Massive spike in contributions to electoral trusts in note-ban year
Businessmen and corporate groups thought 2016-17 was the best year to invest in trusts that fund political parties, an analysis of recent government data has shown.
The data, analysed by Association for Democratic Reforms (ADR), has shown that donations by various electoral trusts jumped to a massive Rs 325.27 crore from a paltry Rs 49.50 cr in 2015-16.
The last such spike in donations was witnessed in 2014-15, an election year, when donations went up to Rs 177.40 crore from Rs 85.37 cr (2013-14).
ADR's analysis is on the basis of declarations made by 14 electoral trusts to the Central Board of Direct Taxes (CBDT). A total of 21 such trusts were registered with the CBDT. Out of the 14 that made submissions, only six declared to have received any donations during that year.
The largest amount in such donations has come from Prudent Electoral Trust, which was formerly known as Satya Electoral Trust, whose donors include corporate biggies like Bharti Airtel, Jubilant Foodworks etc.
In 2016-17, Prudent received Rs 283.73 cr and distributed Rs 283.72 cr to six parties. This was 87.18% of the total amount donated to all Electoral Trusts in that year.
Out of this amout, Prudent donated 88.9%, or Rs 252.22 crore, to the BJP. It donated Rs 14.9 cr to the Congress party, Rs 9 cr to the Shiromani Akal Dal (SAD), Rs 6.5 cr to the Samajwadi Party (SP), Rs 1 cr to the Aam Aadmi Party and Rs 10 lakh to the Rashtriya Lok Dal.
Janta Nirvachak Electoral Trust, set up by the Kotak group, donated Rs 25 cr, 100% of its total income, to the BJP.
The BJP alone received Rs 290.22 cr, or 89.22%, of the total donations received by all political parties from electoral trusts.
Other 9 political parties (including the Congress, SAD, SP etc) received only Rs 35.05 cr collectively.
Electoral trusts (Janta Nirvachak Electoral Trust, Paribartan Electoral Trust and Triumph Electoral Trust) have not declared details of cheques given to political parties.
Among corporate donors, DLF Limited contributed the most, Rs 28 cr, to Electoral Trusts. It was followed by UPL Ltd and JSW Energy Ltd, with contributions of Rs 25 cr each.
Among individuals, Suresh Kotak, the fifth-largest donor among all, donated Rs 18.5 cr to Janta Nirvachak Electoral Trust. Analjit Singh, owner of Max group, donated Rs 1 cr to Prudent Electoral Trust.
According to ADR, six trusts donated a total of Rs 105 cr to the national parties before various transparency rules governing contributions to such trusts were formulated, between 2004-05 and 2011-12. These six are: General Electoral Trust, Electoral Trust, Harmony Electoral Trust, Corporate Electoral Trust, Bharti Electoral Trust and Satya Electoral Trust.
Since these rules are not retrospective, they were not required to follow the transparency rules and declare their donor details. Thus, these details remain unknown, leading to speculation on "whether donations to these trusts was only a means of getting tax exemption or a way to convert black money stashed in tax havens to white money in India".
ADR has recommended that details of donors to these Electoral Trusts should also be disclosed. Also, the same rules that apply to those trusts formed after 31 January, 2013, should also apply to the above mentioned Trusts so as to improve transparency.
The CBDT should withdraw approval of those electoral trusts that have never received any contributions since their registration, in keeping with the rules.
Further, the name of the parent company running the trust should ideally be included in the name of the electoral trust.
Also, those Trusts that have not complied with the Election Commission's guidelines should be heavily penalised.
ADR has also recommended that all corporates should make details of their political contributions available in public domain.
Edited by Joyjeet Das
The descriptor of Satya Electoral Trust was corrected on 30 January in this story.