UPSC Key: Political funding, Aravalli Hills, and 100 years of CPI

Key Points to Ponder:

— How do political parties receive the funding?

— What are electoral bonds?

— Why SC scrapped electoral bonds?

— What are the challenges pertaining to electoral funding in India?

— What are the reforms suggested regarding electoral funding?

— What are the arguments for and against the state funding of elections?

— What are electoral trusts and how are they funded?

Key Takeaways:

Donors to political parties should be anonymous 

— Subhash Chandra Garg writes: The Bharatiya Janata Party (BJP) received Rs 6,088 crore in political funding in 2024-25, a 53 per cent jump over the Rs 3,967 crore it received in 2023-24, constituting almost 85 per cent of the total funding. Congress received a paltry Rs 522 crore, a steep decline of 54 per cent from Rs 1,129 crore in 2023-24, accounting for less than 7 per cent of the total.

— Two modes of political funding operated in India before electoral bonds were introduced in March 2018. First, companies or individuals could make political donations directly or through electoral trusts (ETs), by publicly disclosing the parties they were funding, with the receiving political parties filing details of donors with the Election Commission of India (ECI).

— Second, there was an opaque cash funding mechanism that did not require any disclosure of donors for amounts less than Rs 20,000.

— Electoral bonds introduced a third mode, with a critical protection regarding which political parties donors funded. The scheme ensured a fair distribution of political funding, with all major non-BJP parties receiving significant funding.

— The funding distribution changed drastically in 2024-25. The BJP got 85 per cent of the funding, Congress fell to just 7 per cent and the TMC to 2.5 per cent.

— Why is all political funding, post-electoral bonds, gravitating towards the BJP? It is not rocket science. Indian businesses and companies, whether small or big, receive benefits from the ruling party in the form of contracts and subsidies. They are naturally afraid of administrative and investigative action.

Political funding needs an IPL model 

— Praveen Chakravarty writes: If the Mumbai Indians had 10 times more money than the other IPL teams, it would help them buy better players, train better and provide better facilities. Naturally, this would help them win the IPL more often. Would the IPL then be deemed fair, competitive or even interesting for viewers? Obviously not.

— The IPL has explicit rules to ensure financial parity, and all teams have the same amount of money, so they compete only on talent and merit. This is how most of the big sports leagues in the world operate.

— If sports leagues can understand the importance of a “level financial playing field” and enforce rules, shouldn’t democratic politics that shapes the lives and livelihoods of millions of people be even more rigorous and strict in ensuring financial parity for all political parties?

— The BJP has 12 times more money than its nearest rival, Congress. Of all the corporate donations to political parties in 2024-25, the BJP got more than 75 per cent of the money while a dozen other parties combined got only 25 per cent. The “Indian Election League” is the most skewed, most unfair and least competitive election league of all democracies in the world.

— A typical BJP candidate in an election has 10 times more money than his rival, which helps him deploy more people, more posters, more “influencers” in that constituency. In many cases, the rival candidate is so daunted by the scale of the BJP candidate’s efforts that he thinks it’s wiser to pocket his share of election expenses and let the BJP candidate win anyway.

— State funding of elections as an alternative advocated by Communist parties is untenable for the size and scale of India’s politics. The issue is not a lack of means of funding but the monopolisation of funding and a quid pro quo with the ruling party.

— A “blind pool” framework of electoral funding can be a solution where corporates donate to a trust managed by a constitutional body that then distributes the funds in proportion to the seats contested by each party or some such transparent measure.

— The “blind” aspect is necessary to avoid quid-pro-quo corruption, and a centrally managed pool with a well-publicised allocation formula would ensure financial parity for all parties.

— India’s elections may be free (people are free to vote), but are certainly not fair. The current skew in election funding is unsustainable, and it is only a matter of time before opposition parties throw in the towel and withdraw from such grossly unfair elections. Let Indian politics learn from Indian cricket.

Do You Know:

— The electoral trust scheme was introduced by the UPA government in 2013. It preceded the electoral bonds scheme that was introduced by the NDA government in 2018.

— Both schemes are meant to facilitate donations to political parties by corporations and individuals. But while the electoral bonds scheme sought to ensure donor anonymity, electoral trusts are required to report to the Election Commission contributions from individuals and companies, and their donations to parties every year.

— Under the scheme notified by the UPA-2 government on January 31, 2013, any company registered under the Companies Act can form an electoral trust.

— Under Section 17CA of the Income Tax Act of 1961, any citizen of India, a company registered in India, or a firm or Hindu Undivided Family or association of persons living in India, can donate to an electoral trust.

— The number of registered trusts has ranged from three in 2013 to 17 in 2021-22, but only a few of them actually make donations every financial year. While just five trusts reported contributions in 2023-24, the number increased to nine in 2024-25. Of these nine, three trusts — Prudent Electoral Trust, Progressive Electoral Trust and New Democratic Electoral Trust — accounted for 98 per cent of all contributions in 2024-25.

— Electoral trusts must apply for renewal every three financial years. They must donate 95% of contributions received in a financial year to political parties registered under the Representation of the People Act, 1951. The contributors’ PAN (in case of a resident) or passport number (in case of an NRI) is required at the time of making contributions.

Other Important Articles Covering the same topic:

📍Explained: What are electoral trusts and how are they funded?

Previous year UPSC Mains Question Covering similar theme:

The Right to Information Act is not all about citizens’ empowerment alone, it essentially redefines the concept of accountability.” Discuss. (UPSC CSE 2018)

 

THE EDITORIAL PAGE

The good news is, lower-income states are catching up 

Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: General Studies-II: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

What’s the ongoing story: Pranjul Bhandari writes: The strength of the Indian economy rests on the strength of its states. National GDP is, after all, the sum of state gross domestic products (GSDPs). States with lower income per capita and significant catch-up potential can generate strong growth for several years if conditions are right. Indeed, this catch-up dynamic can allow laggards to grow faster than the leading states.

Key Points to Ponder:

— How Public capital expenditure led to private-sector investment?

— How revenues are divided between Centre and the state?

— What is the role of the Finance Commission in this?

— How GST impacted the state revenue?

— What is the fiscal deficit? How is it calculated?

— How cash transfer schemes just before the election impacts state revenue?

— Understand the role of Vikshit Rajya in achieving Vikshit Bharat

Key Takeaways:

— We explore data over the last 12 years, dividing it between the six years pre-pandemic (FY13-FY19) and the six years post-pandemic (FY19-FY25). In the pre-pandemic period, there were no signs of convergence. Lower-income states grew more slowly than higher-income ones and, based on this simple framework, this was in fact a period of divergence.

— Fast forward to the post-pandemic period, and the picture changes. We find evidence of lower-income states growing faster on average. In particular, Uttar Pradesh, Rajasthan and Bihar have pivoted to higher relative growth. This is recent and nascent, but the pivot is clear.

— One variable stands out in explaining this convergence: Public capital expenditure by states. Several emerging states — such as Assam, UP, Rajasthan, and Bihar — have invested substantially more in infrastructure in recent years. State capex not only improves the physical backbone for economic activity but also signals a reform-oriented government.

— It crowds in private-sector investment. Together, these channels drive higher growth. The key question is whether this momentum can be sustained.

— Strong state revenues matter for public capex. When states are fiscally comfortable, they invest more — an effect that is particularly pronounced for laggard states. In the period immediately after the pandemic, central transfers to states increased. Even as GST compensation ended, the capex loans to state programmes kicked in, keeping overall revenues elevated.

— But the environment is changing again. Two developments co-exist that could potentially hurt the capex cycle.

— First, we are entering a phase in which the Centre’s tax revenues are weakening, driven partly by direct and indirect tax cuts and lower-than-expected nominal GDP growth. This could reduce state revenues…

— Second, pressures are not limited to revenues. There has been a wave of new or enhanced cash transfer schemes, particularly ahead of state elections. Current expenditures have risen, as have fiscal deficits.

— To make states more secure on the revenue front and sustain the capex drive, the Centre could step in by expanding support to states; in particular, an increase in the capex loans to states programme could help.

— This loan programme is well suited to the task. It is ring-fenced for state capex and cannot be diverted to other uses. It crowds in states’ own capital spending and complements the central government’s capex.

— The onus is not only on the Centre. States must also seize growth opportunities. The Centre has led a deregulation drive, highlighting about 23 ground-level reforms each of India’s states should implement.

— Amongst the many changes, the new Industrial Relations Code raises the threshold below which a firm can lay off workers without permission, from 100 to 300 employees. There is a further provision in this law for states to raise the threshold from 300 employees and become magnets to large firms that are globally competitive.

— Finally, as global supply chains are reconfigured, opportunities have emerged to attract FDI into labour-intensive mid-tech manufacturing sectors such as textiles, footwear, furniture, and toys.

— In conclusion, India’s emerging states are showing early signs of faster growth and catch-up potential. If they can stay the course on public capex and capitalise on reform opportunities, they could become a powerful driver of India’s rising place in the world.

Do You Know:

— The Centre has set a fiscal deficit target of 4.4 per cent of the GDP for the financial year 2025-26. After the Covid-19 pandemic, global debt levels of major emerging economies have worsened.

— The government has been working towards reducing its debt-to-GDP ratio, which refers to the share of a country’s national debt to its gross domestic product. In 2017, the NK Singh Committee had recommended a ceiling for general government debt of 60 per cent — 40 per cent for the Centre and 20 per cent for states. The general government debt level in India is currently over 80 per cent with the Centre’s share at about 57 per cent.

— In February, marking a significant shift from having fiscal deficit as the only operational target for fiscal consolidation, the government had outlined its intent to move to the debt-to-GDP ratio as the fiscal anchor from FY27 onwards. It has targeted a declining debt-GDP ratio to 50±1 per cent by March 31, 2031

Other Important Articles Covering the same topic:

📍Give states their fair share, protect their fiscal space

📍Many states in difficulty due to freebies, high committed expenditure, says FM Sitharaman

Previous year UPSC Mains Question Covering similar theme:

Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India? (UPSC CSE 2025)

Revised definition of Aravallis will hurt its ecology

Syllabus:

Preliminary Examination: General issues on Environmental Ecology, Biodiversity and Climate Change – that do not require subject specialisation.

Mains Examination: General Studies-II, III: Government policies and interventions, Conservation, environmental pollution and degradation, environmental impact assessment.

What’s the ongoing story: Debadityo Sinha writes: The Supreme Court of India’s recent judgment on the definition of the Aravalli Hills marks a rupture in the nation’s environmental jurisprudence. By endorsing a definition that sidelines science and weakens the precautionary principle, the ruling redraws one of India’s most critical ecological systems using an arbitrary numerical shortcut devoid of scientific validity.

Key Points to Ponder:

— What is the ecological significance of Aravalli Hills?

— What is the Forest Survey of India’s (FSI) slope-based approach?

— What is the Environmental Impact Assessments (EIA)? Highlight its significance.

— How SC has stood as a guardian of India’s environmental legacy?

— What are the mining concerns in Aravallis? How does it impact the environment?

Key Takeaways:

— The Aravallis have historically been understood as far more than a collection of hills. They constitute a continuous living landscape regulating climate and facilitating groundwater recharge and supporting a wide range of biodiversity in one of India’s most arid regions.

— While the judgment acknowledges this ecological significance, the Court has ultimately privileged administrative convenience over ecological coherence. Its near-total reliance on government submissions raises troubling questions.

— Acting under the Court’s own directions, the Central Empowered Committee (CEC) had earlier cautioned against the Ministry of Environment’s proposed “100-metre local relief” rule, endorsing the Forest Survey of India’s (FSI) slope-based approach.

— This was not a philosophical objection but one grounded in data; the amicus curiae warned that the 100-metre threshold would open lower hills to mining, destroying the range’s integrity. Yet, these warnings were brushed aside.

The public concern is rooted in history: the Aravallis have long faced sustained pressure from legal and illegal mining, as well as construction and other development activities. (Express Photo by Gajendra Yadav)

— At the heart of this failure lies bad statistics implemented as policy. The committee relied on district-wise average elevation to justify the 100-metre threshold — a fundamentally flawed approach in a landscape as heterogeneous as the Aravallis, where heights range from 20 to 600 metres. In such extremes, averages are meaningless; a few tall peaks can inflate a district’s average, leaving the majority of lower hills unprotected.

— With reportedly over 1,18,575 hills at stake, the Court failed to demand a detailed response, accepting vague percentages instead. By anchoring the debate to averages, the process risks the destruction of thousands of ecologically vital formations.

— Equally troubling is the acceptance that this is merely an “operational” definition for mining. Definitions are rarely neutral. Once landscapes fall outside legal recognition, they slip from the precautionary framework.

— To assume Environmental Impact Assessments (EIA) will safeguard these areas presumes a rigour that the Ministry’s record does not support. Weakening protection to legalise mining through a compromised EIA process is not regulation — it is abdication.

— The Aravallis do not rise and fall neatly at 100 metres. They are a system where low hills, foothills, and aquifers function together. Protecting only prominent peaks while rendering the rest invisible is not conservation; it is ecological amputation.

— The Supreme Court has long stood as the ultimate guardian of India’s environmental legacy, a role that this judgment now risks diluting. Correcting this course is essential not merely to prevent the irreversible fragmentation of the Aravallis, but to reaffirm the judiciary’s role in reminding the government that it is a trustee of the country’s natural assets, as guaranteed under the Constitution.

Do You Know:

— The apex court has frequently demonstrated a proactive vigilance regarding environmental conservation.

—- Jharkhand: Asia’s largest Sal forests: On October 8, the Supreme Court ordered the Jharkhand government to declare the Saranda forest a wildlife sanctuary in West Singhbhum district. These forests are also known as the ‘Land of Seven Hundred Hills’ for its hilly terrain and Asia’s largest Sal forests spanning 314 square kilometres.

— No mining within a km of national parks, wildlife sanctuaries: On November 13, the Supreme Court banned all mining activities within one kilometre of national parks and wildlife sanctuaries across the country.

— Bihar: Save dolphins: The top court in April directed the Centre and Bihar government to submit a detailed report within four weeks on the encroachment of the Ganga’s banks, threats to dolphins, and the actions taken so far.

Other Important Articles Covering the same topic:

📍From Uttarakhand to Tamil Nadu: Amid criticism of Aravalli ruling, instances when Supreme Court kept vigil in 2025

📍Before 2025 yes was the 2010 no: Supreme Court had rejected 100-metre definition of Aravallis

Previous year UPSC Prelims Question Covering similar theme:

Which one of the following is the correct order of formation of geological systems in India in terms of their age? (Starting with the oldest) (UPSC CAPF 2016)

(a) Dharwars – Aravallis – Vindhyans – Cuddapahs

(b) Aravallis – Dharwars – Cuddapahs – Vindhyans

(c) Vindhyans – Dharwars – Aravallis – Cuddapahs

(d) Cuddapahs – Vindhyans – Dharwars – Aravallis

 

NATION

In Indian Ocean region, 100 villages to be tsunami-ready

Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: General Studies-III: Disaster and disaster management

What’s the ongoing story: India would soon have over 100 tsunami-ready villages among the Indian Ocean region. India will be the first country with as many villages in this region with this distinction.

Key Points to Ponder:

— What is the Tsunami Ready Recognition Programme (TRRP)?

— What is the role of UNESCO’s Intergovernmental Oceanographic Commission (IOC)?

— What are the reasons for frequent tsunamis in the IOR?

— What are the mechanisms for tsunami preparedness in India?

— What is India’s tsunami early warning system?

— How does a tsunami occur?

— What initiatives has the government undertaken to address tsunami-related disaster management?

Key Takeaways:

— Tsunami-ready village is certified to the ones that have high awareness about tsunami, hazard preparedness and mapping, public display of evacuation maps, 24-hour warning systems, participation in mock drills among others. The certification is awarded by UNESCO’s Intergovernmental Oceanographic Commission (IOC).

— Tsunami-ready is a voluntary community-based programme that facilitates tsunami preparedness by actively collaborating with the public, community leaders, local and national emergency management agencies.

— In addition to the existing 24 coastal villages across six districts with this certification, Odisha is set to add 72 more villages to this list. States and UTs like Gujarat, Kerala, Andhra Pradesh and Andaman and Nicobar islands have also identified some villages. By March or April 2026, Kerala has proposed nine coastal villages for this initiative.

— INCOIS operates the  Indian Tsunami Early Warning Centre (ITEWC) which tracks earthquakes globally, and issues tsunami warnings for the Indian Ocean region. It is the coordinating institute for implementing UNESCO-IOC ‘Tsunami Ready’ initiative.

— The institute had initiated activities to extend UNESCO-IOC ‘tsunami ready’ programme in all coastal states and UTs on a pilot scale.

Do You Know:

— According to USGS, Tsunamis are ocean waves triggered by: Large earthquakes that occur near or under the ocean, Volcanic eruptions, Submarine landslides, and Onshore landslides in which large volumes of debris fall into the water.

— Tsunamis typically consist of multiple waves that rush ashore like a fast-rising tide with powerful currents. When tsunamis approach shore, they behave like a very fast moving tide that extends much farther inland than normal water. If a tsunami-causing disturbance occurs close to the coastline, a resulting tsunami can reach coastal communities within minutes.

Other Important Articles Covering the same topic:

📍The day the sea took everything: Remembering the 2004 tsunami 20 years later

Previous year UPSC Mains Question Covering similar theme:

On December 2004, tsunami brought havoc on fourteen countries including India. Discuss the factors responsible for occurrence of tsunami and its effects on life and economy. In the light of guidelines of NDMA (2010) describe the mechanisms for preparedness to reduce the risk during such events. (UPSC CSE 2017)

 

EXPLAINED

100 years of CPI: The many roots of the Communist movement in India

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies-I: Modern Indian history from about the middle of the eighteenth century until the present – significant events, personalities, issues.

What’s the ongoing story: 100 Years of CPI: The Communist Party of India (CPI) considers December 26, 1925 as its foundation date. On that date, Communist groups from the country met in Cawnpore (now Kanpur) in what is recognised as the first concerted effort on Indian soil toward forming an all-India Communist party.

Key Points to Ponder:

— What is socialism? How is it different from Capitalism?

— What are the main arguments of Karl Marx?

— Why did Russia become the first communist country?

— Know about French Revolution, Napoleonic wars

— What is the Meerut Conspiracy case?

— Trace the historical events of communist in India against Imperialism

— What is the criticism of Communist doctrine?

— How ideological different was the communist movement pre and post independence in India?

— How relevant is communism today?

Key Takeaways:

— Following the French Revolution (1789) and the Napoleonic wars (1796-1815), all of Europe was politically divided between monarchists, defenders of the old order, and republicans, supporters of change in a modern direction. This was the beginning of what later came to be identified as the Right-Left binary.

— Economically, whereas industrialism generated affluence, it also created an inegalitarian society with increased disparities. In this political-economic landscape of Europe, Karl Marx, a German philosopher settled in England, prepared a manifesto for Communist parties, which would carry along the transformation of the entire human society from capitalism to socialism.

— He anticipated that the capitalist system, with its headquarters in Europe, was bound to collapse under the weight of its own inner contradictions. This would be followed by a just and superior socialist system.

— Obviously, Marx expected this transformation to first occur in Western Europe, the citadel of capitalism. On the contrary, the first successful socialist revolution occurred in 1917 in the Russian empire, which was economically backward by European standards and ruled by an autocratic regime of the Tsars.

— The Russian revolution, also known as the Bolshevik and Socialist revolution, was against medieval monarchism, modern capitalism, and its offshoot, imperialism. As such it was bound to have a great appeal in the non-European countries suffering under imperialist domination.

— There were broadly speaking three political strands which fed directly into the formation of the Communist Party of India.

* First was represented by M N Roy, a Marxist revolutionary, who had spent some years in the US, Mexico, Berlin and later the USSR during the course of the First World War…The Comintern instructed the Communists in these countries to first focus on the struggle against imperialism, for which they were to get into a temporary alliance with all the anti-imperialist forces.

* Second, and quite independent of these diasporic initiatives, were independent Left groups which sprang up in parts of India: in Lahore, led by Ghulam Hussain, in Bombay (now Mumbai), led by S A Dange, in Calcutta (now Kolkata), led by Muzaffar Ahmad, and in Madras, led by Singaravelu M Chettiar.

* Third, organizations of workers and peasants had also come up by the 1920s. An All-India Trade Union Congress (AITUC) was formed in 1920, under the presidentship of Lala Lajpat Rai.

— Two Indian revolutionaries — Abdul Rab and Trimul Acharya — were already active in Central Asia. They, along with Raja Mahendra Pratap and M N Roy, decided to set up a Communist party in Tashkent in 1920 and got the approval of the Comintern.

— In the meantime, Indian Communist groups, active in Lahore, Bombay, Calcutta and Madras, decided to meet and organise a national conference in 1925 in Kanpur, an industrial town in present-day Uttar Pradesh with a substantial presence of industrial workers. The annual session of the Indian National Congress was also being held in Kanpur at the same time.

— Moreover, it was also in Kanpur that the British government had instituted the Kanpur (Cawnpore) Bolshevik Conspiracy case against Indian Communists in 1923, and charged them with conspiracy against the British empire. Three Communist leaders — S V Ghate, S A Dange and Muzaffar Ahmad — were sentenced for four years.

— So, was the Communist party formed in Tashkent in 1920 or in Kanpur in 1925? The two major factions that developed after the split of 1964 — the CPI and the CPI (Marxist) — hold very different opinions on this.

— The CPI (M) considers the Tashkent meeting in 1920, with its clear international location and approval by the Comintern, as the historic starting point.

— For the CPI, it was Kanpur in 1925 and not Tashkent in 1920 that constituted the foundation moment of the Communist party. Moreover, the Tashkent venture was associated with M N Roy, who used to be considered a renegade, and had been expelled from the party.

— The Communists remained actively involved in the anti-imperialist struggle throughout, except the conjuncture of 1942-45 when, during the Second World War, they treated the global struggle against Fascism as more important than the national struggle against British imperialism.

Other Important Articles Covering the same topic:

📍C Raja Mohan writes: Indian Communism is 100 years old. And it’s too early to write its obituary

Previous year UPSC Prelims Question Covering similar theme:

(2) Consider the following events: (UPSC CSE 2018)

1. The first democratically elected communist party government formed in a State in India.

2. India’s then-largest bank, ‘Imperial Bank of India’, was renamed ‘State Bank of India’.

3. Air India was nationalised and became the national carries.

4. Goa became a part of independent India.

Which of the following is the correct chronological sequence of the above events?

(a) 4- 1 – 2 – 3

(b) 3-2-1-4

(c) 4-2-1- 3

(d) 3-1- 2 – 4

(3) Which of the following statements are correct regarding the Communist Party of India (CPI)? (DSSSB)

I. It was founded in 1930.

II. It is inspired by Marxism.

III. In 1957 election, the CPI became the first communist party in the world to win an election in a parliamentary democracy.

(a) I and II

(b) I, II, and III

(c) I and III

(d) II and III

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PRELIMS ANSWER KEY

1. (b)             2. (b)           3. (d)

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