Political bet? Parties get biggest financial helping from firms

Political bet? Parties get biggest financial helping from firms
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First Published: Fri, Jun 27 2008. 12 48 AM IST

Updated: Fri, Jun 27 2008. 12 48 AM IST
Mumbai: India’s two biggest political parties, the Congress and the Bharatiya Janata Party (BJP), received at least Rs104 crore in officially disclosed contributions between 2004 and 2007, largely from well-known companies.
Almost a third of this amount came in 2004-05, the last year in which national elections were held.
Contributions are expected to soar in 2008-09 in the run-up to elections, officially due sometime in early 2009.
India’s Election Commission provided the information on contributions, or donations as they are dubbed, to Parivartan, an activist group that had filed a right to information, or RTI, application seeking a report on single contributions of more than Rs20,000 to political parties during these years.
The disclosure sheds some light on what has been and continues to be a grey area in the Indian electoral system. Unlike in the US, where parties and candidates have to disclose funding sources, the financing of Indian parties and politicians has always been a secretive affair. Not all companies and other contributors funding the parties disclose details of this; nor do all recipients.
Sometimes, the funding is in kind, through the use of aircraft, vehicles, guest houses or other infrastructure. It is widely acknowledged that significant amounts of cash are donated and deployed by most politicians and political parties in India, much of which is never accounted for.
According to the Election Commission, the Aditya Birla Group, an industrial conglomerate, was the largest donor to any political party between April 2006 and March 2007. It gave Rs10 crore to the Congress, the dominant party in the ruling United Progressive Alliance government.
Pharmaceuticals giant Ranbaxy Laboratories Ltd was the next biggest donor for the Congress in that year, giving Rs40 lakh.
A spokesperson of the Aditya Birla Group simply said: “The group has a general electoral trust, which is administered by highly reputed people such as Julio Ribeiro (former director general of Punjab Police and governor of Jammu and Kashmir), Tarjani Vakil (a finance professional) and E.B. Desai (a legal luminary). The trust is managed independently.”
A Ranbaxy executive said the company’s annual report mentioned that it has donated Rs40 lakh each to the Shiromani Akali Dal and Punjab Pradesh Congress.
For the current main opposition, or the BJP, the biggest donors were Noida-based Jubilant Enpro Pvt. Ltd and Kamaljeet Singh Ahluwalia, with contributions of Rs50 lakh each.
In the previous year, from April 2005 to March 2006, Videocon International Ltd contributed Rs3 crore to the Congress party, while the biggest donor for the BJP was Akik Education Centre, which gave Rs75 lakh. Details on Ahluwalia and Akik Education Centre were not immediately available.
An email sent to Jubilant Enpro did not elicit any response and its spokesperson was travelling. Videocon group chairman Venugopal Dhoot declined to comment. Some promoters of Jubilant are significant shareholders in HT Media Ltd, which publishes Mint.
Political analysts and activists said such disclosures by the Election Commission, even if forced by RTI, can be a step towards accountability even if these official sums are likely to be a fraction of total contributions, most of which remain unreported and unaccounted.
“Many companies give their funding clandestinely,” notes Jaiprakash Narayan, national coordinator of Loksatta, an activist group that works in the area of political reform. “These firms don’t want to be seen funding a political party and political parties don’t want money that is accounted for because the real electoral expenditure is no longer legitimate. We need to make the pain of unaccounted donations so great that no entrepreneur will take the risk to do it.”
Even with this list, many contributors’ identities remain unclear. For instance, in 2003-04, when the Congress was the opposition party, it received Rs5 lakh from an entity simply listed as “National Growth”.
The biggest donations for both parties naturally came in an election year, 2004-05. The BJP, then the dominant constituent of the ruling National Democratic Alliance, saw its treasury swell by about Rs34 crore from contributions. The Congress received Rs32 crore.
“Official donations are not necessarily voluntary donations. As 2004 was the election year, both parties must have gone to business houses seeking donations rigorously,” said psephologist and Mint columnist G.V.L Narasimha Rao. “You can expect a spurt in donations this year due to the elections ahead.”
In other years, the contributions are usually more modest.
In 2003-04, the BJP received at least Rs11 crore while the Congress managed Rs2.35 crore. In 2005-06, the Congress received Rs6 crore, against BJP’s Rs3 crore. The Congress doubled its collection to Rs12 crore the following year, while the BJP received Rs4 crore.
Over the years, there have been some regular contributors, some of which have given money to both the Congress and the BJP.
For instance, between 2003 and 2007, the biggest contributor has been the Aditya Birla Group through its General Electoral Trust. The trust has contributed Rs21.71 crore to the Congress in this period and Rs3.16 crore to the BJP. Other significant contributors include the Vedanta group, either through its Indian subsidiary Sterlite Industries (India) Ltd, or a trust run by this subsidiary, the Public and Political Awareness Trust. Vedanta’s contribution between 2003 and 2007 has been Rs10.5 crore.
Of this, Rs1 crore has gone to the Congress and Rs9.5 crore to the BJP.
An email sent to the Vedanta group did not elicit any response.
Other donors include the Tata group through its Electoral Trust (it gave money only in 2004-05, and to both parties), Jindal Steel and Power Ltd (which gave money to both parties in 2003-04) and Bajaj Auto Ltd, which gave money to the BJP in 2003-04 and the Congress in 2004-05.
India’s biggest company by market capitalization, Reliance Industries Ltd, is missing from the list, as is any company that is part of the Reliance-Anil Dhirubhai Ambani Group (R-Adag).
Also missing are all of India’s large software services firms, Infosys Technologies Ltd, Wipro Ltd and Satyam Computer Services Ltd (the largest, Tata Consultancy Services Ltd, is part of the Tata group).
RTI activist Arvind Kejriwal said he hoped the disclosure on corporate donations through RTI would empower people to draw linkages and question favours granted to companies by political parties.
“This transparency will force political parties not to be blatant in favouring these business houses,” added Kejriwal, who won the Ramon Magsaysay award in 2006 for his work in transparency in governance through RTI.
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First Published: Fri, Jun 27 2008. 12 48 AM IST
More Topics: Congress | BJP | Election Commission | RTI | Donation |