Click to play videoThe Central Information Commission passed a landmark judgment a few days ago: it said that political parties’ accounts filed with the Income Tax department can be accessed by the public.
Political parties never have had to put up their balance sheets for public scrutiny. Each election they brazenly flout electoral norms on spending and never explain where their money is coming from.
Kupendra Reddy is a real estate developer in Bangalore and a major player in the city’s booming real estate business. Reddy is also the Congress candidate from Bommanahalli in the Assembly elections.
Reddy is one of the richest first-generation entrepreneurs in Bangalore, owning assets worth Rs 131 crore. He has Rs 49 lakh in cash and Rs 61 lakh in bonds and debentures.
He owns non-agricultural land worth over Rs 11 crore and commercial and residential buildings valued at over Rs 56 crore. His wife Pushpawati has assets worth Rs 54 crore in her name.
Does his immense wealth influence his politics? Reddy says no “I can earn a lot (and) I have already earned but as a politician I cannot earn. A politician can earn in business or on in real estate can earn but in politics they have to serve people,” says Reddy.
The real estate sector is estimated to have spent Rs 2,000 crore in south Karnataka this election and in north Karnataka the mining industry has pumped in as much as Rs 3,000 crore—a record-breaking violation of electoral norms on spending.
Chief Election Commissioner N Gopalaswami says he knows well that parties are “breaching” rules. "I don't have any illusion that only a small section of the political class will be confining itself to the limits. I don't think others are,” says Gopalaswami.
“To the question on how much breach they make, sometimes it is two times a breach and sometimes 10 times but there is a breach,” he says.
Politics and business make a deal
Parties spend and business funds them. Contribution reports filed by political parties before the Election Commission show that industry is a major contributor of funds.
The Congress, between 2004 and 2006, received a bulk of its funds from industrial houses. Ranbaxy Labs gave it Rs 25 lakh, SRF Ltd. Rs one crore, Bharat Forge Rs one crore, Mahindra and Mahindra Rs 75 lakh, Bajaj Auto Rs one crore, Hero Honda Rs 25 lakh, Larsen and Toubro Rs one crore and PSL Ltd Rs one crore.
Congress treasurer Motilal Vohra, who has been managing the party’s funds for many years, insists not everyone can make a donation to his party. “We write to (companies) and tell them that elections are going on and we need funds. That is the practice which has been going on for a long time,” says Vohra.
A major chunk of the BJP’s funds between 2003 and 2006 came as contributions from the Maharashtra builder lobby. Mumbai-based Infrastructure Ventures India gave the party Rs 10 lakh, Shree Naman Developers Rs 2.5 lakh, Delwadia Developers Rs 2 lakh and Sesa Goa, Shivam Ispat and Mangal Iron made contributions worth Rs 6 lakh.
Fund-raising is delicate business and naturally BJP treasurer Ram Das Agarwall is uncomfortable with the idea that his donors’ identities should be made public.
“Secrecy is necessary for a donor. If I am funding somebody then I would like that the BJP doesn’t know what I am giving to the Congress and the Congress shouldn’t know what I am giving to the BJP,” he says.
Funding the Congress or the BJP is not good business sense though. In today's era of close-call elections, industrial houses make sure their positions are protected and so they fund several parties.
Naveen Jindal is a Congress MP, the managing director of Jindal Steel and the man credited for winning for every Indian the right to fly the national flag.
Jindal is a shrewd businessman. His company has funded both the Congress and the BJP even after his election to the Lok Sabha.
“What is wrong? Rather than giving bags full of cash, if a company is above board and giving money to political parties everybody must appreciate that” says Jindal.
Officially, the Congress got Rs 5.96 crore and the BJP Rs 3.61 crore in 2005-2006. That is a pittance compared to what is needed to fund election campaigns across the country but you will never know what is the real money with parties.
The Election Commission cannot force parties to file contribution reports, nor question the details they reveal. The Nationalist Congress Party, the Shiromani Akali Dal and the Bahujan Samaj Party often don’t submit documents on their funds source.
The Samajwadi Party doesn’t mention the dates on which it received cheques or the addresses of contributors; neither does it explain how its district presidents manage to cough up such huge amounts of cash
Right to Information (RTI) responses show that in 2003-2004, SP’s Etah president paid Rs 66 lakh in 10 demand drafts to the party. The party's Gonda president contributed Rs 11 lakh and its Mainpuri president gave nearly Rs 38 lakh.
The Election Commission admits that what parties reveal about their contributions is perhaps just a fraction of the real money. “We are aware of what is filed with us and then we give a certificate. That amount, we presume, will be reflected in the Income Tax return but beyond that, whether that is only a part of the amount or full amount, we would not be in a position to say,” says Gopalaswami.
With an average of three state elections each year, parties are always in need of funds. Privately, political leaders reveal how Chief Ministers can be called in the middle of the night to make sure funds reach the campaign headquarters in a poll-bound state.
A chief minister's worth sometimes depends on his or her fund-raising strength. But when a big business house is willing to finance a party, the chief minister could simply be a bystander.
It is an open secret that all parties accept contributions, says former BJP president Bangaru Laxman, who had to resign after being caught accepting money in a TV sting operation.
Laxman says the money was for the party. “People laugh at me for taking Rs 1 lakh; they say it is hardly enough for any party,” he says.
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