The revelation of political donors in India, previously shielded under an opaque electoral funding system that has since been abolished, has sparked uproar in the country. It has come to light that some of the major contributors were under investigation by federal agencies.

The Bharatiya Janata Party (BJP), led by Prime Minister Narendra Modi, is encountering criticism from opposition leaders who allege that the government received corporate kickbacks to finance the BJP’s election campaign. India’s extensive general election is scheduled to commence next month.

The party led by Mr. Modi, the largest recipient by a significant margin, garnered more than Rs 60 billion (£578 million), constituting half of all “electoral bonds” donated by individuals and corporations since 2018.

The nation’s second-largest opposition party, the Trinamool Congress, unexpectedly secured the second position on the list with bonds valued at Rs 16 billion. In contrast, the primary opposition party, Congress, trailed in third place with Rs 14 billion.

The Election Commission made the donors’ information public following a Supreme Court order on Monday, just days before the announcement of a national election. The electoral funding mechanism, known as electoral bonds, was introduced by Mr. Modi’s government during his first term in 2017. It permitted companies and individuals to donate unlimited amounts anonymously to political parties.

In a significant move last month, the Supreme Court deemed electoral bonds “unconstitutional” and banned them, following challenges from opposition lawmakers and a civil society group. They argued that electoral bonds impeded the public’s right to know the sources of funding for political parties.

Under this system, individuals or companies could purchase bonds from the government-owned State Bank of India and contribute them to a political party without publicly disclosing the source of the funding.

Under this system, individuals or companies could purchase bonds from the government-owned State Bank of India and contribute them to a political party without publicly disclosing the source of the funding.

The choice to eliminate the funding system was perceived as a setback for the BJP and other major political parties, especially since it preceded the upcoming national election scheduled for May. The complete election timetable is expected to be announced on Saturday.

Nonetheless, the data released on Thursday was deemed incomplete as it lacked information linking each donor to the specific party they donated to. The Supreme Court instructed the State Bank of India to release additional data that would accurately match each donation with its recipient party.

As per the data unveiled on Thursday, three out of the top five buyers of electoral bonds, namely lottery company Future Gaming, infrastructure firm Megha Engineering, and mining giant Vedanta, are under investigation by the government’s financial crimes agency, the Enforcement Directorate, and the Income Tax Department.

Future Gaming and Hotels Pvt Ltd, led by businessman Santiago Martin, has been under investigation by the Enforcement Directorate (ED) since 2019 on suspicions of money laundering. Despite the ongoing investigation, the lottery company purchased electoral bonds valued at Rs13.68 billion (£129 million) in 2020, just months after the probe commenced.

Mr. Martin, widely recognized as the “Lottery King” of India, has consistently been India’s highest-income taxpayer for numerous years, as stated on the firm’s website.

The second-largest contributor to political parties is Megha Engineering and Infrastructures Ltd (MEIL), which purchased electoral bonds totaling Rs10 billion (£94 million) between 2019 and 2024. Interestingly, its initial bond purchase occurred just months after an Income Tax department raid in October 2019.

Megha Engineering and Infrastructures Ltd (MEIL) has subsequently secured significant government projects, as reported by Quint, including a Rs 45 billion (£426 million) tunneling contract for the prestigious Zojila project in Jammu & Kashmir and a Rs 5 billion (£47 million) order from the country’s defense ministry, based on press statements from the group.

Vedanta, a mining company, attracted the attention of the Enforcement Directorate (ED) due to its alleged connection to a bribe-for-visa case involving a Chinese national in 2018. Additionally, the metals and mining conglomerate, helmed by billionaire Anil Agarwal, is under investigation for potential money laundering activities. Despite these issues, Vedanta Ltd acquired bonds worth over Rs 4 billion (£37 million) just a few months later, in April 2019.

Accusing the government of accepting kickbacks, the Congress party asserted that the disclosed data revealed the “corrupt tactics” of the BJP. Congress General Secretary Jairam Ramesh wrote on X, highlighting that over 1,300 companies and individuals have donated electoral bonds, amounting to over Rs 6,000 crore (£567 million), to the BJP since 2019. He alleged a pattern of “quid pro quo”.

He alleged that the data revealed a distinct pattern of the BJP “strong-arming” companies. According to his claims, the BJP first targeted these companies through investigations conducted by the Enforcement Directorate (ED), the Income Tax Department, and the Central Bureau of Investigation. Subsequently, they purportedly demanded “donations for the company’s protection”.

Finance Minister Nirmala Sitharaman dismissed the allegations as mere “assumptions.”

“I think you’ve based yourself on huge assumptions, that the money was given after the Enforcement Directorate raid happened,” she stated.

“What if the companies gave the money, and afterward, we still conducted investigations through the Enforcement Directorate? That’s an assumption that the Enforcement Directorate initiated inquiries, and the companies, wanting to safeguard themselves, then provided the funds,” remarked the finance minister.

“The second assumption in that itself is, are you sure they gave it to the BJP? They probably gave it to the regional parties,” she said.

In conclusion, the disclosure of political donors in India under the now-scrapped electoral funding system has ignited controversy, especially because it revealed that pinnacle funders had been below research by federal groups. The governing Bharatiya Janata Party (BJP), led by Prime Minister Narendra Modi, has faced backlash from competition parties, accusing the government of receiving kickbacks from corporations to bolster its electoral price range. With the approaching country-wide election looming, the revelation of the BJP’s significant economic backing, especially through electoral bonds, has stirred similar debate. The latest ban on electoral bonds by the Supreme Court underscores the contentious nature of this funding mechanism and its implications for transparency in political financing. Additionally, the involvement of companies under investigation in shopping electoral bonds increases questions about ability conflicts of hobby and undue effect. Amidst these controversies, allegations of corrupt practices and calls for more duty in political investment continue to reverberate throughout the Indian political landscape.