What are electoral trusts? Here's how BJP got richer by 50% despite SC striking down electoral bonds

The BJP’s corpus is almost 12 times bigger than Congress’s at Rs 522.13 crore in 2024-25.

Despite the Supreme Court scrapping the electoral bond scheme last year, the BJP recorded its highest-ever donations in 2024-25, raising Rs 6,088 crore via electoral trusts.

According to its latest Contribution Report, it is an increase of more than 50 per cent from the Rs 3,967 crore it received in 2023-24. Taken together, the donations received by a dozen Opposition parties, including the Congress, came to Rs 1,343 crore.

The BJP’s corpus is almost 12 times bigger than Congress’s at Rs 522.13 crore in 2024-25.

According to Indian Express, electoral trusts donated Rs 3,744 crore to the BJP in 2024–25. This made up 61% of the total funds it received. The remaining Rs 2,344 crore came from other sources, such as individual donors and companies.

What is electoral trust?

It is a body registered under the Companies Act, 1956, solely tasked with distributing contributions received from individuals or companies to political parties. Electoral trusts were set up under the Electoral Trusts Scheme, 2013 with the Centre framing rules for the eligibility and procedure for registering such trusts on January 31, 2013.

An electoral trust is allowed to receive voluntary contributions from individual Indian citizens, a company registered in India, a firm, or Hindu undivided family (HUF) in the form of a cheque, bank draft or electronic transfer to its bank account. No foreign entity, other registered electoral trusts, or individuals who are neither citizens nor residents of India can contribute to electoral trusts.

What is an electoral bond?

The now-scrapped electoral bond, which was introduced with the Finance Bill in 2017, is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.

The citizen or corporation can then donate the same to any eligible political party of his/her choice. The bonds are like bank notes that are payable to the bearer on demand and are free of interest. An individual or party will be allowed to purchase these bonds digitally or through cheque.

Key difference between electoral trust and bond

In case of electoral trusts, the route is transparent regarding contributors and beneficiaries. There is only one contributor and one beneficiary of a particular trust. Hence, the public can know who is funding whom.

On the other hand, electoral bonds were exempt from disclosure requirements. Parties inform the Election Commission of the aggregate donations received. However, there are no details of the donors, which they are required to do in case of donations in cash or by cheque or bank transactions over Rs 20,000 each.

Who are BJP’s top donors?

Apart from electoral trusts, several companies were among the BJP’s top 30 donors in 2024–25. The biggest contributors included Serum Institute of India Pvt Ltd, which donated Rs 100 crore, followed by Rungta Sons Private Limited with Rs 95 crore and Vedanta Limited with Rs 67 crore.

Why do corporates prefer electoral trusts?

After the Supreme Court struck down electoral bonds, electoral trusts emerged as the most credible alternative. Electoral trusts require full disclosure of donors and beneficiaries and this aligns with corporate governance norms while keeping funding within a formal framework.

Also, contributions to registered electoral trusts qualify for 100% tax deduction under Section 80GGB, offering the same tax benefit as direct party donations but with more compliance comfort.