The investigation also found that at least 30 companies donated to the BJP, the ruling party, after raids by central agencies.
A three-part investigation carried out by Newslaundry, a reader-supported platform that serves as a media watchdog, and the News Minute, an independent digital platform catering largely to South Indian states, took the lid off two opaque sources of corporate funding to political parties.
Unlike the electoral bonds scheme that kept the Election Commission of India totally in the dark, the Electoral Trusts (ETs) do have to declare the name of donor companies to the ECI, but there is no transparency in how they distribute the fund among parties.
The investigation also found that at least 30 companies donated to the BJP, the ruling party, after raids by central agencies. These are some of the key findings of the joint investigation: The electoral bond scheme, struck down by the Supreme Court in February 2024 as unconstitutional, has not been the only source of corporate funding for political parties.
Another source is the Electoral Trusts (ETs) to which companies and individuals donate. The trusts then distribute the donations among political parties. The Congress received 19 paise for every 100 rupees that the BJP received from corporate bodies in 2022–23 through the ETs.
Out of the total Rs 850.4 crore donated to national parties in 2022–23, as much as Rs 719.8 crore went to the BJP alone, according to the Association for Democratic Reforms. In fact, the total money that Congress has received in the 10 years between 2013 and 2023 through ETs is less than the amount that the BJP received through the same scheme in just one year (2022–23).
The BJP received over Rs 1,893 crore in the 10 years from ETs between 2013 and 2023. ‘There is no clarity on how these trusts operate, or how they decide on the sums that each political party receives.
The monumental disparity in (partial) corporate funding for the two biggest parties in the fray for the 2024 General Elections raises questions about whether a fair playing field is even possible–and whether big corporations should have this large a say in how political parties perform in a democracy,’ Newslaundry reported.
Most of the funds received by the BJP have come from a single organisation—Prudent Electoral Trust, set up by the Bharti group. While the Tata Group’s Progressive Electoral Trust was the first to be set up in India in 1996, over the years, there have been at least 19 different ETs that have been set up, as per Election Commission of India (ECI) data.
Since 2020 however, it is only the Prudent Electoral Trust that has been collecting significant amounts of money. Prudent was earlier called Satya Electoral Trust, and was started by the Bharti Group in 2013. Except in its first year, Satya/ Prudent has consistently given a lot more money to the BJP than the Congress.
In 2019–20, Prudent gave Rs 218 crore to the BJP compared to Rs 31 crore to the Congress. In 2020–21, the numbers were Rs 209 crore for the BJP and Rs 2 crore for the Congress. In 2021–22, they gave Rs 337 crore to the BJP and Rs 15 crore to the Congress.
In 2022–23, Congress got no money from Prudent, whereas the BJP got Rs 256 crore. In 2022–23, the biggest contributors to the Prudent Electoral Trust were Megha Engineering and Infrastructure Ltd (MEIL) (Rs 87 crore); Serum Institute of India Pvt Ltd (Rs 50 crore); Bharti Airtel Ltd (Rs 10 crore); Medha Servo Drives Pvt Ltd (Rs 10 crore); and Medha Traction Equipment Pvt Ltd (Rs 5 crore).
Prudent also gave money to Bharat Rashtra Samithi in Telangana (Rs 90 crore) and YSR Congress in Andhra Pradesh (Rs 16 crore). Four of the top five donors are based out of Hyderabad. When the Newslaundry team visited Prudent Electoral Trust’s office on Bahadur Shah Zafar Marg in New Delhi, a receptionist, who introduced himself as Sanjiv, said director Mukul Goyal “does not meet anyone”.
“There are so many people like you who come every day,” he said, refusing to part with Goyal’s number and sharing his own email address instead. The nameplate on the office entrance read ‘Mukul & Ganesh Chartered Accountants’. ‘We reached out to Prudent Electoral Trust over email as well, asking them about how decisions are made on funds distributed to various parties. We have not received any response from them so far.
This article will be updated with their response if and when we receive one. We also reached out to several companies that have donated to Prudent, including MEIL, Serum Institute, ArcelorMittal, Medha Servo Drives, TVS group, but did not receive a response from any of them,’ the report reads.
The State Bank of India is expected to share (by 6 March 2024) all the details of electoral bonds sold and encashed since 2019. The Supreme Court of India directed the ECI to upload the details on its website by 13 March.
There is considerable interest in the list which may reveal the identity of companies including shell companies, loss-making companies and foreign-owned companies which may have funded India’s political parties. Such details were hidden from both voters and the ECI till now.
Meanwhile, the investigation by Newslaundry–News Minute revealed a disturbing pattern of raids by central agencies following which companies and business houses are seen to have donated to the ruling party, seemingly confirming the suspicion that there was a quid pro quo involved in political donations.
According to the government’s data shared in Parliament in February 2024, bonds worth over Rs 16,518 crore have been sold since 2018. From 2018 to December 2022, bonds worth Rs 1,000 denomination formed just 0.01 percent of the total sales while those worth Rs 1 crore made up 94.41 percent, according to an RTI response received by transparency activist commodore Lokesh Batra (retired).
These donations were most likely from corporate firms, hiding behind individuals or shell companies. The investigation revealed that at least 30 companies, which donated to the BJP between 2018–19 and 2022–23, faced penal action by central agencies, and 23 had never donated any amount to the BJP between 2014 and the year of the raid.
Four of these companies coughed up donations to the BJP within four months of the ED visit; and six companies, which were already donors to the party, donated heftier amounts in the months following the raids. Six other firms faced action by central agencies after they skipped donations in one financial year.
At least three donors, who are not part of the list of 30, have been accused of receiving undue favours from the Union government. Only three of these 33 companies donated to the Congress. Shree Cements, India’s third-largest cement producer based in Kolkata donated Rs 12 crore to the BJP in 2020–21 and 2021–22 but did not contribute any amount in 2022–23.
It was searched by tax sleuths in June 2023 in a raid described as vendetta by the opposition even as the IT Department accused the company of a Rs 23,000 crore tax evasion. Weeks after the tax raid, Shree Cements exited from the race to acquire Sanghi Industries—the company was eventually acquired by the Adani Group-owned Ambuja Cement.
The opposition had then accused the BJP of arm-twisting corporate rivals of the Adani Group. In January 2024, the IT Department demanded Rs 4,000 crore as arrears of tax and penalty from Shree Cements.
This is just one of the several case studies presented by the investigation carried out among others by Prateek Goyal, Kora Abraham, Nandini Chandrashekhar and Basant Kumar