BJP MP Nishikant Dubey alleged that the Congress party orchestrated amendments to the Companies Act in 1969 to ban cheque-based donations after revelations of corporate funds favoring the party in the 1960s. He claimed that the party later reversed this in 1985 to allow both traceable and black money flows. Dubey shared copies of the Bills, emphasizing the history of changes in donation regulations.
Before 1969, companies were permitted to donate to political parties, with most contributions during the 1960s going to the Congress party. The Companies (Amendment) Act, 1969, introduced a ban on corporate political donations under Section 293A to address concerns of corruption and undue business influence in politics. However, this move led to a shift towards unaccounted cash and indirect funding channels.
In response to escalating election costs and limitations of the ban, the 1985 amendment by the Rajiv Gandhi government allowed companies to donate up to 5% of their average net profits with proper disclosure and board approval. This change aimed to balance transparency with corporate contributions to political parties, marking a significant shift in donation regulations.
