Press Release

Date: 28th Nov, 2018

Analysis of Contribution Report of Electoral Trusts for FY 2017-18

Introduction

 

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 issuedto 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 anddisbursed 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.

13 out of the 22 Electoral Trusts, registered with the CBDT, submitted their contribution details for FY 2017-18 to the ECI of which only 5 declared to have received any donations during that year. The following report of ADR analyses the details of donors of 5 Electoral Trusts formed after January, 2013 and the contributions made by the Trusts to political parties during FY 2017-18. 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, please refer here; FY 2013-142014-152015-162016-17.

 Complete report with details of all contributions received and disbursed by the Electoral Trusts during FY 2017-18 is  attached.

Executive Summary

  1. 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).

Ten Electoral Trusts submitted applications for renewal of the Trusts to the CBDT. Details of dates of renewal are available in the Detailed Report.

  1. 2.       Overview of Contributions Report received by ECI from registered Electoral Trusts, FY 2013-14 to 2017-18
    1. a.       Out of the 22 registered Electoral Trusts, 13 Trusts have been submitting copies of their Contributions report to the Election Commission, consistently, since their registration.
    2. b.      Satya/Prudent Electoral Trust is the only Trust to submit its Contributions report for all 5 years, FY 2013-14 to 2017-18.
    3. c.       There are 10 such registered Electoral Trusts that have either declared not receiving any contributions or have not submitted their reports, at all, since their registration. Refer Detailed Report for complete list of Electoral Trusts and their status of submission of contribution reports.
    4. 3.       Details of the donations received by Electoral Trusts, FY 2017-18

As per the letter dated 11th Oct, 2017, sent by the CBDT to ECI on the updated list of Electoral Trusts, there were a total of 21 Electoral Trusts. One more Electoral Trust, AB General Electoral Trust, was registered in 6th Dec, 2017 and the total now stands at 22 Electoral Trusts registered with the CBDT, 13 of whom have submitted their contributions report. Of these only 5 Trusts declared receiving contributions from various corporate houses and individuals.


Graph: Donations received by Electoral Trusts, FY 2017-18

4.       Contributions received and disbursed by Electoral Trusts during FY 2017-18

     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.      5 Electoral Trusts which have declared receiving contributions during FY 2017-18, have received a total amount of Rs 194.12 cr from corporates and individuals and distributedRs 193.78 cr (99.82%) to various political parties.


Graph: Total contributions received and disbursed by Electoral Trusts during FY 2017-18

5.       Contributions made by Corporates and Individuals to Electoral Trusts, FY 2017-18

    a.       Bharti Airtel contributed the highest amount worth Rs 25.005 cr amongst all donors of the Electoral Trusts, followed by DLF Ltd. With Rs 25 cr and UPL Ltd which contributed Rs 22 cr, to various Trusts.

   b.      Only two individuals, Mr. Anil Kumar Gupta (Rs 10 lakhs to Janshakti Electoral Trust) and Mr. Sat Paul Mahajan (Rs 11,000 to Janshakti Electoral Trust) have contributed to Electoral Trusts in FY 2017-18.

   c.       Top 10 donors have donated Rs 139 cr to Electoral Trusts, which forms 71.61% of the total donations received by the Trusts during FY 2017-18.


Graph: Top 10 donors to Electoral Trusts in FY 2017-18

6.       Donations made by Electoral Trusts to Political Parties: FY 2017-18

   a.       Prudent Electoral Trust donated Rs 154.30 cr to BJP while AB General Electoral Trust donated Rs 12.50 cr of its total income to BJP.

   b.      Electoral Trusts made contributions to only one political party each which includes NCP and JKNC.

   c.       Prudent Electoral Trust and AB General Electoral Trust are the only two, who have donated to 3 political parties each, BJP, INC and BJD.

   d.      BJP alone received Rs 167.80 cr or 86.59% of the total donations received by all political parties from Electoral Trusts. Other 4 political parties include INC, BJD, NCP and JKNC received only Rs 25.98 cr collectively.


Graph: Donations disbursed by Prudent Electoral Trust to political parties in FY 2017-18

Observations and Recommendations of ADR

Observation

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 2014-15 It 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.

 

Recommendations


1.       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 31st January, 2013, should also apply to the above mentioned Trusts so as to improve transparency.
 
2.       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 (Swadeshi, Jai Hind and People’s Electoral Trusts), which have never received any contributions since their registration, should be withdrawn by appropriate authority. 
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.

For Full Report >>Click here

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