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Ties that bind Congress leader Kamal Nath, industrialists Mukesh Ambani, Sunil Mittal
elections: poll expenses
Business As Usual
Corporates don’t really want to disclose donation details
COMMENTS PRINT
elections: poll expenses
The state elections rolled out smoothly, but it’s money power which ruled on the ground
Uttam Sengupta, Debarshi Dasgupta
Interview
The CEC is candid in admitting that more stringent electoral laws are required to fight the menace of money power
Uttam Sengupta
opinion
Time to end vote-buying, time to give legislators more say in govt
Narendar Pani

How Corporates Oblige

  • Money Through electoral trusts, as well as in cash
  • Travel Companies provide cars, buy new ones too
  • Aircraft Top corporates “lend” their planes, some keep airplanes exclusively for this purpose
  • Food & liquor Catering and liquor use is rampant
  • Hospitality Firms allow lavish use of company guesthouses

***

The practice of corporate sector funding in India’s elections is always looked at with suspicion. This increases when India Inc wants to establish a system where they are not forced to disclose how much they donate and to whom. Last month, industry body CII reportedly wrote to the government seeking exemption from full disclosures of business contributions to political parties. Coming from a top industry body, this has raised many eyebrows.

The CII, however, refused to comment on the issue or res­p­ond to Outlook’s queries. Ind­ustry insiders say some of its high-profile members had pushed for this, feeling that a total disclosure of amounts and beneficiaries would ident­ify them with some parties and could be detrimental to their interests.

There are many within the industry, though, who do not subscribe to this view. Says T.V. Mohandas Pai, chairman, Manipal Global Education, “It’s a very unhealthy statement from our business leaders. Why this fear of a vendetta? It also means that there is a quid pro quo and they fear people will come to know of this.”

Even some senior CII leaders have reservations. Says Bajaj Auto chairman and former CII president Rahul Bajaj, “If a company does not agree with this (disclosure norm), it is one thing, but if an industry association writes to the government saying that companies need not declare the details of their political donations, it is wrong. It’s supporting a lack of transparency.”

The demand for non-disclosure of donati­ons, say industry insiders, comes from the increasing trend by the companies of donating in cash and in kind, most of which is never accounted for. And the quantum of black money is huge considering that the expenditure limits set by the EC are way below what is actually spent in the polls.

It is learnt the government is now planning to remove the limit of funding by corporates to political parties. The limit was increased rec­ently from 5 per cent of a company’s average net profits of the last three years to 7.5 per cent under the new Companies Act, follo­w­ing recommendations of a parliamentary comm­ittee on finance. But will that stop the flow of black money? Unlikely, feel experts. “Today, elections are a game of black money coming from all kinds of sources,” says Bajaj. Market estimates say the cost of fighting Lok Sabha elections is anywhere between Rs 15-25 crore, depending upon constituency and the leader.

Companies happily oblige pol­itical parties and leaders (see box), a common practice being the arranging of private or company-owned aircraft for election use. A senior industrialist who owns a plane says, “Some people even maintain aircraft just for political part­ies. It’s a huge way of buying favours from political leaders.”

Many companies follow the practice of don­ating officially through their electoral trusts. The Tatas, Aditya Birla Group and Bharti Ent­erprises have their own electoral trusts. The new rules may make it mandatory for all com­panies to set up such trusts to fund pol­i­tical parties. But that will hardly stop the flow of black money. Bajaj sums it up best, “Very few large donations are given without expectations of a quid pro quo. People give money to keep a political party in good hum­our, and hope that they can ask for a favour if an opportunity arises.” As long as this view prevails, the taps will stay open.

COMMENTS PRINT
elections: poll expenses
The state elections rolled out smoothly, but it’s money power which ruled on the ground
Uttam Sengupta, Debarshi Dasgupta
Interview
The CEC is candid in admitting that more stringent electoral laws are required to fight the menace of money power
Uttam Sengupta
opinion
Time to end vote-buying, time to give legislators more say in govt
Narendar Pani
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