Political parties earned a whopping Rs4,662 crore in seven years!

According to a study, over the past seven years, while Congress earned Rs2,008 mostly from 'selling coupons', major part of BJP's Rs994 crore income came through donations from corporates and trusts owned by major companies

New Delhi: Political parties in India have 'earned' a whooping Rs4,662 crore through donation and other sources since 2004 with the ruling Congress at the top with an income of Rs2,008 crore followed by BJP at Rs994 crore, two non-governmental organisations (NGOs) claimed, reports PTI.
Relying on the Income-Tax (I-T) returns and list of donors submitted to the Election Commission (EC) for the period 2004-2011, Association for Democratic Reforms (ADR) and National Election Watch (NEW) released a report on the income of 23 major parties.
They said the income of parties showed a steady growth since 2004. Congress' earnings went up from Rs222 crores in 2004 to Rs307 crores in 2011 as is the case with BJP.
The figures compiled by ADR and NEW show that Congress' income is Rs2,008 crores, mostly through selling of 'coupons', since it began heading a government at the Centre in 2004 till 2011 though the percentage of donations is just 14.42%.
On the contrary, 81.47% of BJP's total income of Rs994 crore in the past seven years came through donations from corporate houses and trusts owned by major firms, including London-listed Vedanta, the NGO said.
The NGOs said donations and voluntary contributions seem to be one of the major sources of income for most of the political parties and demanded more transparency in functioning of electoral trusts run by corporates and that political parties must be declared as public authorities.
"It is a black box of the political parties. Basic source of corruption in this country is political funding. By regulating political funding, we cannot end corruption, but can make a major dent," Prof Jagdee Chhokar, Founder member of ADR, told a press conference. 
Interestingly, General Electoral Trust (GET) of the Aditya Birla Group and Torrent Power Ltd has given donations to both Congress and BJP. While GET gave Rs36.4 crore as donations to Congress, it contributed Rs26 crore to the BJP's coffers, according to the report.
While national parties like Congress and BJP got donations from corporate houses and trusts, regional outfits like the DMK have received lakhs of ruppees as donation from its own partymen.
Surprisingly, the CPI(M)'s income from 2004-2011 is Rs417 crore, mostly contributions from individuals who have given less than Rs20,000 each, just behind BSP's Rs484 crore, while other major Left party, CPI, has earned only Rs6.7 crore. The SP's income, according to ADR, is Rs278 crores.
ADR and NEW said these figures were collected after a protracted battle with political parties and Income Tax Department through the Right to Information (RTI) Act.

Other major donators to Congress are Torrent Power Ltd (Rs14.15 crore), Bharti Electoral Trust of Airtel (Rs11 crore), Tata's Electoral Trust (Rs9 crore), Sterlite Industries (Rs6 crore, ITC (Rs5 crore), Adani Enterprises, Jindal Steel and Videocon Appliances.
Again, GET has been the major contribuor to BJP's income by donating Rs26 crore, followed by Torrent Power (Rs13 crore), and Public and Politial Awareness Centre, which the NGos claimed belong to Vedanta, (Rs9.5 crore).
Another interesting fact that emerged was Asianet TV holding gave Rs10 crore to BJP and Rs2.5 crore to Congress in the past seven years.
The NGOs also said 18 regional or state parties have never filed their contribution reports to the Election Commission since 2004. Prominent among them include National Conference of J&K, Trinamool Congress and INLD.
The income of other parties are NCP (Rs160 crore), AIADMK (Rs59 crore), SAD (Rs25 crore), National Conference (Rs21 crore), JD(U) (Rs26 crore), TDP (Rs53 crore), DMK (Rs40 crore), Trinamool Congress (Rs9 crore), Shiv Sena (Rs32 crore), LJP (Rs4 crore) TRS and RLD (Rs10 crore each), Forward Bloc (Rs98 lakh) and Sikkim Democratic Front (Rs92 lakh), the least among all.

While BSP has declared that it has not received any donations above Rs20,000, the CPI said its leaders AB Bardhan and D Raja contributed Rs65 lakh and Rs21 lakh, respectively by collecting donations from various sources.

The NGOs also alleged that some of the companies whose names have been cropped up in the mining scam have also contributed to the political parties.

It also alleged that FRCA rules have also been flouted by parties which received donations from foreign-listed companies.

During 2009-2011, the TRS has 99.98% of its income coming from donations followed by JD(U) and LJP.




4 years ago

While one has to agree that fighting election in India is 'expensive', the argument that electoral politics is the main source or 'reason' for corruption is misleading.Perhaps, greed and sense of insecurity of people who somehow reach certain positions end up in a tendency for such people to slice away assets that pass through them to their pockets. Corruption is a lifestyle disease which is curable hundred per cent. Like any other addiction, the people who get into it refuse to get out and trap in people around them also.

anantha ramdas

4 years ago

On "donations" made to various political parties, is there a way of finding out how much was cash and other forms of traceable payments like cheques, drafts etc?

A "donation" collector presumably dips his/her hand in the kity and maybe everyone concerned knows, but they dont talk about it, because, they "are in it, together".

what a way generate and pass the black money and make it white and "pure", shall we say?



In Reply to anantha ramdas 4 years ago

Thanks for your comment, Sir. May we request you to kindly check the document file in this story. From page 15 onwards, you will find the donations and payment mode.

Madhur Kotharay

4 years ago

One of my good friends who is pretty high up in a national political party told me that it costs about Rs 15-20 crores per seat to run the national elections. If a party is going to contest even 400 seats, they would need Rs 6000 crores just to compete the national elections, leave alone state assembly elections.

So Rs 1000-2000 crore is not really a whopping amount. In fact, it is pittance for a national party, given its cost structure. Calculate it per seat: 5000 volunteers, 1-3 months of campaign - their transport & food, hoardings, etc.

My friend hinted that the main cause of most corruption is this cost of running the electoral politics. He said that even the cleaner-appearing parties indulge in courruption some form or the other, just to survive. There is just no escape for anyone.

If anyone thinks that these tens of thousands of crores of bribes taken go just into politicians' pockets, they are mistaken. What use a politician has for one thousand crores if he cannot use it for himself or his family? Most people has no clue that it is practically impossible to spend 100 crore of black money for oneself. Try to think of a way of doing that without attracting some kind of scrutiny!

Electoral reforms will be a starting point if we want to curb the corruption.

Tech Mahindra: It's time has come, at last, says Espirito Santo Securities

With most of the operations being rationalised and just financial integration pending post-merger, is this a good time to buy the Tech Mahindra share? Yes, says Espirito Santo Securities

Barring announcement of large deals from BT (British Telecom), only to be downsized later, Tech Mahindra has had very few moments to cherish post the IPO (initial public offer) in 2006, says Espirito Santo Securities in its market update report. However, with Satyam now back into its groove (it is expected that there will be a 10% revenue growth in FY13E) and Tech Mahindra seeing traction in large deals, it is expected that there will be similar growth rates for Tech Mahindra as well. 
But with most of the operations being rationalised and just financial integration pending post-merger, is this a good time to buy Tech Mahindra? “We definitely think so” says Espirito Santo Securities.
Some of the concerns that investors commonly have in acquiring Tech Mahindra share are addressed below:
Concern #1: Revenue growth in Tech Mahindra will remain subdued: Without the Hutchison BPO deal, growth would have been in low single digits, but with this deal it is estimated that Tech Mahindra’s growth is at 10% in FY13. In FY14, Tech Mahindra can maintain revenue growth of 10% as AT&T, though a large account for Tech Mahindra, could easily grow by 10%. It is estimated that there are four more outsourcing deals in the pipeline from Europe which could materialise in H2FY13.
Concern #2: Revenue growth of Satyam is not sustainable: Espirito does not see downside risk to Satyam’s growth trajectory as: i) the company’s average revenue per client is only $4.2 million Vs $10 million for Infosys, implying plenty of opportunity to mine existing clients, ii) the company’s focus on mining the top 30 clients is easily workable as the top client contributes only $164 million in annual revenues while the next four contribute an average of $58m, which implies significant room for penetration Vs peers (70-80 clients are Fortune 500 clients). It is expected that there will be 10% growth in revenues n FY13E.
Concern #3: Consolidated margins are not sustainable: Tech Mahindra’s EBITDA margins fell from 23.8% in Q3FY10 to 15.3% in Q2FY12 due to: i) decline in realizations from the BT account, ii) higher growth in BPO, and iii) large deals with Etisalat and Sing Tel during the period. However, with i) significant declines in BT over with in the near term and room for growth in AT&T, and ii) cost rationalisation underway, and consequently, there are enough margin buffers at Tech Mahindra. Secondly, Satyam has margins of 21.7% and room to improve its bulge mix. Post the merger, it is believed that the company has ample buffers to manage margins.
Valuations are now cheap on a consolidated basis. It is estimated that there will be a consolidated profit of Rs1,840 crore in FY14 and earnings per share of Rs90, after extinguishing treasury stock, which is a 23% discount to HCL Tech.


With PHFI, falsification is the truth

The powerful Public Health Foundation of India, packed with corporate and government luminaries, has come up with dubious and contradictory information about its structure and formation when subjected to Right to Information scrutiny

In a significant decision dated 14th February, the Central Information Commission  (CIC) noted “with some dismay that the highest levels of public servants in India did not accept the citizen’s enforceable right to information in PHFI, despite the government substantially funding it and exercising some control”.


It was referring to Public Health Foundation of India (PHFI), a powerful body that has received generous land and funding from the central government to chalk out India’s public health policy. PHFI remained outside the purview of the Right To Information (RTI) Act 2005 for six years since its inception in February 2006 despite the presence of a galaxy of government luminaries including TKA Nair (Advisor to the PM) and Dr Montek Singh Ahluwalia (Deputy Chairman, Planning Commission) on its governing board. This writer had previously written a series of articles in Moneylife (Will PHFI be any different under Narayana Murthy?, Will PHFI become transparent and accountable under Narayana Murthy?, Mr Narayana Murthy, PHFI reply to questions about the authority and functioning of the organisation, and PHFI’s reply gives hope, not confidence) about PHFI’s structure, lack of transparency and conflicts of interest when it was headed by Rajat Gupta, the former McKinsey chief who quit after being accused of insider trading (he has since been convicted for securities fraud in the US and seems likely to serve a jail term).


The CIC ruling in PHFI’s case declared it a public authority under Section 2(h) of the act and ordered it to start complying with the law. Interestingly, the phrase “highest levels of public servants in India” used by the CIC may well apply to Prime Minister Manmohan Singh himself, who implanted PHFI into the heart of India’s public health policy and administration and described it as a “public-private partnership” (PPP). RTI queries however reveal a scandalous and deliberate lack of transparency in its creation and clearance.


Fabrication given away

In response to my RTI query on 5th July, Kalpana Swamy, the public information officer (PIO) at PHFI had sent me a document on 13th August that is wrong and contradictory to the point of being a forgery. The 5-page ‘Annexure B’, purportedly a photocopy of an officially certified document has strangely asynchronous information on something as simple as the composition of the governing council of PHFI as on 31 March 2006. The original document was ostensibly stamped and signed by president K. Srinath Reddy on 03 August 2006. But consider this:

(a) Dr RA Mashelkar who was Secretary, DSIR (Department of Scientific and Industrial Research) and Director General of CSIR (Council of Scientific and Industrial Research) in March 2006, has been listed as ‘CSIR Bhatnagar Fellow, National Chemical Laboratory’, which he became only after his retirement in December 2006.

(b) K. Sujatha Rao has been listed as ‘Former Secretary, Ministry of Health & Family Welfare’. Ms Rao retired from her post as Secretary of the health ministry in November 2010.

(c) Rajat Gupta – prime mover in the formation of PHFI and its chairman until March 2011 – is listed as ‘Former Partner, McKinsey and Co.’. However, according to publicly available information, he was Senior Partner at McKinsey & Co. in the year 2006.


There is more. While the ‘Annexure-B’ lists 24 persons as part of the governing body that came into effect on 27 March 2006, the same PIO at PHFI had earlier informed Kishan Lal, a Mumbai-based RTI applicant ,that “The Governing Council with 21 members came into effect on March 27, 2006”. (I had represented Kishan Lal before the CIC Shailesh Gandhi in that case -decision No. CIC/SG/C/2011/001273/17356)

The date of 27 March 2006 is important, because it is the eve of PHFI’s “launch” by Prime Minister Manmohan Singh. ‘Annexure-B’ lists four top bureaucrats − Nirmal Ganguly, Prasanna Hota, K. Sujatha Rao and R.K. Srivastava − as members of the PHFI board on 27 March 2006, even though there is nothing in the public domain that attests to the government authorizing these four to join the board on or before that date.

There are more such mysteries about the composition of the board and the contradictory information provided to the RTI query on13th August, but we will come to those later.


In a separate RTI query to the Union health ministry, I asked whether it recognized PHFI as ‘autonomous body’ and, if it did, whether the union Cabinet had approved its formation as an ‘autonomous body’. On 16th August, I received the CPIO’s response. Strangely, the ministry had forwarded my query to PHFI and sent me a reply labeled the “PHFI Response”. Needless to say it is full of misleading information.


The larger deception


The 14th February order subjecting PHFI to RTI scrutiny has exposed several uncomfortable facts, or downright deception.

For over six years the government has described the PHFI as a  “public-private partnership (PPP)”, an “autonomous body” or an “autonomous PPP” (a special coinage) – depending on its convenience – in formal statements to the Parliament and a parliamentary committee. For example:

* In mid-2006, PHFI was introduced as a PPP to the Parliamentary Standing Committee on Health and Family Welfare, which was considering a demand for grants (2006-07).

* On 24 November 2006, Panabaka Lakshmi, then minister of state for health, described PHFI as an “autonomous body” to the Rajya Sabha.

* On 31 August 2007, Lakshmi described PHFI as an “autonomous public-private partnership” while speaking in the Rajya Sabha.


RTI queries now reveal that PHFI was never intended to be a “PPP” or an “autonomous body” in the normal sense of those descriptors. Responding to another query by activist Kishan Lal, the health ministry not only denied the existence of any PPP initiated by the government in the health sector, but also the existence of any “PPP policy for the social sector, viz. education and health”. This matter was before the CIC too. Needless to say no contractual agreement was ever signed between the supposed ‘private partners’ and the supposed ‘public partners’ to form PHFI.


In other words, PHFI is not only a law unto itself, but is meant to be a durable, flexible, arrangement for powerful bureaucrats and corporate houses to use as convenient.

The claim that PHFI is an “autonomous body” seems more dubious. Responding to my RTI query on 16th August (which was forwarded to PHFI), the health ministry clearly said that “PHFI cannot be defined as an autonomous body”. But describing it as an autonomous body allowed it to obtain a massive “grant-in-aid” of Rs 65 crore approved as a “one-time contribution” to PHFI’s corpus on 06 July 2006. The government had never envisaged PHFI as an ‘autonomous body” because that would need to meet the very elaborate conditions laid down by the General Financial Rules 2005 (GFR 2005) for forming such bodies.


One of those conditions is a prior Cabinet approval, which was never obtained and never intended to be obtained. In fact, the so called “grant-in-aid” of Rs 65 crore was rendered illegal from the moment it was conceived because it was provided in violation of GFR 2005. As for “autonomous PPP”, this special coinage was merely to pull wool over the public’s eyes.


(PART -2 – More wool over public eyes – tomorrow)


(The writer is a Delhi-based freelance journalist who has written about PHFI in the past. He has written a formal complaint about forgery, in the form of first appeal, to PHFI. He has also sent letters of complaint to at least a dozen members of PHFI’s governing body, including T K Nair, Dr M S Ahluwalia, P.K. Pradhan (Secretary Health), Amartya Sen and Mirai Chatterjee, but has received no acknowledgement from any of them.)



nagesh kini

4 years ago

Is PHFI among the 85% "Bogus NGOs" listed by CAPHART?

nagesh kini

4 years ago

Is PHFI among the 85% "Bogus NGOs" listed by CAPHART?

Bhava Veerubhotla

4 years ago

can anyone elaborate accomplishments of PHFI

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