Bond Scheme in 2024 precisely to restore transparency. The Court ruled in Association for Democratic Reforms v. Union of India that anonymous funding violated voters' right to information under Article 19(1)(a).

Yet the post-bond landscape reveals an uncomfortable truth: banning opacity is not the same as creating transparency. Funding has simply migrated back to Electoral Trusts; with Prudent Electoral Trust alone channeling Rs 2,413 crore — and direct corporate donations. The intermediary has changed; the concentration of influence has not.

This is the central paradox of the current moment: the legal architecture improved, but the political economy remained unchanged.

Three Structural Problems the Report Exposes

1. The Concentration Problem When 91% of national party funding flows to one party, it does not merely reflect electoral popularity — it shapes it. Corporates rationally donate to the party most likely to form government, creating a self-reinforcing cycle where financial dominance and political dominance feed each other. This is precisely what the Supreme Court warned could become "institutionalised corruption."
2. The Shell Company Loophole The Finance Act 2017 removed the 7.5% profit cap on corporate donations and eliminated the requirement to name recipient parties in Profit & Loss accounts. This means loss-making companies — potentially shell entities — can donate unlimited sums with minimal scrutiny. Until this is reversed, the door for money laundering through political funding remains wide open.
3. The ECI Enforcement Gap The Election Commission receives these reports but has no statutory power to de-register parties for financial non-compliance. It is an auditor without enforcement authority — a watchdog that can bark but not bite. The IEMS (Integrated Election Management System) digitises reporting, but digitising non-compliance does not address it.

What BSP's "Zero Declaration" Tells Us

The BSP's 19-year streak of declaring nil donations above Rs 20,000 is not a sign of financial purity — it is a sign of a disclosure architecture with serious gaps. Large parties can legally receive donations below the reporting threshold in ways that aggregate to significant sums. The current Rs 20,000 threshold is easily gamed by splitting donations, which is why lowering it to Rs 2,000 (aligning with the non-cash payment threshold) is a necessary reform.

The Reform Agenda: What Is Politically Feasible vs. Necessary

The uncomfortable reality is that the parties with the power to legislate these reforms are the primary beneficiaries of the current opaque system — creating a classic collective action problem in democratic reform.

The Bigger Democratic Question

India's democracy faces a structural tension that this report makes visible: electoral legitimacy is built on voter mandates, but electoral outcomes are increasingly shaped by financial muscle. When voters cast their ballots, they may not know that the candidate's campaign was underwritten by a conglomerate with regulatory interests before that very government.

The Supreme Court recognised this when it said the voter's right to information is foundational. But court rulings create legal obligations, not political will. The ADR report is valuable precisely because it converts abstract concerns about "corporate influence" into concrete, auditable numbers — and numbers are harder to dismiss than principles.

Conclusion

The ADR report is not merely a financial document; it is a stress test of democratic accountability. The 161% surge in donations, the 91% concentration in one party, and the near-total dominance of corporate money collectively suggest that India's political funding ecosystem rewards incumbency, penalises competition, and insulates decision-makers from genuine public scrutiny.

Reforms like ECI empowerment, independent auditing, and expenditure ceilings are not radical demands; they are the minimum infrastructure of a functional democracy. The question is whether those who benefit most from the current system will ever have the incentive to change it.