Analysis of Contribution Report of Electoral Trusts for FY 2013-14
Introduction
The Central Government amended the Income
Tax Rules, 1962 on the 31st January, 2013 to insert Rule 17CA which lists
the functions of Electoral Trusts approved by the Central Bureau of Direct
Taxes (CBDT). The Central
Government, simultaneously, notified ‘The
Electoral Trusts Scheme, 2013’ which specified the eligibility procedure and format for registration as an Electoral
Trust. The amendment and the scheme were
introduced for the registration of Electoral Trusts whose sole purpose was to
fund registered political parties in a transparent manner. The notification
can be accessed here.
The Election
Commission of India (ECI) had circulated Guidelines for submission of contribution
reports of Electoral Trusts on the 6th
June, 2014 wherein instructions were
issued to all the Electoral Trusts
formed after January,’13 (hence approved by the CBDT), to submit an Annual Report containing the
following details to the Commission apart from an audit report in the format specified in the amended rules, in the interest of transparency:
1.
Details of contributions received by the
Electoral Trusts.
2.
Details of donations given by the Trust to
political parties.
These guidelines
were issued to 7 Electoral Trusts formed after January, 2013, and included Satya Electoral Trust, Pratinidhi Electoral
Trust, People’s Electoral Trust, Progressive Electoral Trust, Janhit Electoral
Trust, Bajaj Electoral Trust and
Janpragati Electoral Trust. Of the above 7 Trusts, Satya Electoral Trust is the
only Trust to submit its complete Annual Report to the ECI.
Janhit Electoral Trust, Pratinidhi Electoral Trust and Janpragati
Electoral Trust declared nil amounts received as donations during the FY
2013-14.
The
following report of ADR/ NEW analyses the details
of donors of Satya Electoral Trust and the contributions made by the Trust to
political parties during FY 2013-14.
Executive Summary
Five National
Parties, INC, NCP, BSP, CPI, CPM submitted their contributions statements,
above Rs 20,000, for the FY 2013-14 to the ECI. BJP is the only National Party which has not submitted its
contribution report. While BSP declared nil income above Rs 20,000, the total income of the four National
Parties from known sources of funding
was Rs 76.93 crores. But the total donations declared by Satya Electoral Trust to National Parties amounts
to Rs 81.87 crores (including donations to BJP).
1.
Format
for submission of contributions report by the Electoral Trusts to the ECI
a.
The Electoral Trusts are required to submit the
following 3 documents to the Election Commission of India:
i.
Annexure
aa.
Part A – Basic information of the Electoral
Trust
ab. Part B – Details
of contributions received in the financial year
ac. Part C – Details
of donations made by the Trust to political parties
ad. Part D – Verification
by a person authorized by the Trust
ii.
Audit report by a certified Chartered Accountant
iii.
Compliance certificates from Corporate donors
2.
List
of Electoral Trusts formed after 31st January, 2013
Based on the
information available with the Ministry of Corporate Affairs, a list of all
Electoral Trusts formed after January, 2013 and approved by the CBDT is given
below. Details of ownership of the Electoral Trusts were collected based on
media reports and research on directorships in other companies.
S. No.
|
Name of the Electoral Trust
|
Company/ conglomerate which set up
the Trust*
|
1
|
Janhit
Electoral Trust
|
Vedanta Group
|
2
|
Satya
Electoral Trust
|
Bharti Group
|
3
|
People’s
Electoral Trust
|
Reliance Group
|
4
|
Mahindra
Electoral Trust Company
|
Mahindra Group
|
5
|
Progressive
Electoral Trust
|
Tata Group
|
6
|
Paribartan
Electoral Trust
|
MP Birla Group
|
7
|
Bajaj
Electoral Trust
|
Bajaj Group
|
8
|
Triumph
Electoral Trust
|
Murugappa Group
|
9
|
Kalyan
Electoral Trust
|
Bharat Group
|
10
|
Janta
Nirvachak Electoral Trust
|
Kotak Group
|
11
|
Jagrut
Electoral Trust
|
Lodha Group
|
12
|
New
Democratic Electoral Trust
|
Mahindra Group
|
13
|
Samaj
Electoral Trust Association
|
KK Birla Group
|
14
|
Gauri
Welfare Association Electoral Trust
|
Jain Group
|
15
|
Sardar
Vallabhbhai Patel Electoral Trust
|
Sardar Vallabhbhai Patel Party
(Political Party)
|
|
|
|
1
|
Pratinidhi
Electoral Trust
|
Not known
|
2
|
Reformative
Electoral Trust of India
|
Not known
|
3
|
Bhartiya
Socialist Republican Electoral Trust
|
Not known
|
4
|
Harmony
Electoral Trust
|
Not known
|
5
|
Jankalyan
Electoral Trust
|
Not known
|
6
|
Janpragati
Electoral Trust
|
Not known
|
7
|
Ambar
Electoral trust
|
Not known
|
8
|
Swadeshi
Electoral trust
|
Not known
|
9
|
Ashmita
Electoral trust
|
Not known
|
* Details of ownership of the Electoral Trusts were collected based on
media reports, research on directorships in other companies and registration
address of the company/ Trust
3.
Contributions
received and disbursed by Satya Electoral Trust during FY 2013-14
a.
According to the rules formulated by the Central
Government, Electoral Trusts are required to donate 95% of their total income to registered political parties in a
financial year.
b.
Satya Electoral Trust received a total amount of Rs 85.406 crores from
corporates and individuals and distributed Rs
85.37 crores (99.96%) to various political parties.
4.
Contributions
made by Corporates
a.
Bharti
Airtel Ltd. contributed the maximum amount of Rs 28 crores which formed 33% of total donations to Satya Electoral
Trust followed by DLF Ltd. which donated Rs 20 crores and constituted
23% of total donations.
b.
Shri
Akhil Gupta, Vice Chairman of Bharti Enterprises and Executive Chairman of
Bharti Infratel Ltd. is the only
individual to contribute to political parties through Satya Electoral Trust. He donated Rs 2 crores (2% of total donations to Satya Electoral Trust).
5.
Total
contributions as a Group of Companies
a.
The parent companies of all the corporate donors
have been termed as Group of companies and is not a part of the submission made
by Satya Electoral Trust
b.
As Satya Electoral Trust was set up by the
Bharti Enterprises, the parent company donated the maximum amount of Rs 36 crores to be disbursed to political parties
and formed 42.16% of total donations to
the Electoral Trust.
c.
Donations from other groups of companies
include: Jubilant Bhartia Group – Rs
6.38 crores (7.47%); CK Birla Group
– Rs 4.003 crores (4.69%); Interglobe enterprises
– Rs 4.004 crores (4.69%) and KK Birla
Group – Rs 2.002 crores (2.34%).
6.
Donations
made by Satya Electoral Trust to Political Parties
a.
BJP, INC
and NCP were the three National
Parties to which Satya Electoral Trust made contributions.
b.
BJP was
the recipient of the maximum amount of
Rs 41.37 crores (48.44% of total donations to the Trust) followed by INC with Rs 36.50 crores (42.74% of donations to the Trust).
c.
SAD, RJD
and J&KNC are the three Regional
Parties to which the Trust made donations. SAD received Rs 2 crores
and RJD received Rs 1 crore.
Name of the
Political Party
|
Total
Donations disbursed to political parties (Rs. in crores)
|
% of
donations made from income of Trust
|
BJP
|
41.37
|
48.44%
|
INC
|
36.5
|
42.74%
|
NCP
|
4
|
4.68%
|
SAD
|
2
|
2.34%
|
RJD
|
1
|
1.17%
|
J&KNC
|
0.5
|
0.59%
|
Total
donations
|
Rs 85.37 crores
|
99.96%
|
7.
Direct
donations made by the corporates to political parties
a.
Apart from the donations by corporates to Satya
Electoral Trust, ADR/NEW analysed the donations by the same corporates who also
donated separately to political parties between FY 2004-05 and 2013-14.
b.
National
Engineering Industries Ltd. of C.K.Birla Group donated 5 times to INC and
BJP between FY 2004-05 and 2012-13. The company donated a total amount of Rs
87.50 lakhs to BJP and Rs 1.875 crores to INC.
c.
It is to be noted that National Engineering Industries Ltd. donated Rs 1 crore to INC directly and
Rs 2 crores to Satya Electoral Trust during FY 2013-14.
d.
GMMCO
Ltd. is the only other corporate which donated to Satya Electoral Trust but
had also made donations directly to political parties between FY 2004-05 and
2012-13. The company donated an amount of Rs 37.50 lakhs each to INC and BJP
during FY 2009-10.
Name of the
corporate
|
Political
party donated to*
|
Amount of
contribution
|
Financial
Year
|
National Engineering Industries Ltd.
|
BJP
|
Rs 37.50 lakhs
|
2009-10
|
BJP
|
Rs 50 lakhs
|
2012-13
|
|
INC
|
Rs 37.50 lakhs
|
2009-10
|
|
INC
|
Rs 50 lakhs
|
2012-13
|
|
INC
|
Rs 100 lakhs
|
2013-14
|
|
Total
|
Rs 2.75 crores
|
||
|
|
|
|
GMMCO Ltd.
|
BJP
|
Rs 37.50 lakhs
|
2009-10
|
INC
|
Rs 37.50 lakhs
|
2009-10
|
|
Total
|
Rs 75 lakhs
|
*BJP has not
submitted its donations report for FY 2013-14 hence donations from the above
corporates for FY 2013-14 cannot be verified
Recommendations of ADR
1. 6 Electoral Trusts had donated a total
amount of Rs 105 crores to the
National Parties between FY 2004-05 and 2011-12, before the transparency rules governing contributions to Electoral
Trusts were formulated by the Central Government. As the rules are not retrospective, these 6 Electoral
Trusts are not required to follow the
transparency rules and declare their donor details. Thus, details of donors
to these 6 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.
Therefore details of donors of Rs 105 crores donated
to political parties by the six Electoral Trusts which were formed before the
CBDT rules came into existence, should also be disclosed. These Trusts include General Electoral Trust, Electoral Trust,
Harmony Electoral Trust, Corporate Electoral Trust,
Bharti Electoral Trust and Satya Electoral Trust. Also, the same
rules which apply to those Trusts formed after 31st January, 2013,
should also apply to the above mentioned Trusts so as to improve transparency.
2.
The names
of Electoral Trusts, currently, do
not indicate the name of the Company/ group of companies which set up the
Trusts. In order to have greater transparency regarding details of
corporates which fund political parties, it would be ideal to include the name
of the parent company in the name of the Electoral Trust.
3.
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 to the Trusts.
For detailed report on the donations received by Satya Electoral Trust and the contributions made by the Trust to political parties during FY 2013-14, kindly refer to the attached report.
Contacts
Media and Journalist Helpline
+91 80103 94248
Email: adr@adrindia.org
|
Maj Gen Anil
Verma (Retd.)
Head
National
Election Watch and Association for Democratic Reforms
+91 8826479910
|
Prof Jagdeep Chhokar
IIM Ahmedabad (Retd)
Founder Member National Election Watch, Association for
Democratic
Reforms
+919999620944
|
Prof Trilochan Sastry
IIM Bangalore
Founder Member,
National Election Watch,
Association for Democratic Reforms
+919448353285,
|
--
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