A report by the Association of Democratic Reforms for the year 2016-17 shows that the BJP got over 89 per cent of the total campaign funding from Electoral Trusts. The BJP received over Rs 290 crore for campaign funding, compared to Rs 16.5 crore given to the Congress.
ThePrint asks: What can Congress do to get higher campaign funding from corporate India?
For BJP, Karnataka would be icing on the cake. For Congress, it’s a matter of survival
Senior fellow and director of South Asia program, Carnegie Endowment for International Peace
There is a famous saying, “Nothing succeeds like success.” This proverb alone explains why the Congress is performing poorly when it comes to corporate donations.
The latest report by the Association for Democratic Reforms (ADR) on the donation patterns of electoral trusts confirms what anecdotal evidence has long suggested: the Congress is falling significantly behind its rival, the Bharatiya Janata Party (BJP), when it comes to raking in corporate contributions.
For the past several years, the Congress has seen its political profile gradually diminish to the point where it controls just two major states—Karnataka and Punjab—in addition to Meghalaya, Mizoram, and the Union Territory of Puducherry.
As its political star has fallen, and the BJP’s has risen, funding has migrated from the former to the latter. Donors simply don’t want to get aboard a sinking ship; rather, they follow momentum—and the BJP has amassed most of it since 2014.
There is a second reason behind the Congress’ funding woes: many corporates believe its left-of-centre economic policies harken back to the days of the Licence Raj when private entrepreneurship was stifled. While many corporates are not universally thrilled with the BJP’s performance in power, they see it as the lesser of two evils.
The major takeaway is this: the Karnataka elections hold great import for the Congress for symbolic as well as practical reasons. If the Congress loses, it is down to just one major state. But it also loses its most prized funding stream. On account of the state’s mining sector, booming real estate market, and Bengaluru’s dynamism, Karnataka produces massive rents for whichever party controls it.
For the BJP, it is icing on the cake. For the Congress, it is a matter of survival.
The mantra is simple: Start winning elections
Professor and director at CSDS
If there is one mantra which could attract corporate houses towards the Congress for giving donations, it is only electoral success — if not the national elections, at least some big states.
The reason the Congress is receiving such dismal contributions compared to the BJP is that since 2014, it has lost the general elections and most of the state assembly elections; Punjab being the only exception. The party could not pose a serious challenge to the BJP in many states and kept losing ground. No one likes to invest in a sinking business, so it’s not surprising that corporate houses have almost turned their backs to the Congress.
It is not unusual for corporate houses to donate disproportionately to various political parties. The trend is very clear: The party in power or one seemingly on the ascendency receives more donations than parties which seem to be on decline.
Till about 2012-13, it was the Congress which received the biggest chunk of corporate funding compared to the BJP, because the Congress was the ruling party. The corporate houses that donate also expect some benefits in return, and the party can do that only if it is in power. Nothing comes free in this world, and for corporates to donate more to the Congress, they would expect something in return.
At present, the Congress just rules two big states — Karnataka and Punjab. It can hardly help the corporates in the present circumstances. The least the Congress needs is to win a state like Rajasthan, Madhya Pradesh or Chhattisgarh.
While that would attract some extra funding, it will still not tilt the balance, which is clearly in favour of the BJP in a very big way.
The Congress does not need to pander to corporate India. We are a party with a heart
MP and chairperson of the AICC research department
First, this report is a confirmation of the ‘suit-boot sarkar’ and of crony capitalism in action. The ruling party receives disproportionate funding because it is hand-in-glove with corporate interests.
Second, the disproportionate funding directed toward the party in government raises suspicions about whether the ruling party is shaking down or coercing companies to give it funds. The huge funding gap makes one wonder whether the money is being donated out of choice or because the government holds all the sticks.
Third, and sadly, this shows that corporate India does not care about economic growth. It is rewarding the party that has sunk the economy into a hole. When UPA-II left office, the economy was picking up. The ruling party drove it to an abysmal low of 5.7 per cent GDP growth last quarter (by the new, flattering calculation), compared to the UPA average of 7.6 per cent.
It seems counter-intuitive to fund a party that seems to be failing on the economic front. Perhaps they just want to keep the country’s political bosses happy.
Or maybe these funds are being donated by the 1 per cent of India which now, according to the World Economic Forum report, has cornered 73 per cent of India’s wealth.
The Congress does not need to pander to corporate India. We are a party with a heart. We care about those that have been left behind. Yet, we need to bring to the attention of corporate India to the fact that our economy did brilliantly under UPA. Our record speaks volumes. From liberalisation in 1991 to UPA’s 7.6 per cent average GDP growth, we have guided the productive forces in India to new heights. Corporates are free to choose whom to support after they evaluate the performance of all parties.
But overall, this disproportionate corporate funding for the ruling party is a sad reflection on the state of democracy in the country. Political parties should have a level playing field when it comes to elections. Undue concentration of wealth in the hands of one political party does not bode well.
There are two solutions for this problem: One, we can switch to a system of public funding. See my article here for details.
Second, we can have a national election fund.
There are provisions under both of these schemes where parties are rewarded according to their performance. This will ensure a relatively more equitable distribution of funds for political parties to contest elections in a freer and fairer manner.
Rahul Gandhi’s leadership has not changed the party’s fortune
In any democracy at the level of ideals, it is always a problem to accept that a government by the people and for the people should have to be funded by moneybags. In terms of the ethics of it all, there is a looming danger that the mandate of the people would be corrupted by the heavy hands of the minority who have the power of the purse. The promise of democracy is the exact opposite – equal worth of all, irrespective of status or money power.
In actual fact, democracies around the world struggle to ensure fair norms of election funding. They struggle to bring about conditions where there is transparency and special interests are not able to sway election outcomes in their favour.
The electoral trusts formed under the ambit of the Finance Bill, 2009, are one such mechanism. The idea of the scheme is that non-profit electoral trusts can receive money from multiple sources, exempt from certain statutory taxes, with the condition that 95 per cent of their funding will be given to registered political parties.
However, the recent report of the Association for Democratic Reforms brings out a startling fact – not all trusts receive a lot of money. Of the trusts that have gone on to disclose their receipts, it is just one trust that, by far, exceeds the receipts of other trusts. The legal design notwithstanding, fair play is not ensured because 90 per cent of the donations have been directed only to the BJP. Further, three trusts have contributed only to a single political party each — including the BJP and the Congress.
So, the odds are stacked against the opposition — the parties have to find ways to manage their political enterprise. Corporates will favour the treasury benches.
As far as the Congress is concerned, quite clearly, the new leadership of Rahul Gandhi has not changed its fortunes dramatically. It will have to demonstrate greater electoral hold in state elections before it finds funding favours tilting its way.
The entry barrier for new political experiments still remains very high. One of the biggest criticisms of the trust mechanism that it has been unable to alter the weight of the corporates in driving the direction of funding. Donors also don’t reveal their identity, so electoral trusts continue to hide who the donors are.