History of Corporate Funding in India
- Corporate funding has been allowed in India since the first general election.
- In 1969, the GoI imposed a complete ban on corporate funding to break the nexus between politics and businesses.
- The Rajiv Gandhi government lifted the ban on corporate funding in 1985. However, it limits the funding to up to 5 per cent of a company’s average net profits.
- In 2013, the Government of India permitted corporate donations of up to 7.5% of the average net profits of the last three years.
- The 2017 Finance Act removed the earlier limit of 7.5%. It also allowed foreign companies registered in India to make political donations.
Need for Corporate Funding
- Corporate Funding is important to provide a level playing field to all political parties — big, small, old, and new.
- It can provide essential financial resources to political parties, enabling them to carry out their campaign activities, advertise their platforms, and reach a broader audience.
Issues of Corporate Funding
- Corporate funding influences the decisions of the government and compromises the democratic process.
- Excessive reliance on corporate funding can turn political and democratic processes into a plutocracy.
- Plutocracy refers to a system of governance where the wealthy class holds significant influence and power over society and its political processes.
|
|