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                          Analysis of Contribution Report of Electoral Trusts for FY 2015-16

Introduction

 

The Election Commission of India (ECI) had circulated Guidelines for submission of contribution reports of Electoral Trusts on the 6^th June, 2014 wherein instructions were issued to all the Electoral Trusts formed after January,’13 (and approved by the CBDT), to submit an Annual Report containing details of contributions received by the Electoral Trusts and disbursed by them to political parties in the interest of transparency.

These guidelines were issued to 7 Electoral Trusts formed after January, 2013, 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. These guidelines are being sent by the ECI to all Electoral Trusts formed since then.

14 out of the 18 Electoral Trusts, registered with the CBDT, submitted their contribution details for FY 2015-16 to the ECI of which only 2 declared to have received any donations during that year. The following report of ADR/ NEW analyses the details of donors of 2 Electoral Trusts formed after January, 2013 and the contributions made by the Trusts to political parties during FY 2015-16. For a detailed report on the Electoral Trusts Scheme launched by the Central Government, the subsequent circular of the ECI in this regard and ADR’s analysis of the donations report of the Electoral Trusts for the FY 2013-14 & 2014-15, please refer here and here.

Between FY 2013-14 and 2015-16, 6 registered Electoral Trusts donated a total of Rs 312.27 cr of which only 2 Electoral Trusts (Satya and Samaj Electoral Trusts) donated more than once. Total donations to political parties during FY 2013-14 was Rs 85.37 cr, during FY 2014-15: Rs 177.40 cr and during FY 2015-16: Rs 49.50 cr.

 

Executive Summary

 

1. Renewal of approval of Electoral Trusts

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” (emphasis added).

As Satya Electoral Trust was registered on 19^th December, 2013, a new application for renewal was submitted by the Trust to the CBDT and approved on 24th August, 2016. It is to be noted that Satya Electoral Trust was the only Electoral Trust to be registered by the CBDT in 2013.

2.Overview of donations received by registered Electoral Trusts between FY 2013-14 and 2015-16

1. 1. Out of the 18 registered Electoral Trusts, 14 Trusts have been submitting a copy of their Contributions report to the Election Commission, consistently, since their registration.
   2. There are 8 such registered Electoral Trusts who have declared not receiving any contributions since their registration.
   3. Bhartiya Socialist Republican Electoral Trust Association and Harmony Electoral Trust are the two Electoral Trusts who have not submitted a copy of their Contributions report to the ECI for FY 2015-16.

 3.Details of the donations received by Electoral Trusts, FY 2015-16

As per the letter dated 11^th Nov, 2016, sent by the CBDT to ECI on the updated list of Electoral Trusts, there are a total of 18 Electoral Trusts registered with the CBDT, 14 of whom had submitted the contributions report.

 

 

 

 

 

 

 4.Contributions received and disbursed by Electoral Trusts during FY 2015-16

1. 1. 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.
   2. Only Satya Electoral Trust and Samaj Electoral Trust declared receiving contributions during FY 2015-16. While the former received Rs 47.0015 cr and distributed Rs 47 cr to political parties, the latter received Rs 2.52 cr and donated Rs 2.50 cr to political parties.
   3. Electoral Trusts received a total amount of Rs 49.52 cr from corporates and distributed Rs 49.50 cr (99.96%) to various political parties.

 

 

5.Contributions made by Corporates to Electoral Trusts, FY 2015-16

 

1. JSW Steel Ltd contributed the maximum amount of Rs 25 cr to Satya Electoral Trust which formed 53.19% of the Trust’s total donations followed by Torrent Pharmaceuticals Ltd and Torrent Power Ltd. Each of which donated Rs 10 cr crores and constituted 21.28% each of total donations to Satya Electoral Trust.
2. Sutlej Textiles & Industries Ltd contributed the maximum amount of Rs 1 cr which formed 39.68% of total donations to Samaj Electoral Trust followed by Sil Investments Ltd which donated Rs 75 lakhs and constituted 29.76% of total donations to the Trust.

 6.Donations made by Electoral Trusts to Political Parties: FY 2015-16

1. 1. Satya Electoral Trust donated 95.74% or Rs 45 cr to BJP while Samaj Electoral Trust donated 39.68% or Rs 1 cr of its total income to BJP.
   2. The 2 Electoral Trusts made contributions to only 3 political parties which include BJP, INC and JDU.
   3. Out of total income of Rs 47,00,15,000, Satya Electoral Trust made contributions only to BJP (Rs 45 cr) and INC (Rs 2 cr) while Samaj Electoral Trust, with a total income of Rs 2.52 cr gave Rs 1.5 cr to JDU and Rs 1 cr to BJP.

Party	Total Donations disbursed by Electoral Trusts to political parties  - FY 2015-16 (Rs. in cr)		Grand Total
	Satya ET	Samaj ET
Donations received by Political Parties from Trusts
BJP	45	1	Rs 46.00 crores
INC	2	0	Rs 2.00 crores
JDU	0	1.5	Rs 1.50 crores
Total	Rs 47.00 crores	Rs 2.50 crores	Rs 49.50 crores

 

Recommendations of ADR

1. Before the transparency rules governing contributions to Electoral Trusts were formulated by the Central Government, 6 Electoral Trusts had donated a total amount of Rs 105 crores to the National Parties between FY 2004-05 and 2011-12. General Electoral Trust donated Rs 131.65 crores to 7 political parties during FY 2014-15It is to be noted that the rules are not retrospective and hence these 6 Electoral Trusts i.e. 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.

     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 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 31^st January, 2013, should also apply to the above mentioned Trusts so as to improve transparency.

 2. 3 registered Electoral Trusts, People’s Electoral Trust, Pratinidhi Electoral Trust & Janhit Electoral Trust have consistently declared receiving nil contributions for the past three financial years.

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” (emphasis added). Thus the approval of the 3 Electoral Trusts, who have never received any contributions since their registration, should be withdrawn.

 3. 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.

 4.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.

 5. All 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.