BJP gets maximum donation from Electoral Trusts

The Bharatiya Janta Party, as per RTI filed by ADR, received  100.25 crore or 39.85 per cent of the total donations received by all political parties from Electoral Trusts during 2018-19. A report by Sunny Sharma

As per the analysis released on February 5 by Association for Democratic Reforms and released on February 6, the Indian National Congress was at number two slot as for as contribution through electoral trusts is concerned. The INC received 43 crore or 17.09 per cent of the total donations received by all parties. 

Other 12 political parties including BJD, NCP, SP, AAP, TDP, SHS etc. received a total of 108.30 crore collectively. Prudent Electoral Trust donated 67.25 crore to BJP during 2018-19, in contrast to 154.30 crore contributed in financial year 2017-18, while AB General Electoral Trust donated 28 crore of its total income to BJP. The Janhit Electoral Trust made contributions to only one political party of 2.5 crore to BJP.

The Prudent Electoral Trust donated to 11 political parties (including major parties like BJP, INC, NCP, AAP, BJD & YSR-C ) unlike during 2017-18 when it contributed to only three political parties. The INC received 43 crore or 17.09 per cent of the total donations received by all parties from AB General, Samaj and Prudent electoral trusts.

The Election Commission of India (ECI) had circulated Guidelines for submission of contribution reports of Electoral Trusts in their Annual Reports containing details of contributions received in the interest of transparency. Initially, these guidelines were issued to 7 Electoral Trusts which included Satya Electoral Trust, Pratinidhi Electoral Trust, People’s Electoral Trust, Progressive Electoral Trust, Janhit Electoral Trust, Bajaj Electoral Trust and Janpragati Electoral Trust. Subsequently, these guidelines were sent by the ECI to all Electoral Trusts. 

As many as 15 out of the 21 Electoral Trusts, registered with the CBDT, submitted their contribution details for 2018-19 to the ECI of which only 5 declared to have received any donations during
that year. 

According to Clause 5 (o) of the Electoral Trusts Scheme, 2013, the approval given to a registered Electoral Trust “shall be valid for the assessment year relevant to the financial year in which such application has been made and for a further period, not exceeding three assessment years, as may be specified in such approval”. Eleven Electoral Trusts submitted applications for renewal of the Trusts to the CBDT. 

An overview reveals that out of the 21 registered Electoral Trusts, 15 trusts have been submitting copies of their Contributions report to the Election Commission, consistently, since their registration. Satya/Prudent Electoral Trust are the only trusts to submit its annual
report for all 6 years, financial years 2013-14 to 2018-19, declaring contributions received each year. There are 8 such registered Electoral Trusts that have either declared not receiving any contributions.

The Association of Democratic Reforms filed an RTI Application with the ECI seeking details of contribution by Electoral Trusts and as per the response received from the ECI, on December 2, 2019; there are a total of 21 Electoral Trusts registered with the CBDT. The registration of 4 Electoral Trusts-Bajaj Electoral Trust, Gauri Welfare Association Electoral Trust, Pratinidhi Electoral Trust and Bhartiya Socialist Republican Electoral Trust Association was not renewed), 15 of whom had submitted their contributions reports. Of these, only 5 Trusts declared receiving contributions from various corporate houses and individuals.

According to the rules formulated by the Central Government, Electoral Trusts are required to distribute at least 95 per cent of the total contributions received during the financial year along with the surplus brought forward from earlier financial year to the eligible political parties before 31st March of the said financial year. As many as 5 Electoral Trusts which have declared receiving contributions during 2018-19, have received a total amount of 252.0065 crore from corporates and individuals and distributed 251.554 cr (99.82 per cent) to various political parties.

The GMR Hyderabad International Airport Limited contributed the highest amount worth 25 crore amongst all donors of the Electoral Trusts, followed by Ultratech Cement Limited with 23 crore and Bharti Airtel Limited which contributed 21.17 crore to various Trusts. Only two individuals, Ms. Sushmita Kacholia (50 lakhs to Prudent Electoral Trust) and Ashish Kacholia (11 lakhs to Prudent Electoral Trust) have contributed to Electoral Trusts in 2018-19. Top 10 donors have donated 161.42 crore to Electoral Trusts, which forms 64 per cent of the total donations received by the Trusts during 2018-19. 

The Association for Democratic Reforms has observed that before the transparency rules governing contributions to Electoral Trusts were formulated by the Central Government, 6 Electoral Trusts had donated a total amount of 105 crores to the National Parties between 2004-05 and 2011-12.General Electoral Trust donated 131.65 crore to 7 political parties during 2014-15. It is to be noted that the rules are not retrospective and hence these 6 Electoral Trusts- General Electoral Trust, Electoral Trust, Harmony Electoral Trust, Corporate Electoral Trust, Bharti Electoral Trust and Satya Electoral Trust are not required to follow the transparency rules and declare their donor details. 

Only 10 or 66.67 per cent out of the 15 Electoral Trusts that submitted their annual reports for 2018-19 declared that they received nil contributions in that year. Between 2013-14 and 2018-19, 6 Electoral Trusts have declared that they have not received any donations since the year of their registration while 6 Electoral Trusts have declared receiving contributions only once since registered. This raises a question on the continuation of registration of such trusts that fail to fulfill their primary objective of distributing contributions received by them to the political parties concerned. 

The Contribution reports for 2018-19 of 6 out of 21 registered Electoral Trusts are not available on the website of the ECI, more than three months have passed since the deadline. These Trusts include Triumph Electoral Trust, Harmony Electoral Trust, Kalyan E.T., Janshakti E.T., Progressive E.T. and Small Donations E.T. the contribution report of Kalyan Electoral Trust was not even once available on the ECI website since its registration in September, 2016. 

Details of donors to these six Electoral Trusts remain unknown thereby 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. 

The ADR has demanded that details of donors to these Electoral Trusts, which were, formed before the CBDT rules came into existence, should also be disclosed. Also, the same rules, which apply to those Trusts formed after January 31, 2013, should also apply to the all the Trusts so as to improve transparency. 

The clause 8(1) of the Electoral Trust Scheme, while explaining the process for withdrawal of approval states that “The CBDT may withdraw the approval granted under this Scheme if it is satisfied that the electoral trust has ceased its activities or its activities are not genuine or are not carried out in accordance with all or any of the conditions laid down under the Scheme”. Thus the approval of the 3 Electoral Trusts (Swadeshi, Jai Hind and People’s Electoral Trusts), which have never received any contributions since their registration, should be withdrawn. 

The names of Electoral Trusts, currently, do not indicate the name of the Company/group of firms, which set up the Trusts. To have more transparency regarding details of corporates, which fund parties, it would be ideal to include the name of the parent company in the name of the Electoral Trust. The ADR suggests that those Electoral Trusts, which have not responded to and complied with the guidelines circulated by the ECI should be heavily penalized as indicated in the notification issued by the ECI to the Trusts. Similarly, all Corporates should make details of their political contributions available in public domain via their websites and in their annual  reports for the sake of transparency in politics.