As the State Assembly elections are set to be held in five Indian states, and General Assembly elections are also nearing, the donations made to various political parties remain a contentious issue. As parties refuse to name the sources of their fundings, questions on transparency and faith in the democracy are being voiced across the country.
According to a report issued by the Association for Democratic Reforms (ADR), corporate donations to the ruling Bharatiya Janata Party (BJP) at the centre have seen a remarkable rise via electoral trusts in 2016-17, and so far the party has received a share of Rs 290.22 crore. However, the total amount of corporate donations in the mentioned year was Rs 325.27 crore made to ten political parties.
Surprisingly, the report further revealed that the donations to the BJP were made just by two out of the 21 electoral trusts registered with the Central Board of Direct Taxes (CBDT). Such registered electoral beliefs include the Janata Nirvachak Trust and Satya/Prudent discretionary trust, the latter received the more substantial sum regarding contributions from corporates like the Piramal Enterprises, DLF group, UPL Ltd, JSW Energy, Bharti Airtel, Essar and Grasim Cements.
In the year 2016-17, Prudent alone received the highest contributions of Rs 283.73 crore which was distributed among nine political parties apart from the BJP. From that Rs 16.5 crore was given to Congress, Rs 9 crore to the Shiromani Akali Dal, Rs 6.5 crore to Samajwadi Party, Rs 1 crore each to Aam Aadmi Party and Shiv Sena, and the rest to parties like the Trinamool Congress, the Rashtriya Lok Dal, the People’s Democratic Party and National Conference.
Rise In Corporate Donation Since BJP’s Arrival At The Center
There has been a sudden rise in corporate donations since 2014. BJP came to power in the centre in 2014.
“Total donations to political parties during 2013-14 was Rs 85.37 crore, during 2014-15: Rs 177.40 crore, during 2015-16: Rs 49.50 cr and during 2016-17: Rs 325.27 cr,” ADR said in a report. The vast difference can be quickly noted here, and if the numbers are analysed, it shows a hike of Rs 240 cr in four years, i.e. from 2013 to 2017.
A promoter of Kotak Mahindra Finance, Suresh Kotak and founder of Max Group, Analjit Singh were the only two individual corporates who have contributed to electoral trusts in FY 2016. “Mr Suresh A Kotak is the fifth largest donor amongst all, donating Rs 18.5 crore to Janta Nirvachak Electoral Trust while Mr Analjit Singh donated Rs 1 crore to Prudent Electoral Trust,” ADR report revealed.
Interestingly, the ADR revealed that in 2016-17 Satya Electoral Trust not only changed its name to Prudent Electoral Trust but also changed its address. “However, there is no official letter uploaded on ECI’s website, regarding the change of name,” the report says further.
ADR Report Shows Loopholes In The Channelisation Of Political Fundings
As of now, corporate funds transferred to the pockets of political parties for their various activities like campaigning that required money for posters, vehicles etc. “These funds are sent through electoral trusts, which, as per the rules formulated by the central government, are required to donate 95 percent of their total income to registered political parties in a financial year. But, it is 69 percent of the income of political parties comes from “unknown sources,” according to the report.
This is not the only evidence showing loopholes in the channelisation of political fundings in a wrong manner as a letter sent by the CBDT to ECI on October 11, 2017 informed that the updated list of 21 electoral trusts were registered with the CBDT, and only 14 of whom had submitted their contributions report.
ADR said many electoral trusts do not specify the name of an organisation or group of the companies which set up the trusts. “It would be ideal to include the name of the parent company in the name of the trust. to have greater transparency,” added ADR in its report
Know About Laws Meant To Curb ‘Black Box’ Like Political Funding
Section 29C of The Representation of the People Act, 1951 states that political parties should declare their donations but only those above Rs 20,000. Also, the Law Commission’s report on electoral reforms in 2015 said that up to Rs 20 crore or 20 percent of any political party’s entire collection, whichever is lower, can be anonymous.
After this declaration, a few experts believed that the statement of anonymous donations would be reduced as it will promote greater transparency in the funding of political parties. Unfortunately, such proposals go in vain as people are not ready to accept electoral reforms due to lack of will among political parties. Such unwillingness is seen as a cause of rapid corruption especially when our country is suffering from issues like black money.
Section 13A under the Income Tax Act, 1961 gives tax exemption to political parties for income from house property and income from various sources. However, several registered political, parties never contest the election. Therefore, they remain only on paper. It was found on numerous occasions that people form political parties before elections to avail benefits like income tax exemptions. There is an urgent need to empower EC so that it gets power to de-register parties in such wrong cases.
Moreover, the ADR report comes at the time when critics are claiming that Modi’s push for electoral bonds will reduce transparency in corporate poll funding.