How Corporates Oblige
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.
Corporate funding and Black money! Whither Democracy!
Corporate decides the Cabinet minister in India!
So 'business goes as usual'
This is an important story, understandably under-reported by the mostly corporate owned media. If seemingly minor changes in government policies and commercial laws can bring windfall profits, it's hardly surprising that the corporates will always be desperate to keep the government on their side. So they have to fund all parties - since the ordinary public could not be trusted - to reduce the risk democracy poses to them.
An ordinary citizen may have just one vote every five years, but the corporates have PR agencies, money and legal muscle to lobby the governments quietly. And many of our netas, of course, find it hard to resist the temptation: apni dosti bani rahe.
VNK Murthi >> Corporate decides the Cabinet minister in India!So 'business goes as usual'
The greater danger is CORPORATES owning the Media. In democratic India, we do have parties that are not corporate funded (you know them) and voters can choose them.
But what about Media, every leading Media house is owned by a Corporate House. Good example is OUTLOOK, owned by a billionaire businessman with business interests in Real Estate, hospitality, insurance, car batteries, plastics, infrastructure , ceramic tiles. Is this not a THREAT TO A FREE AND INDEPENDENT MEDIA, that any democracy would need?
69 Ramki Sir
Why single out OUTLOOK.
Atleast they exposed Radia tapes in which
the cabinet minister was decided by corporates.
And How many corporates back a PM candidate ?
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