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Analysis of Donations from Corporate & Business Houses to National Parties - FY 2016-17 & 2017-18(Known donations above Rs 20,000 only)

For complete report in English and the summary in Hindi, containing sector-wise in-depth analysis of donations received by National Parties between FY 2016-17 & 2017-18, kindly refer to the attached reports.

Introduction

Political parties are required to submit details of donors who have made donations above Rs 20,000 in a financial year (between 1st April and 31st March) to the Election Commission of India, every year. Parties provide details of the name, address, PAN, mode of payment and amount contributed by each donor who has made donation above Rs 20,000 in their submission.

Association for Democratic Reforms (ADR), in its report dated 8^th January, 2014, specified that various sectors of business houses in 8 years, between FY 2004-05 & 2011-12, donated a total of Rs 378.89 cr to National Parties, constituting 87% of the total contribution from known sources of political parties.
In its previous report dated 18^th August, 2017, ADR specified that various sectors of business houses in 4 years, between FY 2012-13 & 2015-16, donated a total of Rs 956.77 cr to National Parties, constituting 89% of the total contribution from known sources of political parties.
This report analyses the donations from corporates to National Parties between FY 2016-17 and 2017-18.
Political parties considered for the report are BJP, INC, NCP, CPI, CPM and AITC. Though a National party, BSP has not been considered for analysis in this report as the party has declared that it received no voluntary contributions above Rs 20,000 from any donor during this period as well as during the time period since 2004.
It is seen from the analysis that during the period 2016-18 various sectors of business houses donated a total of Rs 985.18 cr, constituting 93% of the total contribution to political parties from known sources. Donations from corporates to National Parties increased by 160% between FY 2004-05 to 2011-12 and FY 2016-17 to 2017-18.

Chart: Comparison of corporate donations to National Parties between FY 2004-05 and FY 2017-18

Executive Summary

1. Donations from Corporate/business houses

In FY 2016-17 and 2017-18, the 6 National Parties received a total of Rs 1059.25 cr via voluntary contributions above Rs 20,000 out of which 93% or Rs 985.18 cr was from corporates/ business houses alone.
Out of 6 National Parties, BJP received the maximum donations of Rs 915.596 cr from 1731 corporate donors followed by INC which received a total contribution of Rs 55.36 cr from 151 corporate donors, and NCP with Rs 7.737 cr from 23 corporate donors.
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.
CPI has the lowest share of corporate donations at 2%.

Chart: Percentage of Corporate Donations Received by National Parties, FY 2016-17 & 2017-18

2.Year-wise corporate donations to National Parties

It is observed from this analysis that various sectors of business houses, in 6 years between FY 2012-13 & 2017-18, donated a total of Rs 1941.95 cr or 91.17% of the total contribution from known sources of political parties amounting to Rs 2129.92 cr.
National parties have received the maximum corporate donations of Rs 573.18 cr in the FY 2014-15 (during which the Lok Sabha elections were held), followed by FY 2016-17 with Rs 563.19 cr and FY 2017-18 with Rs 421.99 cr.
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.
Donations from corporates to National Parties reduced by 25.07% between FY 2016-17 and 2017-18.
Between FY 2012-13 and 2017-18, BJP received the maximum corporate donations of Rs 1621.40 cr, constituting 83.49% of the total corporate donations in the six years.

Chart: Corporate donations received by National parties between FY 2012-13 and 2017-18

3. Top corporate donors to National Parties

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 Rs 429.42 cr.
BJP declared receiving Rs 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.
Bhadram Janhit Shalika Trust was the second highest corporate donor to BJP and INC, donating 10 times, a total amount of Rs 41 cr.
Details of top donors to the 6 National Parties between FY 2016-17 & 2017-18 is given in Annexure – 1.

Chart: Top 3 corporate donors to National Parties, FY 2016-17 and 2017-18

Chart: Top 10 corporate donors to National Parties, FY 2016-17 & 2017-18

4. Categorization of donors based on their type of businesses

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.
A total of Rs 985.18 cr was donated by all the corporate/ business houses to the 6 National Parties between FY 2016-17 and 2017-18.
Of this, Rs 22.59 cr was also received from the unsegregated category, which includes companies with no details available online or those with no clarity regarding the nature of their work.

Chart: Percentage share of donations from various business sectors to National Parties, FY 2016-17 & 2017-18

5. Sectors with top donations to National Parties

Between FY 2016-17 and 2017-18, Electoral Trusts were the biggest donors to the National Parties, contributing a total amount of Rs 488.42 cr.
Real Estate sector was the second highest overall contributor in FY 2016-17, contributing a total amount of Rs 49.94 cr. While in the FY 2017-18, Manufacturing sector was the second highest overall contributor with Rs 74.744 cr.
Between FY 2016-17 and 2017-18, BJP and INC received the maximum contributions from Electoral Trusts. BJP received the highest, Rs 458.02 cr, followed by INC with Rs 29.40 cr.
BJP received the highest donations from all 15 sectors including Manufacturing (Rs 107.54 cr), Real Estate (Rs 88.575 cr), Mining, construction, exports/imports (Rs 57.40 cr) etc.

Chart: Top 5 sectors with donations to National Parties, FY 2016-17 & 2017-18

Chart: Donations from top 3 sectors to BJP, INC and NCP, FY 2016-17 & 2017-18

6. Donations without PAN details and address

A total of 916 donations through which National Parties received Rs 120.14 cr do not have address details in the contribution form.
National parties have received Rs 2.59 cr from 76 donations which do not have PAN details in the contribution form.
98% of such donations without PAN and address details worth Rs 2.50 cr belong to the BJP.

Chart: Corporate donations to National Parties without PAN and Address details, FY 2016-17 & 2017-18

7. Unsegregated Donations

6 National Parties reported receiving 347 donations amounting to Rs 22.59 cr from corporate entities which have zero internet presence or if they do there is ambiguity about the nature of their work.
Contact and address details of most of these companies were unavailable in cases where they were visible online.
Such contributions have not been segregated into different sectors due to incomplete information.

Recommendations

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.
All donors who have donated a minimum of Rs 20,000 as a single or multiple donations should provide their PAN details.
Date on which the donation was made should be recorded by the party and submitted in Form 24A.
Any party which does not submit its donation statement to the ECI on or before 31^st Oct should be heavily penalized and its income should not be tax-exempted.
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 contributions reports must be returned to the parties by the ECI, to deter them from providing incomplete information.
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.
Annual scrutiny of donations reports of National, Regional and unrecognized parties should be initiated by a dedicated department of the CBDT, to discourage donations from shell companies or illegal entities.