ADR report: India Inc donated ₹985 crore to political parties between 2016-2018, 93% went to BJP

A report by the Association for Democratic Reforms (ADR) confirms what is already known, that Indian businesses and corporations overwhelmingly support the Bharatiya Janata Party. Conforming to past patterns, 93% of their voluntary donations, declared to the Election Commission by the parties, went to a single party between 2016 and 2018, the BJP.

The donations disclosed to the Election Commission and compiled by the ADR do not include the opaque Electoral Bonds, introduced in 2018. Nor do they include any donation made in cash, information of which may have been withheld by the political parties.

In these two years, as many as 1,731 corporate bodies--- including Torrent group, DLF Group, Dhruvi Securities which is part of the GMR Group, Bharti Airtel, Cadila Healthcare, Wockhardt, DCM Shriram, United Phosphorus and Haldia Energy of the RP-Sanjiv Goenka Group—donated a sum of ₹915 Crore to the BJP.

Indian National Congress received ₹55.36 Crore during these two years, 16 times less than the BJP.

India Inc donated ₹985 Crore to political parties between 2016 and 2018 and 93% went to the BJP.

Businesses and corporate houses prefer to route their donations, at least the official ones, through Electoral Trusts. The Trusts clearly function as a post office, disbursing funds to parties the donors direct. Prudent Electoral Trust, for example, disbursed ₹405 Crore to the BJP

A summary of the ADR report is as follows:

1. Donations from corporate/business houses

a) Out of six National Parties, BJP received the maximum donations of ₹915.596 Cr from 1731 corporate donors followed by INC which received a total contribution of ₹55.36 cr from 151 corporate donors, and NCP with ₹7.737 cr from 23 corporate donors.

b) During FY 2016-17 and 2017-18, BJP’s and INC’s voluntary contributions above Rs 20,000 from corporate/business houses is 94% and 81% respectively.

c) CPI has the lowest share of corporate donations at 2%

2. Year-wise corporate donations to National Parties

a) National parties have received the maximum corporate donations of ₹573.18 Cr in the FY 2014-15 (during which the Lok Sabha elections were held), followed by FY 2016-17 with ₹563.19 Cr and FY 2017-18 with ₹421.99 cr.

b) Between FY 2012-13 and 2017-18, donations from corporates to National Parties increased by 414%, with a major drop in the percentage of corporate donations in FY 2015-16.

3. Top corporate donors to National Parties

a) Prudent/Satya Electoral Trust was the top donor to two of the National Parties, between FY 2016-17 and 2017-18. The Trust donated a total of 46 number of times in 2 years, amounting to ₹429.42 cr.

b) BJP declared receiving ₹405.52 Cr in 33 donations while INC was the recipient of Rs 23.90 Cr of funds in 13 donations from Prudent/Satya Electoral Trust.

4. Categorisation of donors based on their type of businesses

a) The contributions from corporate/ business houses have been divided into 15 sectors/categories by ADR and does not form a part of the submission made by parties to ECI. The sectors include Trusts & Group of companies; Manufacturing; Power & Oil; Mining, Construction, Exports/Imports; and Real Estate among others.

5. Sectors with top donations to National Parties

a) Between FY 2016-17 and 2017-18, Electoral Trusts were the biggest donors to the National Parties, contributing a total amount of ₹488.42 Cr.

b) Real Estate sector was the second highest overall contributor in FY 2016-17, contributing a total amount of ₹49.94 Cr. While in the FY 2017-18, Manufacturing sector was the second highest overall contributor with ₹74.744 cr.

c) Between FY 2016-17 and 2017-18, BJP and INC received the maximum contributions from Electoral Trusts. BJP received the highest, ₹458.02 Cr, followed by INC with ₹29.40 c

Recommendations of ADR

These recommendations need to be pressed by the Election Commission and the Government and ECI should explain if any of these recommendations is not acceptable to them.

1.The Supreme Court gave a judgment on 13-09-2013, declaring that no part of a candidate affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs 20,000, should be blank.

2. All donors who have donated a minimum of Rs 20,000 as a single or multiple donations should provide their PAN details.

3. Date on which the donation was made should be recorded by the party and submitted in Form 24A.

4. Any party which does not submit its donation statement to the ECI on or before 31st Oct should be heavily penalised and its income should not be tax-exempted.

5. A total of Rs 2.55 cr was collected by the National Parties from 84 corporate donors without obtaining their PAN and Address details. Such incomplete contribution reports must be returned to the parties by the ECI, to deter them from providing incomplete information.

6. Corporates should make details of their political contributions available in public domain through their websites (in annual reports or in a dedicated page) for increasing transparency in political financing.

7. Annual scrutiny of donations reports of National, Regional and unrecognised parties should be initiated by a dedicated department of the CBDT, to discourage donations from shell companies or illegal entities.