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Business News/ Politics / Policy/  Companies donate big to Congress, BJP
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Companies donate big to Congress, BJP

Contributions more than doubled between 2004 and 2009 polls; experts say published figures just tip of the iceberg

According to the ADR study, most major political parties reported a growth in income accruals between the two general elections. Photo: Hindustan Times (Hindustan Times)Premium
According to the ADR study, most major political parties reported a growth in income accruals between the two general elections. Photo: Hindustan Times
(Hindustan Times)

New Delhi: Contributions, including money from top companies, to the country’s two largest political parties, the Congress and the Bharatiya Janata Party (BJP), more than doubled between the 2004 and 2009 general elections.

This revelation affirms a trend of companies, most of which are listed, opting for a transparent route to make their contributions to political parties. This is partly prompted by companies being able to get a 100% tax write-off on donations through trusts; two of the largest donors to both parties are trusts.

This is based on the income-tax returns filed by the political parties and accessed under the Right to Information Act by the Association for Democratic Reforms (ADR), a New Delhi-based non-governmental organization that works to improve electoral processes.

However, experts said that what has been published is just the “tip of the iceberg" and much of the corporate contributions to the political parties go unregistered.

According to the ADR study, most major political parties reported a growth in income accruals between the two general elections.

The Congress party’s income, as reported in annual tax returns, rose from 222.07 crore in the election year 2004-05 to 467.57 in 2009-10. Similarly, it went up for the BJP from 104.12 crore to 258 crore.

Among the top donors to the Congress, the BJP and the Samajwadi Party (SP) are the General Electoral Trust, Torrent Power Ltd, the Bharti Electoral Trust, Asianet V Holding Pvt. Ltd, the Electoral Trust and ITC Ltd.

Mint could not independently verify the source and amount of the contributions.

The Aditya Birla Group, while not denying any association, said it does not oversee the working of the General Electoral Trust, which is managed by a different set of people, who could not be immediately reached for comment.

Asianet confirmed that it had donated money, but the amount could not be verified immediately, while the Bharti Group confirmed that the Bharti Electoral Trust is associated with the company and that the payment had been made, without making any further comment.

The details of the Electoral Trust could not be ascertained. Torrent Power and ITC did not reply to emails sent by Mint.

Interestingly, a number of companies that figured in the list of 195 firms that were allocated coal blocks by the government have donated to both the national parties. The national auditor’s finding that irregularities in coal block allocations may have cost the exchequer 1.86 trillion has led to a face-off between the BJP and the Congress.

According to the analysis by ADR, the main source of income is through donations by companies. Together with individual voluntary contributions, interest earnings, and income from the sale of coupons and membership fees, the total income of the Congress between 2004-05 and 2010-11 aggregated 2,008.71 crore, while it was 994.76 crore for the BJP.

The Bahujan Samaj Party(BSP), Uttar Pradesh’s main opposition party, has not declared the names of the contributors as it did not receive donations above 20,000. The BSP’s total income over the seven-year period is 484.28 crore.

Although most of the contributions had been through cheque or demand draft, the highest cash submission was of 32.27 lakh by the district president of the SP of Mainpuri district in 2003-04.

In his 2009-10 budget speech, then finance minister Pranab Mukherjee had announced a 100% tax deduction for companies and individuals contributing to electoral trusts. Besides bringing in transparency, it also facilitated political parties to receive more donations.

In 2003, India enacted a new law that made private donations to political parties easier. This law allows contributions by private companies to political parties, with a maximum limit of 5% of their profits. It also makes it mandatory for contributions to be made by cheque, and requires that parties audit their annual accounts and maintain a list of donors who give in excess of 20,000, and submit this to the Election Commission.

Remya Nair, Surabhi Agarwal, Moulishree Srivastava and Vidhi Choudhary in New Delhi, Bhuma Shrivastava in Mumbai, and Maulik Pathak in Ahmedabad contributed to this story.

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Published: 10 Sep 2012, 11:47 PM IST
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