Press Release: 7 Electoral Trusts which declared receiving contributions during FY 2020-21, have received a total amount of Rs 258.4915 cr from corporates and individuals and distributed Rs 258.4301 cr (99.976%) to various political parties; The contribution report of Kalyan Electoral Trust was not even once available on the ECI website since its registration in September, 2016

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Apr 21, 2022, 2:52:47 AMApr 21
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Press Release
Date: 21st April, 2022  
 

Analysis of Contribution Reports of Electoral Trusts for FY 2020-21


Introduction

The Election Commission of India (ECI) had circulated Guidelines for submission of contribution reports of Electoral Trusts in Letter No. 56/Electoral Trust/2014/PPEMS on the 6th June, 2014 wherein instructions were issued to 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 and disbursed 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.

16 out of the 23 Electoral Trusts, registered with the CBDT, submitted their contribution details for FY 2020-21 to the ECI of which only 7 declared to have received any donations during that year. The following report of ADR analyses the details of donors of 7 Electoral Trusts formed after January, 2013 and the contributions made by the Trusts to political parties during FY 2020-21. 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 2013-14, 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20

Complete reports in English & Hindi with details of all contributions received and disbursed by the Electoral Trusts during FY 2020-21 are attached.


Link on website: https://adrindia.org/content/analysis-contribution-reports-electoral-trusts-fy-2020-21


Executive Summary

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).

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


Overview of contributions report received by ECI from registered Electoral Trusts, FY 2013-14 to 2020-21

  1. Out of the 23 registered Electoral Trusts, 14 trusts have been submitting copies of their Contributions report to the Election Commission, consistently, since their registration.

  2. Satya/Prudent Electoral Trust is the only trust to submit its annual report for all 8 years, FY 2013-14 to 2020-21, declaring contributions received each year.

  3. There are 8 such registered Electoral Trusts that have either declared not receiving any contributions or whose contribution reports have not been available on the ECI website, at all, since their registration. Refer to Detailed Report for complete list of Electoral Trusts and their status of submission of contribution reports.

Details of the donations received by Electoral Trusts, FY 2020-21

As per the response received from the ECI, dated 2nd December, 2019, to ADR’s RTI application on the updated list of Electoral Trusts, there are a total of 21 Electoral Trusts registered with the CBDT. Updated list of approved Electoral Trusts by CBDT on 08 September, 2021, there are two new Electoral Trusts registered with the CBDT.  16 of whom had submitted their contribution reports. Only 7 Trusts declared receiving contributions from various corporate houses and individuals.  Registrations of 4 Electoral Trusts namely, Bajaj Electoral Trust, Gauri Welfare Association Electoral Trust, Pratinidhi Electoral Trust and Bhartiya Socialist Republican Electoral Trust Association were not renewed.

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Contributions received and disbursed by Electoral Trusts during FY 2020-21
  1. According to the rules formulated by the Central Government, Electoral Trusts are required to distribute at least 95% of the total contributions received during the financial year along with the surplus brought forward from the earlier financial year to the eligible political parties before 31st March of the said financial year.

  2. 7 Electoral Trusts which have declared receiving contributions during FY 2020-21, have received a total amount of Rs 258.4915 cr from corporates and individuals and distributed Rs 258.4301 cr (99.976%) to various political parties.   
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Contributions made by Corporates and Individuals to Electoral Trusts, FY 2020-21 
  1.  Future Gaming & Hotel Services contributed the highest amount worth Rs 100 cr amongst all donors of the Electoral Trusts, followed by Haldia Energy India Ltd with Rs 25 cr and Megha Engineering & Infrastructures Limited which contributed Rs 22 cr, to various Trusts.

  2. 159 individuals have contributed to Electoral Trusts in FY 2020-21. 2 individuals contributed Rs 3.50 cr to Prudent Electoral Trust, 153 individuals contributed Rs 3.202 cr to Small Donations Electoral Trust, 3 individuals gave a total of Rs 5 lakh to Einzigartig Electoral Trust and 1 individual contributed Rs 1100 to Independent Electoral Trust.

  3. Top 10 donors have donated Rs 223.00 cr to Electoral Trusts, which forms 86.27% of the total donations received by the trusts during FY 2020-21.
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Donations made by Electoral Trusts to Political Parties, FY 2020-21
  1. Prudent Electoral Trust donated Rs 209.00 cr to BJP, in contrast to Rs 217.75 cr contributed in FY 2019-20, while Jaybharath Electoral Trust donated Rs 2.00 cr of its total income to BJP in FY 2020-21.
  2. Small Donations Electoral Trust donated Rs 3.31 cr to INC.  
  3. Prudent Electoral Trust donated to 7 political parties, including major parties like BJP, JDU, INC, NCP, RJD, AAP & LJP.
  4. BJP received Rs 212.05 cr or 82.05% of the total donations received by all political parties from Electoral Trusts.
  5. JDU received Rs 27 cr or 10.45%% of the total donations received by all parties from all Seven Electoral Trusts.
  6. Other 10 political parties including INC, NCP, AIADMK, DMK, RJD, AAP, LJP, CPM, CPI and Lok Thanthrik Jantha Dal received a total of Rs 19.3801 cr collectively. 

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Observations of ADR
  1. 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.

  2. 56% of the 16 Electoral Trusts that submitted their annual reports for FY 2020-21 declared that they received nil contributions in that year. Between FY 2013-14 and 2020-21, 8 Electoral Trusts have declared that they have not received any donations since the year of their registration or whose reports are not available in public domain while 6 Electoral Trusts have declared receiving contributions only once since registered. This raises a question on the continuation of registration of such electoral trusts that fail to fulfill their primary objective of distributing contributions received by them to the political parties concerned.

  3. The contribution reports for FY 2020-21 of 7 out of 23 registered Electoral Trusts are not available on the website of the ECI, even after five months since the deadline. These include Jankalyan E.T., Janshakti E.T., People's E.T., Upakriti E.T., Bhartiya Bhumi E.T., Harmony E.T. and Kalyan E.T. The contribution report of Kalyan Electoral Trust was not even once available on the ECI website since its registration in September, 2016.


Recommendations of ADR

  • Details of donors to these 6 Electoral Trusts remain unknown thereby leading to speculation on whether donations to these trusts were 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.

  • 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 (Jai Hind, Upakriti and People’s Electoral Trusts), which have never received any contributions since their registration, should be withdrawn.

  • 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.

  • 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.

  • 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.

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Hindi_Analysis of Contribution reports of Electoral trusts FY 2020-21.pdf
English- Analysis of Contribution reports of Electoral trusts - FY 2020-21.pdf
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