Press Release: Paribartan Electoral Trust declared a donation of Rs 3 cr to a party/parties through Electoral Bonds. The party name(s) is not declared.

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Jun 23, 2021, 2:31:58 AM6/23/21

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Press Release

Date: 23rd June, 2021

Analysis of Contribution Reports of Electoral Trusts for FY 2019-20

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 6^th 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.

14 out of the 21 Electoral Trusts, registered with the CBDT, submitted their contribution details for FY 2019-20 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 2019-20. 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 and 2018-19.

Complete reports in English & Hindi with details of all contributions received and disbursed by the Electoral Trusts during FY 2019-20 are attached.

Link on website: https://adrindia.org/content/analysis-contribution-reports-electoral-trusts-%E2%80%93-fy-2019-20

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).

12 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 2019-20

Out of the 21 registered Electoral Trusts, 14 trusts have been submitting copies of their Contributions report to the Election Commission, consistently, since their registration.
Satya/Prudent Electoral Trust is the only trust to submit its annual report for all 7 years, FY 2013-14 to 2019-20, declaring contributions received each year.
There are 7 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 2019-20

As per the response received from the ECI, dated 2^nd 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. 14 of whom had submitted their contributions 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.

Contributions received and disbursed by Electoral Trusts during FY 2019-20

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.
7 Electoral Trusts which have declared receiving contributions during FY 2019-20, have received a total amount of Rs 363.5151 cr from corporates and individuals and distributed Rs 362.9152 cr (99.83%) to various political parties.

Contributions made by Corporates and Individuals to Electoral Trusts, FY 2019-20

JSW Steel Ltd. contributed the highest amount worth Rs 39.10 cr amongst all donors of the Electoral Trusts, followed by Apollo Tyres Ltd. with Rs 30 cr and Indiabulls Infraestate Ltd which contributed Rs 25 cr, to various Trusts.
18 individuals have contributed to Electoral Trusts in FY 2019-20. 10 individuals contributed Rs 2.87 cr to Prudent Electoral Trust, 4 individuals contributed Rs 5.50 lakhs to Small Donations Electoral Trust and 4 individuals gave a total of Rs 1 lakh to Swadeshi Electoral Trust.
Top 10 donors have donated Rs 207.35 cr to Electoral Trusts, which forms 57.04% of the total donations received by the trusts during FY 2019-20.

Donations made by Electoral Trusts to Political Parties, FY 2019-20

Prudent Electoral Trust donated Rs 217.75 cr to BJP, in contrast to Rs 67.25 cr contributed in FY 2018-19, while Jankalyan Electoral Trust donated Rs 45.95 cr of its total income to BJP in FY 2019-20.
AB General Electoral Trust made contributions to only 2 political parties, namely BJP (Rs 9 cr) and LJP (Rs 1 cr).
BJP received Rs 276.45 cr or 76.17% of the total donations received by all political parties from Electoral Trusts followed by INC which received Rs 58 cr or 15.98%% of the total donations received by all parties from all Seven Electoral Trusts.
Other 12 political parties including AAP, SHS, SP, Yuva Jan Jagriti Party, Jannayak Party, JDU, JMM, LJP, SAD, INLD, JKNC and RLD received a total of Rs 25.4652 cr collectively.
Paribartan Electoral Trust is the only trust to declare donation of Rs 3 cr to a party through Electoral Bonds.

Observations of ADR

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.
50% of the 14 Electoral Trusts that submitted their annual reports for FY 2019-20 declared that they received nil contributions in that year. Between FY 2013-14 and 2019-20, 10 Electoral Trusts have declared that they have not received any donations since the year of their registration 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.
The contribution reports for FY 2019-20 of 7 out of 21 registered Electoral Trusts are not available on the website of the ECI, even after nine months since the deadline. These include Triumph E.T., Progressive E.T., New Democratic E.T., Janhit E.T., Harmony E.T., Kalyan E.T. and Upakriti E.T., The contribution report of Kalyan Electoral Trust was not even once available on the ECI website since its registration in September, 2016.
Paribartan Electoral Trust declared a donation of Rs 3 cr to a party/parties through Electoral Bonds. This is the first time that an Electoral Trust has declared giving donation to a political party/parties using the mode of electoral bonds and the party name(s) is not declared. This practice is against the spirit of the Electoral Trusts Scheme, 2013 and Rule 17CA of the Income Tax Rules, 1962 which make it mandatory for trusts to furnish each and every detail about the donor contributing to the trust.

Notification No. 8/2013, dated 31.01.2013 made an amendment to Income Tax Rules by inserting a new Rule 17CA which deals with the functions of electoral trust. These include:

(6) A political party registered under section 29A of the Representation of the People Act, 1951 shall be an eligible political party and an electoral trust shall distribute funds only to the eligible political parties.

(8) The trust shall obtain a receipt from the eligible political party indicating the name of the political party, its PAN, registration number, amount of fund received from the trust, date of the receipt and name and designation of person signing such receipt.

(10) (ii) The electoral trust shall also maintain a list of persons from whom contributions have been received and to whom the same have been distributed, containing the name, address and permanent account number of each such person along with details of the amount and mode of its payment including the name and branch of the bank.

Whereas Electoral Bond Scheme, 2018 only facilitates unfairness, anonymity and unlimited political donations, Electoral Trusts Scheme, 2013 on the other hand, mandates complete disclosure in the form of maintain books of accounts and other documents, receipt indicating the name of the political party, its permanent account number, registration number, details of amount received, mode of payment, details and list of persons from whom contributions have been received. Therefore, if Electoral trusts start adopting this precedent of donating through bonds, which do not permit disclosure norms and discourage transparency rules/laws then it is like going back in time before the Electoral Trusts Scheme, 2013 was incorporated. In such a scenario, it will be a complete mayhem of unfair practices i.e. total anonymity, unchecked and unlimited funding, free flow of black money circulation, corruption, foreign funding, corporate donations and related conflict of interest etc. Such a practice completely negates the very purpose behind the inception of the Electoral Trusts Scheme, 2013 and Rule 17CA of the I.T Rules, 1962.
Swadeshi Electoral Trust declared a donation of Rs 1 lakh from 4 individual donors during FY 2019-20. However, it did not disburse that amount to any political party that year.