Political finance in India: Closing the gaps, and aligning with UNCAC Resolution 11/7

In December 2025 in Doha, the United Nations Convention against Corruption (UNCAC) adopted Resolution 11/7, placing transparency of political financing squarely at the heart of the global anti-corruption agenda. The resolution outlines how opaque political funding is not merely an electoral concern but a governance issue with implications for public policy, as it distorts accountability and erodes trust in democratic institutions. The relevance of this resolution for India, the world’s largest electoral democracy, is immediate and compelling.

Article 7.3 of the 2005 UNCAC called for states to implement measures ‘that enhance transparency in the funding of candidates for public office, as well as, where applicable, in political party financing’. India committed fully to this, legally and politically, by signing the UNCAC on 9 December 2005 and ratifying the convention on 9 May 2011, meaning that the country must align its domestic laws with its provisions.

Gaps in the regulatory framework

India has made incremental progress in improving the transparency of political and party finances, with change coming primarily through evolving disclosure requirements and through judicial interventions. However, significant gaps persist in the legal framework, and compliance with – and enforcement of – the evolving reporting requirements remains weak, all of which limits accountability.

The principal laws governing political funding and political parties’ election spending are contained in the Representation of the People Act 1951 (sections 29C and 77), the Companies Act 2013 (Section 182), and the Income Tax Act 1961 (Section 13A). These laws, taken together, aim to ensure electoral integrity, participatory democracy, and free and fair elections, and to curb money power in elections. However, these laws have proven insufficient to address the challenges of political financing.

At the Association for Democratic Reforms (ADR), a non-profit organisation working on electoral and political reforms in India, we studied the political finance regulatory framework and analysed official disclosures by political parties and candidates related to party funding and campaign expenditure.

Our findings reveal eight important gaps in the current political finance framework.

Gap #1: Political parties are largely funded by corporations and the private sector

Funding to parties and candidates is highly concentrated, with corporate donations dominating the landscape, often routed through complex or opaque channels. Direct corporate donations declared by the incumbent party are at least four times more than those for all other national parties combined and its overall share of corporate donations is almost 85%.

Gap #2: According to current law, donor details for party donations below 20,000 rupees (INR) (190 euro) do not need to be disclosed

Since 2004, major political parties have declared approximately INR 58.5 billion (546 million euro) from such anonymous, sub-20,000-rupee donations.

Gap #3: There is no limit on political parties’ election spending

This is an important issue for several reasons.

First, the need for money places barriers to entry into politics. We found that money – and the power associated with it – is a powerful predictor of electoral success. In the 2024 general elections, for instance, candidates who were millionaires had a 19% chance of victory. For non-millionaires, it was just 0.7%.

Second, there is a large income disparity among political parties. Between financial years 2014–15 and 2023–24, the incumbent party’s share was just over 65% of total income received by all national parties.

It is worth noting that financial barriers to entry operate differently depending on the type of election. Parliamentary and state election campaigns often require substantial financial resources for campaigning and large-scale voter mobilisation, so party financial support plays an important role at higher levels of elected office. In contrast, personal resources and community networks play a greater role at the local level.

We also found several cross-cutting gaps (Gap #4, #5, #6, and #7) relating to legal and regulatory oversight and enforcement of party financing rules:

Gap #4: There is no comprehensive law governing political parties

Gap #5: The Election Commission’s transparency guidelines are non-binding

Gap #6: Existing laws relevant to political finance are under-enforced by key agencies

Gap #7: The Election Commission does not have sufficient power to penalise political parties for breaches

During the 2024 general elections, INR 100 billion (934 million euro) worth of items intended for vote-buying were seized, including cash, narcotics, and alcohol. Article 15 of UNCAC mandates that member states adopt measures to criminalise both active and passive bribery, and bribery is both an electoral offence and a corrupt practice in Indian law. Cases of bribery during elections are rarely pursued, however.

Related to this is an emerging trend of cash transfers by central and state governments, especially to women, farmers, and young people. These are often introduced in the period preceding elections and, in some cases, during election cycles, even when the governments are already running huge fiscal deficits and debt burdens. While welfare benefits are legitimate functions of government, their timing, design and implementation may raise concerns when public resources are used to secure electoral advantage.

Beyond voter inducements, unaccounted for and illicit funds are also used to finance party defections, divide opposition parties, or to secure a majority in legislatures. Selective use of enforcement and investigative agencies against political opponents by all ruling parties is cementing the role of such funds as a tool for political coercion and institutional decay. An ADR study found that 433 national or state legislators switched parties and re-contested elections between 2016 and 2020 alone.

Gap #8: In the media, there is no clear distinction between news reporting and political advertisements

The rise of online political advertising, surrogate campaigns, and intermediary funding structures has created new blind spots in political communication. This is true in both traditional and social media, with parties generating ‘proxy accounts’ online. During the 2024 general elections, these became channels for large sums of political advertising.

The unique context of Indian political finance

Money power in Indian elections rarely operates in a vacuum. Its impact is often shaped by party organisation, incumbency, inherited wealth, political family networks, caste and community ties, patronage, and clientelism. These factors can determine who enters politics, who receives party support, who can manage a competitive campaign, and who ultimately achieves electoral success.

Everyday politics often relies on informal patron–client relationships, where money power is deployed indirectly through local favours, community gifts, and informal safety nets. Caste networks and local elites can help mobilise resources and consolidate voter support. Dynastic ties and inherited wealth can provide established networks and political connections that can compound these advantages.

ADR’s study shows that 21% of all sitting legislators (members of parliament, of the legislative assembly, and of the legislative council) have dynastic backgrounds. Thus, regulating political finance requires understanding the networks or channels through which financial and other forms of political capital translate into electoral advantage and political power.

How to close the gaps in India’s political finance system

To align with UNCAC, India has updated several laws and introduced new legislation such as the Prevention of Corruption Act (PCA) 1988, the Lokpal and Lokayuktas Act 2013, and the Whistle Blowers Protection Act 2014.

India has also established legal commitments towards international standards on political finance. These include: criminalising the supply side of bribery under the PCA (ie, those offering bribes); introducing corporate liability by holding companies accountable for corruption; expanding the definition of gratification to include ‘undue advantage’ by explicitly including non-monetary benefits like gifts, favours or better postings; immediate attachment and forfeiture of property derived from corrupt acts; and time-bound corruption trials within two years, with a maximum extension of up to four years.

A further change was the 2018 amendment to the PCA, which placed corruption in the ‘heinous crime’ category. This meant an increase to the minimum sentence for accepting a bribe from six months imprisonment to three years, and the maximum increased from five years to seven. On 4 March 2024, a seven-judge Constitution Bench of the Supreme Court of India also effectively ended the long-standing legal immunity granted to legislators accused of bribery.

However, for India to truly align with global standards on political finance, and to ensure that financial dominance doesn’t equate to electoral advantage, our analysis shows that several reforms are needed:

• A comprehensive law to regulate and monitor political parties
• More complete disclosure and transparency of political contributions by parties and donors
• A digitised system covering all political contributions
• Further deliberation on whether elections should be solely funded through public or state resources
• A cap on political parties’ expenditures
• Specific rules developed and enforced regarding online and third-party campaign spending

ADR recently released an assessment study of India’s political finance regulatory framework. This study includes more detailed findings and actionable recommendations directed at the Election Commission, political parties, oversight bodies such as income tax authorities, civil society, and the public. We hope they can serve as a practical foundation for implementing the 2025 UNCAC resolution 11/7, the first global multilateral framework on political finance integrity.