CORPORATE DONATIONS TO political parties may slow down a bit as a result of the scrapping of the electoral bonds scheme by the Supreme Court, but Indian companies may revert to electoral trusts, lawyers and analysts said.
Lawyers said electoral trusts allow companies to maintain an arm's length distance while donating to political parties, at least in terms of perception.
This is because trusts are supposed to be independent of the companies that create them under the law. In 2013, the United Progressive Alliance government allowed the setting up of electoral trusts to establish electoral trusts, which enable the pooling of funds, allowing multiple companies or entities to make political contributions through a single trust.
According to Election Commission of India (ECI) data, there are 18 electoral trusts in India, some of which count large corporate houses as their biggest donors.
A source at Tata Group-backed Progressive Electoral Trust said: "After the electoral bond scheme was unveiled, many wondered if the trusts created for political funding would be relevant any longer. But they remained relevant. The trusts have a formula-based approach to contribute funds to political parties.
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