Vedanta funding can land Congress, BJP in a soup
Civil society group ADR makes case for keeping political parties under transparency law
Ashish Mehta | new delhi | September 13 2013
The Congress and the BJP have been receiving huge amounts in funds from Anil Agrawal’s London-based Vedanta Group through its subsidiaries in India, raising questions from a civil society group over the alleged foreign funding of the political parties.
Between 2003-04 and 2011-12, three Vedanta Group firms – Sterlite Industries India Ltd, Sesa Goa Ltd and Solaries Holdings Ltd – have contributed a total of Rs 9.78 crore to the Congress. During the same period, the BJP has been more fortunate, receiving a total of Rs 19.41 crore from two firms – Vedanta Madras Aluminium Ltd, Sesa Goa Ltd – and a curious entity called Public and Political Awareness Trust (which alone has given BJP Rs 14.50 crore), which has also been traced to be part of the Vedanta conglomerate.
This information has been dug out by the Association of Democratic Reforms (ADR) from the income-tax returns of the two major political parties. The only dubious part is that under sections 3 and 4 of the Foreign Contributions (Regulation) Act [FCRA], 1976, political parties are not permitted to accept contributions from foreign companies or companies in India controlled by foreign firms. ADR has filed a PIL in Delhi high court in this respect.
The Vedanta payments, as well as payments from trusts formed by corporate groups like Aditya Birla, Tata and Bharti, form the ‘known’ part of income generated by political parties. [The trusts include harmony Electoral Trust, Corporate Electoral Trust and Satya Electoral Trust which have been supporting the two parties handsomely, and yet it is not clear who have set them up.]
The fact that Anil Agrawal, whose mining project in Odisha’s Niyamgiri has been opposed by the tribals there, has been making payments to the BJP and Congress might seem shocking but – barring the FCRA tangle – there is nothing irregular about it. All the payments are in cheque.
The really shocking part is that no one knows – and there is no way to know – who or what is the source of 75 percent of the total income of six national parties, Trilochan Sastry and Jagdeep Chhokar, two of the founding members of ADR, said at a media briefing here Friday.
Over the past eight years, the six national parties – Congress, BJP, BSP, NCP, CPI, CPI(M) – have received a total of Rs 4,895.96 crore. Less than one-fourth of it is from known sources – for example, contributions from well-wishers like Anil Agrawal and membership fees – but 75.05 percent of it is from sources only they know of.
This is so because the political parties, which receive tax breaks among other privileges, are not required to reveal the sources of payments of less than Rs 20,000. Parties seem to be exploiting this loophole and dishing out ridiculous figures in their declarations to the election commission. Thus, between 2004-05 and 2011-12, the Congress got a staggering Rs 1,951.07 crore (82.5 percent of its total income) from ‘unknown sources’. The party would like us to believe this amount came from people who could not shell out more than Rs 20,000 to support the party. At a token rate of Rs 20,000, the party has got 9.75 lakh such well-wishers, ADR has calculated.
In the murky world of political funding, all parties seem to be in the same range, except for the two communist parties. For CPI, only Rs 1.47 crore (or 14.7 percent of its income) is from unknown sources, while for CPM it is 53.8 percent. For BJP, BSP and NCP, the unaccountable portions of incomes come to 73 percent, 61.8 percent and 91.58 percent.
FOR DETAILS OF PARTY FUNDING: See attachments
FOR MORE ON ADR: visit adrindia.org
READ PROF CHHOKAR’S ARTICLES ON ELECTORAL AND POLITICAL REFORMS here
ADR said in 40 countries, including Nepal and Bhutan in our neighbourhood, political parties are expected to account for every penny they receive in donations – down to the counterfoil of the coupons of small amounts.
While the election commission has recommended lowering of the Rs 20,000 cut-off, political parties have stoutly resisted amending the law.
Sastry and Chhokar said the figures “strain credulity”. More importantly, there is no way anybody can find out anything about those unidentified sources. Even as transparency is expected everywhere else, and even a small-time NGO or a salaried employee is supposed to explain all sources of income, political parties are one exception.
Indeed, parties are an exception to all rules and laws. The larger point ADR made with its detailed analysis of “sources of funding of national political parties” is that application of the RTI Act to political parties, as ruled by the central information commission (CIC) in a June verdict, is a necessity even as a modest step in subjecting them to transparency. Though parliament could not pass the necessary amendments to shield parties from the RTI Act, the government and the opposition have maintained that they are “committed” to doing so.
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