A comprehensive new report has delivered a scathing assessment of India’s political finance system, concluding that a lack of transparency, unlimited corporate funding, and the pervasive influence of money power are profoundly undermining the country’s democratic fabric.

The report, titled “Political Finance in India: Assessment and Recommendations,” was published in March 2026 by the Association for Democratic Reforms (ADR) in collaboration with the University of Melbourne’s Electoral Regulation Research Network. It provides a detailed analysis of the regulatory framework, funding sources, and campaign expenditures, drawing on two decades of data and key judicial interventions.

The report warns that financial dominance, rather than ideology or public service, has become the primary determinant of political success. “The idea of a vibrant democracy was upheld by the Supreme Court of India by observing ‘democracy would be vitiated if results were to be arrived at not on their merits but because money played a part in the bringing about of those decisions,'” the authors write, quoting a landmark 1958 case, highlighting that this principle is now under grave threat.

The Electoral Bonds Legacy: Institutionalized Opacity

A central focus of the report is the Electoral Bonds Scheme (2017), which it describes as a “turning point” that “institutionalized opacity.” The scheme, which allowed for unlimited and anonymous donations to political parties, was struck down by the Supreme Court in February 2024 for violating citizens’ “Right to Know.”

The report’s analysis of the now-public data shows the scheme’s profound impact. Between March 2018 and January 2024, political parties redeemed bonds worth over INR 164,925 million (approximately $1.98 billion USD). A staggering 50.6 per cent of this amount, INR 82,517.51 million, went to the incumbent Bharatiya Janata Party (BJP) . The report argues this created a severely uneven playing field, noting that the scheme allowed for “untraceable political financing from corporations, including loss-making or foreign-controlled entities.”

The Supreme Court’s judgment striking down the scheme is a key chapter in the report, which quotes the court’s firm stance: “The citizens’ right to know stems from this very right, as meaningfully exercising choice by voting requires information… the right to know is paramount for free and fair elections and democracy.”

A Flood of “Unknown” Money and Corporate Influence

Beyond electoral bonds, the report highlights the persistent problem of “unknown sources” of income for political parties. Since FY 2004-05, more than 64 per cent of funds collected by national parties came from sources donors do not have to be disclosed, such as donations below the reporting threshold of INR 20,000 and the sale of coupons. This loophole, the report argues, “undermines accountability and perpetuates corruption.”

Corporate funding has also become virtually limitless. The report notes that amendments in the Finance Act, 2017, removed the previous cap on corporate donations and the requirement to disclose beneficiary parties. The data shows a massive disparity in corporate funding, with the BJP receiving direct corporate donations four times greater than all other national parties combined.

This creates a dangerous nexus, the report warns. “Big corporations voluntarily fund political parties, especially the government in power, to essentially use their clout to shape laws, policies, regulations and contracts in their favor. This exchange between corporates and political parties comes at the cost of public interest.”

The report draws a direct line from opaque funding to the criminalization of politics. Analyzing the 2024 general election, it found that 93 per cent of the winners were millionaires, up from 58 per cent in 2009. A candidate with assets over INR 10 million had a 19.6 per cent chance of winning, compared to a mere 0.7 per cent for those with fewer assets.

Furthermore, the report confirms that “wealthy candidates (having criminal antecedents) are more likely to contest and win elections.” In the 2024 elections, 44 per cent of Congress candidates and 43 per cent of BJP candidates had declared criminal cases against themselves. “Parties’ search for rich candidates has also opened doors for criminalization of elections as a candidate with criminal antecedents is more likely to raise funds and afford the soaring costs of elections,” the report states.

Bribing the Voter: The Menace of Freebies

The report quantifies the massive scale of voter inducement. During the 2024 elections, the Election Commission of India (ECI) seized illicit items like cash, liquor, and drugs worth a staggering INR 88,890 million (approx. $1.07 billion USD) between March 1 and May 18 alone—a 155 per cent increase over total seizures in the 2019 elections. Drugs and narcotics alone accounted for 45 per cent of this amount.

The authors argue that this amounts to bribery, which is shaking “the very concept of ‘free and fair elections’.” They criticize the lack of follow-up on these seizures, noting that the Supreme Court has previously remarked that once elections are over, “nobody bothers.”

The report concludes with a comprehensive set of 11 recommendations, calling for a complete overhaul of the system. Key demands include enacting a comprehensive law to regulate political parties, bringing parties under the ambit of the Right to Information (RTI) Act, imposing strict limits on donations and party expenditure, and strengthening the Election Commission’s powers to de-register non-compliant parties.

“There is no dearth of solutions,” the report asserts. “What is required is courage and will to reform the existing system… The only way to remedy the existing problems in political finance is to immediately act upon the plausible solutions offered by the judiciary, constitutional bodies, committees, civil society, and citizens.”