Electoral Trust Scheme

Facts for Prelims

Electoral Trust Scheme

News: Before Electoral Bonds was launched, Electoral Trust (Et) scheme was followed.

About:
• The Electoral Trusts (ET) Scheme was introduced in 2013 to regulate corporate and individual donations to political parties, with an emphasis on transparency.
• It is open to companies registered under Section 25 of the Companies Act, 1956, and individuals or entities residing in India.
• Trusts must renew their registration every three financial years.
• The scheme mandates that 95% of contributions received in a financial year must be donated to political parties registered under the Representation of the People Act, 1951.
• Electoral Trusts ensures transparency by mandating the reporting of contributors and beneficiaries to the Election Commission of India and differs from the Electoral Bonds (EB) Scheme, which permits anonymous political donations.