Firms Give Big Backing to Indian Politics

काठमाण्डु टुडे २०७० पुष २९ गते ३:३९ मा प्रकाशित

Indian PoliticsWhich Indian businessman has previously claimed not to be a big fan of Indian politics? Answer: Ratan Tata, the former chairman of one of the world’s best-known Indian companies.

Still, his firm is among dozens of Indian conglomerates pumping millions of dollars into political campaigns across India each year. And unlike billion-dollar American companies who either lean left or right, big firms here extend support – at least monetarily – to both the secular Congress and the right-wing Bharatiya Janata Party, the two largest parties in India.

That was one of the several findings by Association for Democratic Reforms, a New Delhi-based think-tank, which recently analyzed documents detailing donations in the run-up to federal polls this year.

ADR, through analysis of documents submitted to the Election Commission of India, estimated that the two parties had collectively raised about 4.13 billion rupees ($66 million) from the start of 2004 through 2012, the vast majority of which, 3.64 billion rupees ($58 million) or about 88%, came from Indian corporations.

India is expected to go to polls in May and parties likely to rely heavily on donations for funding. Although much is widely known to be off the books, according to ADR, a breakdown of public donations shows that business is one of the largest funding sources for both parties.

The country’s bureaucracy has often been dubbed a nightmare for businesses, with “widespread corruption and fickle regulations” making business a “frustrating and expensive” affair, as this Hong Kong-based consultancy notes. But that hasn’t deterred corporate houses from donating to political parties who, when in office, implement and introduce legislative red tape.

“Companies obviously want to be in the good books of both parties,” Anurag Mittal, who headed research for the ADR report, said about the corporates’ decision to fund parties with opposing ideologies. “They’re playing it safe; they want their businesses to remain intact irrespective of whoever comes to power,” he added.

The Congress, which swept national polls in 2004 and 2009, received 1.87 billion rupees ($30 million) in donations between 2004 to 2012. About 1.72 billion rupees ($27 million), or 92% of these funds, came from business houses.

Meanwhile, the BJP generated marginally more, raising 2.26 billion rupees ($36 million) in the same period. But the conservative Hindu party, which boycotted recentproposals to attract foreign investors, wasn’t quite as popular in the business world. Around 85% or 1.92 billion ($31 million) of donations to the party came from corporations.

The General Electoral Trust, part of the $40 billion Aditya Birla Group, was the largest benefactor for both parties. From 2004 through 2012, the trust donated more than 600 million rupees or $9.6 million. More than half, 364.1 million rupees, went to Congress and the remaining 265.7 million rupees to the BJP.

Bharti Enterprises, which owns Airtel, the largest cellular service provider in India by connections, was another big political donor. Through checks from its Bharti Electoral Trust, the firm donated 110 million rupees ($1.6 million) to Congress and 61 million rupees ($985,150) to the BJP from 2004 through 2012.

Meanwhile, Tata Sons, a company founded by Ratan Tata’s great grandfather, donated nearly 100 million rupees ($1.6 million) to Congress and 68.2 million rupees ($1.1 million) to the BJP. Both payments were routed through the company-run Electoral Trust.

Indian engineering company Larsen & Toubro, consumer electronics giant Videcon Industries Limited and car-maker Mahindra & Mahindra were a few other high fliers to donate millions of rupees to the two political parties in the period analyzed by ADR. Unlike most conglomerates, these firms didn’t wire payments through their trusts.

Market observers say corporate donations could swing in favor of the BJP if Narendra Modi, the party’s prime ministerial candidate, is voted to power this year. Mr. Modi is credited for spearheaded pro-business and investor-friendly policies in the western state of Gujarat, where he has served as chief minister for over a decade.

Source The wall street Journal

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