Corporates want end to demands for election funds

March 30th, 2009 - 2:49 pm ICT by IANS  

Bharatiya Janata Party By James Jose
New Delhi, March 30 (IANS) The election bugle has resulted in India Inc’s cup of woes overflowing. Industrialists complain, mostly privately, that political parties have begun clamouring, coaxing and sometimes even threatening them to cough up for “party funds”.

It is a well-established fact that during elections, candidates and parties in India are largely funded by money that is not accounted for. While orporates have been hesitant to share such details, instances of arm twisting by parties or candidates are not uncommon.

Most members of the corporate sector prefer to remain quite, but Bajaj Auto chairman Rahul Bajaj and Tata Communications chief Subodh Bhargava were quite vocal recently. They said enough was enough and wanted an end to use of black money for elections.

“There is a lot of black money involved,” said Abhay Firodia, chairman of Force Motors, which makes commercial vehicles and tractors. “Political parties would not like to account for the money received as funding for elections,” Bhargava told IANS.

Industrialists felt the problem also had to do with the limits set on election spending.

Under the present laws, a candidate can spend Rs.10-25 lakh in a parliamentary poll and from Rs.5-10 lakh in an assembly poll. Details of the spending also have to be filed with the Election Commission.

But that is certainly not the amount the candidates of the parties end up spending, as revealed by a recent analysis by the Centre for Media Studies, a city-based think tank that analyses communications and media trends in the country.

“Our studies say that the total expenditure for the upcoming Lok Sabha elections will be around Rs.10,000 crore ($2 billion). The Election Commission’s expenditure alone will be about Rs.1,200 crore ($240 million),” said N. Bhaskara Rao, founder of the centre.

“But out of this Rs.10,000 crore, a fourth would be financed by unaccounted money. The two national parties - the Congress and the Bharatiya Janata Party - alone will spend up to Rs.1,000 crore in all,” Rao told IANS.

He said parties across the world spend money during elections on publicity, surveys, campaigning, vehicles and aircraft. But in India there was also the phenomenon - “cash for vote”, where candidates or parties lure the potential voter with money.

The Associated Chambers of Commerce and Industry of India, a leading industry lobby, says it has a solution to curb this menace - approval for state funding of elections and legislation to improve transparency.

“There should be legislation according to which election funding should be legalised through budgetary allocations and corporate donations for which income tax exemption should be extended to industry,” said the chamber’s secretary general, D.S. Rawat.

At the same time, some industry leaders felt that the corporate sector, too, can bring about a change by insisting on paying money to parties only through legal channels and denying any demand for cash payment.

“Corporates should make payments only through cheque or give money to registered trusts that fund electoral campaigns,” said J.J. Irani, veteran industrialist and director of Tata Sons, the holding arm of one of India’s biggest corporate houses.

“As a group, Tatas don’t give money to any particular politician or party. But we have a Tata Elections Trust, which gives money to parties, provided certain conditions are met. That too we only pay through cheque.”

Political parties, by and large support state funding of elections, but feel the ground reality today comes in the way.

“Yes! state funding of elections will prevent black money from entering the system and promote meritorious candidates. Our party is very much for it,” said Bharatiya Janata Party vice president Mukhtar Abbas Naqvi.

“But it is not happening because this is a coalition era where there are many regional and unregistered parties that cannot be financed. If the government starts funding everyone, it will involve a huge cost.”

(Anuradha Shukla and Pupul Dutta also contributed to the report. They can be reached at

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