Black Money : Political As Well As Non Political Organisations Also Have A Lion`S Share!
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Black money : political as well as non political organisations also have a lion`s share!

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Black money seems not to be the monopoly of the corporate as political as well as non political organisations also have a lion`s share!

Troubled Galaxy Destroyed Dreams, Chapter: 825

Palash Biswas

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Donations for political apolitical organisations in India lacks transparency and it is never regulated.Non political organisations tend to practice money laundering and extortion even on the expiry of registration. They continue the donation business thanks to these cash machines all on the name of ideology and mission, say social change or liberation without any valid permission, without filing income tax return. The economic offences in this field remain unabated. Several organisations  engage themselves in free for all extortion with same registration number. The leaders of these organisations never see any change for decades and assets created on personal names and the followers are blinded in either personality cult or caste or community identity and so called ideology. Intense hate campaign is also excellent tool to mobilise resources.No one questions against this blatant economic offence committed so often and sustained without any fear of law. Black money seems not to be the monopoly of the corporate as political as well as non political organisations also have a lion`s share!If ‘reforms' is the buzz word, then electoral reforms should be on top of the list, and the funding of political parties foremost among them.

In a detailed analysis of the Income Tax returns filed and donations received by the political parties, the National Election Watch and the Association for Democratic Reforms have raised several questions on the lack of transparency regarding the source of funds that the parties claimed to have received in the past years.Money laundering is abundant in Indian Politics. On the other hand, apolitical organisations also lack transparency from top to bottom.

Ten main political parties of the country had a whopping Rs 2,490 crore of tax-exempted income in the last five years, according to information from the Income Tax department through an RTI plea.
Of this the ruling Congress and the main Opposition party BJP have cornered more than 80 per cent. The figure could be higher since the political parties’ income figures between 2007-08 and 2011-12 received from the Income Tax department through an RTI plea does not incorporate the large number of small donations or income below Rs 20,000.Only 11.89 per cent of the Congress income and 22.76 per cent of the BJP income in the 2009-10 and 2010-11 financial year have come from donations received in excess of Rs. 20,000, the two parties have claimed in contribution reports submitted to the Election Commission of India.

Congress and BJP on Monday defended receiving donations from party workers and other sources as two NGOs released a report that said political parties in India have ‘earned’ over Rs 4,662 crore since 2004.

The Congress had a tax-exempted income to the tune of Rs 1,385.36 crore, more than double of the BJP, which recorded an amount of Rs 682 crore.

The report by Association for Democratic Reforms and National Election Watch, which relied on the IT returns and list of donors submitted to the Election Commission for the period 2004-11, said Congress’ income was Rs 2,008 crore while BJP earned Rs 994 crore.

Congress spokesman Manish Tewari said the party would comment only after going through the report, but a senior leader defended the donations, saying there was nothing “illegal or unethical.”

Echoing same sentiments, BJP spokesman Shahnawaz Hussain said the party receives funds from its workers through a “transparent system of fund collection.”

The NGOs said donations and voluntary contributions seem to be one of the major sources of income for most political parties and demanded more transparency in functioning of electoral trusts run by corporates added that political parties must be declared as public authorities.

BJP ally JD(U)’s tax free income in this period except for the year 2008-09 has been Rs 15.51 crore.

Mayawati’s BSP recorded an income of Rs 147.18 crore in three financial years 2007-08, 2008-09 and 2011-12. The party filed incomplete return in 2009-10 and had no tax-exempted income in 2010-11.

Sharad Pawar’s NCP had a tax-exempted income of Rs 141.34 crore in the five-year period.

According to the information provided by the IT department, CPI(M) recorded an income of Rs 85.61 crore in four years in this period while it had nil income in 2008-09.

CPI’s income in 2008-09 and 2009-10 is pegged at Rs 28.47 crore.

JD(S) had an earning of Rs 7.16 crore in 2009-10 and 2010-11 while Ram Vilas Paswan’s LJP had a tax-exempted earning of Rs 2.55 crore in four years from fiscal 2007 to fiscal 2011.

Lalu Prasad’s RJD earned Rs 2.85 crore in three years from fiscal 2008 to fiscal 2011.

The information came through a petition filed by Hisar-based RTI activist Ramesh Verma before the IT department.

Political parties are exempted from tax on their income through section 13(A) of IT Act 1961. However, they have to maintain a book of account for donations or income above Rs 20,000.

The Central Information Commission (CIC) in November 2012 said it will seek a report from Income Tax department and Directorate of Estate regarding tax exemptions claimed by political parties and their assets to ascertain whether there is enough indirect funding from the government to bring them under the ambit of RTI Act.

According to the I-T returns filed by various parties and contribution reports submitted to the EC which are accessed by these two organisations through the Right to Information Act, the top five parties with the highest income between 2004-05 and 2010-11 were: the Congress with Rs. 2,008 crore, the BJP - Rs. 994 crore, the BSP – Rs. 484 crore, the CPI(M) – Rs. 417 crore and the SP – Rs. 279 crore.The Hindu reports.

While donations and voluntary contributions accounted for a major source of income, donations from named contributors (those who donated more than Rs.20,000 and are to be mandatorily declared) formed a very small percentage of the total income of the parties.

For 2009-10 and 2010-11, while 81 per cent of the BJP’s funding accrued from donations (total income: Rs. 426 crore, total donations: Rs. 347 crore), only 22.76 per cent of the total income came from named donors who had contributed over Rs. 20,000.

The corresponding figures for the Congress indicate that while donations accounted for only 14.42 per cent of the total income, a mere 11.89 per cent of the total income was from named donors. The Congress has raised Rs. 573 crore of its total income of Rs. 774 crore from 2009 to 2011 through sale of coupons.

Interestingly, the BSP, which declared an income of Rs.172 crore for the past two years, said donations accounted for Rs. 99 crore, but stated that it received zero donations over Rs.20,000. The two organisations cited these figures to state that the public could deduce very little on who funded India’s political parties.

While the CPI declared that 57 per cent of its income from 2009 to 2011 (total income - Rs. 3.41 crore, donation in excess of Rs. 20,000 – Rs. 1.94 crore) came from named donors, the CPI(M) (total income - Rs.149.85 crore, donation over Rs. 20,000 – Rs. 1.93 crore) said only 1.29 per cent of its donations were in excess of Rs.20,000.

Among the top donors for the national parties include a number of trusts. The General Electoral Trust has donated Rs. 36.46 crore to the Congress and Rs. 7 crore to the BJP from 2004 to 2011. Electoral Trust made donations of Rs. 9.96 crore to the Congress. A company called Torrent Power Ltd. has donated Rs. 11.85 crore to the Congress, Rs. 10.5 crore to the BJP, and Rs. 1 crore to the NCP between 2004 and 2011.

Sterlite Industries, a subsidiary of the Vedanta group that is listed on the London Stock Exchange, donated Rs. 6 crore to the Congress in 2004-05 and 2009-10 while the Madras Aluminium Company Limited, also a subsidiary of Vedanta, contributed Rs. 3.5 crore to the BJP. The Public and Political Awareness Trust of Vedanta has made an overall contribution of Rs.9.5 crore to the BJP during 2003-04 and 2004-05.

According to the National Election Watch and the Association for Democratic Reforms, the other trusts and companies which have made contributions to the political parties include the Bharti Electoral Trust, ITC Limited, Asianet TV Holding Pvt. Ltd., Ambuja Cement Ltd., Harmony Electoral Trust, Mahindra and Mahindra and Larsen and Toubro Ltd.

Only five regional parties have regularly filed their contribution reports from 2004-05 to 2010-11 to the EC. Eighteen regional parties have never submitted their contribution reports.

At the last count, India had 1,396 registered political parties, names of most of which you might never have heard. Between them, these parties received a whopping Rs 4,662 crore through donations and other sources between 2004 and 2011. But, if the amount isn’t surprising, here’s a factoid: over 85 per cent of this amount received as donation by political parties came from unnamed sources, that is, people and organisations that “donated” amounts lesser than Rs 20,000.

As per figures collected by the Association of Democratic Reforms, the BSP collected Rs 172.67 crore through donations during just 2009-2011. But, not even a single donor is named in its records submitted to the Election Commission of India (ECI).

Ideally, the ECI, which has the duty to regulate and conduct elections in the country — it is also tasked with the job of registering parties and allotting symbols — should be able to ask political parties to explain the manner in which they collect and disburse funds. But this power doesn’t lie with it. In fact, no agency is empowered to take stock of funds of political parties.

Some parties, senior politicians and ECI officials say, exist only for the purpose of channelising black money into the system. Despite repeated promises, no government at the Centre has made a serious attempt to make our electoral system more transparent. Much-needed electoral reforms are stuck as parties refuse to open themselves to scrutiny.

In 2004, the then chief election commissioner T S Krishnamurthy wrote to Prime Minister Manmohan Singh seeking his intervention in clearing urgent electoral reforms.

ome areas on which successive CECs have been seeking the government’s intervention include tackling criminalisation of politics, restriction on the number of seats from which a candidate can contest and compulsory maintenance of accounts by parties and their audit.

A few months back, the ECI again wrote to the government seeking amendment to the law to give it power to regulate political parties in matters of funding. But, it is still awaiting the response of the government.

As recommended by the Law Commission of India, the ECI must have the power to discipline political parties and, if required, deregister them.

Maneesh is a senior assistant editor based in Delhi


Karnataka political parties raise 1000s of crores, somehow

INC, BJP, JDS and other parties receive huge sums of money as donations from corporates and individuals - who has given how much?
By Samuel Jacob    
23 Nov 2012, Citizen Mattersbookmark email print
If ‘reforms' is the buzz word, then electoral reforms should be on top of the list, and the funding of political parties foremost among them. Currently there is a lack of transparency in how political parties and candidates solicit, collect and disburse funds. These issues were highlighted in a widely distributed report released by two NGOs, National Election Watch and Association for Democratic Reforms, published this September.
Legally, the activity of fund-raising, expensing, accounting and reporting of funds collected by political parties fall under the ambit of various acts including the Representation of the People Act, 1951; The Foreign Contribution (Regulation) Act, 2010; Companies Act, 1956; Trade Unions Act, 1926 besides the Election Commission of India's "Model Code of Conduct for the Guidance of Political Parties and Candidates." But, more often than not, parties end up circumventing these rules.
In an analysis of funds received by the top three parties in Karnataka, the NGOs' report reveals that in the last four years, the Congress (INC) got Rs 1,492.35 cr, the BJP Rs 769.81 cr, and the JD(S) which has filed returns only for two years (07-08 and 09-10) Rs 4.63 cr.
Interestingly, the Congress got Rs 1,171 cr. from "Sale of coupons", Rs 183.82 cr. as Donations/Contributions and Rs 82.15 cr as Interest. The BJP on the other hand got Rs 644.77 cr. from Donations/Contributions, Rs 53.41 cr as Interest collected and Rs 50.34 cr. from "Aajiwan Sahayog Nidhi". The JD(S) got Rs 4.58 cr. from Donations/Contributions, Rs 94,000 from Interest collected and Rental income of Rs 2 lakhs.

Party Total Income
Indian National Congress     Rs 1492.35 crores
Bharatiya Janata Party     Rs 769.81 crores
Janata Dal (Secular)* Rs 4.63 crores
For FY 2007-08, 2008-09, 2009-2010 and 2010-2011
* For Janata Dal (Secular), donation figures are available only for FY 2007-08 and 2009-10. ITR has not been filed for FY 2008-09 and FY 2010-11

Meanwhile, of the funds received, the Congress spent Rs 716.03 cr on Elections, Rs 131.18 cr. on Aid and Rs 271 cr. on Publicity. The BJP spent Rs 271 cr. on Advertising and Publicity, Rs 141.15 cr. on Travelling and Rs 77.97 cr. on Meetings. The JD (S) did not file Income/Expenses statement.
With parties receiving huge sums of money as donations from corporates and individuals, it becomes important for voters to know who is giving what and if and whether there is any effect of this funding on policies pursued by the party or candidates. The current state of affairs is such that parties exploit the "loopholes" in the law to structure the inflow as well as outflow of funds from their coffers. One such loophole is the requirement to report the names of donors only for sums above Rs 20,000. Thus you have a situation where the parties club most of the money they receive under donations less than Rs 20,000.
For example, in Karnataka, the Congress has shown only 9.1 percent of their income received as donations above Rs 20,000. The corresponding figures for BJP and JD (S) is 21.71 percent and 23.75 per cent respectively.
Further analysis of the figures submitted by the parties reveal that overall, the number of donors giving more than Rs 20,000 has been increasing year on year. In 2010-11 the Congress had 399 such donors, the BJP 474 donors while the JD (S) has not filed their corresponding figures for this year though they reported one donor for the year 2009-10.
For the year 2009-10 when the general elections were held, the top three donors for the Congress Party was the Birla's General Electoral Trust (Rs 13.95 cr.), Tata Group's Electoral Trust (5.64 cr.) and Infrastructure Development and Consultant (I)(P) Ltd (Rs 5.5 cr.).
The BJP's top donors were the General Electoral Trust (Rs 16.60 cr), Asianet V Holding Pvt. Ltd. (Rs 10 cr.) and Torrent Power Ltd. (Rs 5.50 cr.). The JD (S) had only one donor Lakshmi Narasimha Enterprises (Rs 1.10 cr.).
For the year 2010-11, the top three donors for Congress was Torrent Power Ltd. (Rs 2.3 cr.), Russell Credit Ltd. (Rs 1.5 cr.) and ITC Ltd. (Rs 50 Lakh). For the BJP it was Torrent Power Ltd. (Rs 3 cr.), Sai Regency Power Corporation Pvt Ltd. (Rs 1.2 cr.) and Lodha Construction (Dombivili) (Rs 1 cr.). The JD (S) has not filed its ITR for this year.
Who are the donors from Karnataka?
Similarly, the top donors from Karnataka to the three main parties include Lakshmi Narasimha Enterprises, Shobha Developers, R V Deshpande, M R Jaishanker of Brigade Group, Irfan Razak and Razwan Razak of the Prestige Group, and several individuals who have all donated anywhere from Rs 21,000 to Rs 1.1 cr.
Contributors to BJP
SHOBHA DEVELOPERS                Rs. 5,000,000
SHRI M R JAISHANKAR              Rs. 2,000,000
Irfan Rajak                      Rs. 1,250,000
Razwan Rajak                     Rs. 1,250,000
M.R.Jai Shankar                  Rs. 500,000

Contributors to JD(S)
Lakshmi Narasimha Enterprises    Rs. 11,000,000
Lakshmi Narasimha Enterprises    Rs. 1,000,000

Contributors to INC
R.V. Deshpande                   Rs.2,000,000
Krishnappa, MLA                  Rs.1,000,000
R.V. Deshpande                   Rs.500,000
S.T. Somashekar                  Rs.500,000
Dr. K. Sudhakar                  Rs.500,000
Nazeer Ahmed, MLC                Rs.300,000
Nazeer Ahmed, MLC                Rs.300,000
Shri Mohammed Yousuf             Rs.200,000
Shri T.V. Mohandas Pai           Rs.200,000
M. Narayanaswamy                 Rs.200,000
Vasu, Ex-Mayor                   Rs.200,000
S.E. Raghavendra                 Rs.200,000
B.A. Basavaraja                  Rs.200,000
Shri Ramdas Kamat                Rs.100,000
T. John,MLC                      Rs.100,000
Manjunath Kunnur, EX-MP          Rs.100,000
C.G. Chinnaswamy                 Rs.100,000

Of course, we do not know the source of most of the money that parties get because these are all less than Rs 20,000, which they don't have to report. And it looks strange if not suspicious that the names of quite a few top industrial houses are missing from the list of donors, because it is highly unlikely they are not giving any money to the parties. It could well be that they believe in funding the candidates directly rather than give to the parties they represent.
The funds that parties report is not even 1 to 2 per cent of what they actually get, says RK Misra of Nav-Bharat, a political initiative seeking to reduce the role of money-power in fighting elections as well as transparency in how funds are received and spent. According to him, the laws are fine, but the problem is when funding is made anonymously for vested interest and not for furthering democracy or any such reason.
Any solutions?
Interestingly, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), earlier this year, came out with its position on "Funding of Political Parties for Election Purposes". It favored a dual approach of part financing from a Public Fund and part from public and corporate donations. It also favored removal of all caps on income as well as expenditure of political parties.
In fact, the Companies Bill, 2011, which is pending in Parliament and which would replace the Companies Act, 1956, seeks to increase corporate funding to political parties from 5% to 7.5% of the average net profits earned by a company in the three immediately preceding financial years. This money can also be given to any person who the company believes represents a party or political cause. Whether this is desirable or not is highly debatable though not much serious debate has really taken place on corporate funding of political parties.
Samuel Jacob
23 Nov 2012
Samuel Jacob is a Bangalore-based journalist. He writes on urban infrastructure, planning and development issues.

Striking at the root of corruption

Shailaja Chandra
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crime, law and justice corruption & bribery
Cleansing political parties and elections of illegal money is the first step towards tackling the evil of graft
Corruption is nothing but a reflection of the distribution of power within societies. The country is where it is because the political system is self-perpetrating and no party is accountable to anyone except a coterie of people that dominates all decisions. Unless the political system is accountable, going after individual cases of corruption will achieve little.
Slew of anti-corruption bills
By making a single point demand for a Jan Lokpal, to the exclusion of all else, Anna Hazare’s agitation became circumscribed by its own rhetoric. Expectedly, the government response was a slew of anti-corruption bills that have been introduced in Parliament, unheard of in the annals of the past six decades. From 2010, in a span of just two years, as many as 10 anti-corruption bills have been tabled including the disputed Lokpal bill, the forfeiture of benami property, foreign bribery, money laundering, and whistle-blowing bills plus five more — all aimed at deterring specific acts of corruption or purporting to give corruption-free public service as a right. And it was not just the Central government that showed this eagerness. Bihar, Rajasthan, Jharkhand and Odisha have actually enacted laws which can result in the attachment of ill-gotten property of public servants — sometimes pending investigation.
Undeniably, the citizenry will applaud such measures, frustrated and angry as people are about corruption. But wittingly or unwittingly, this response has deflected attention from a much larger issue. None of the bills or laws addresses the fountainhead of corruption — the opaque management of political parties which includes the source and deployment of their funds.
The second Administrative Reforms Commission (ARC 2009) underscored the large-scale criminalisation of politics, illustrating how the participation by criminals in the electoral process was “the soft underbelly of the Indian political system” leading to “the flagrant violation of laws, poor quality of services, protection from lawbreakers on political, group, class, communal or caste grounds, partisan interference in the investigation of crimes, the poor prosecution of cases, inordinate delays that last for years, high costs of the judicial process, mass withdrawal of cases and indiscriminate grant of parole.”
What is of great importance is the open admission that votes are in fact secured through large, illegal and illegitimate expenditure on elections. This has been termed as the starting point of corruption making cleansing elections the most important route to bringing principles into politics. The Lokpal brouhaha has deflected attention from issues infinitely more important for going after dishonest politics, which seems to be all-pervasive.
And the context matters too. Much of India lives in as unequal a world — comparable in fact to pre-industrial Britain. Feudal mindsets prevail and the exercise of patronage is expected. In addition, in India, money power can control decisions the voter makes. Bound by the mores of a largely agrarian way of life, the poor remain simultaneously protected and penalised not by the law and the police as much as by feudal lords, often having criminal records. Indian political parties had long used these local sardars and strongmen as trusted allies for defeating opponents. But the latter have moved up in life by increasingly joining the political fray as candidates — not just supporters, and they have joined to win.
According to the Annual Report of the Association for Democratic Reforms (ADR), among 543 elected Members of Parliament who were elected in the 2009 election, 162 (30 per cent) had criminal cases pending. Five years earlier, that figure was 24 per cent. Meanwhile, the votes needed to win a seat have fallen to as low as 15 per cent. Criminal elements that once pulled in votes for party candidates are now getting voted to power themselves, gaining social respectability and public esteem in the bargain. Meanwhile, campaign-spending limits being easy to flout, buying the voter is easily managed.
More worrisome than individual corruption is the widespread concern that funds are collected by political parties and parked in secret bank accounts abroad to be ploughed back to finance elections often by hook or by crook. Since fund management is confined to a handful of people in each party, it gives enormous power to the top leadership which controls the deployment of funds and all that accompanies it. When the choice of candidates is intrinsically linked with money power, quid pro quo<

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