The Hindu Business Line : Political parties yet to tap corporates fully!

About 3,295 companies have made donations of Rs 206 crore as of March 2004. It is not clear how much of it was "political donations". A considerable amount of this Rs 206 crore may have also gone to charity and community welfare projects. Remember, however that general elections were held in May 2004 and it is a fair guess that political contributions must have started much earlier.

Donations grew by 26 per cent in 2003-04. But the figures do not tell much. Even if one took the entire donations as political, the total contributions over the past four years amount to just about Rs.750 crore. That would hardly help finance the campaign in a couple of hundred parliamentary seats.

According to statutory provisions, companies can contribute up to 5 per cent of their average net profits of the preceding three years as political donations. They are required to disclose how much they have given and to which party in their annual report.

Using a simple interpretation of statutory provisions, these 3,295 companies could have contributed nearly Rs 2,500 crore in 2003-04 while they have actually contributed only a fraction of the sum. Even the sweetener provided by the earlier Government in giving tax exemptions to companies making such donations, has not helped loosen corporate purse strings. Reliance Industries tops the list of donations given by Indian companies for the last few years.

In 2003-04, Reliance Industries gave donations of Rs 36.44 crore.

Indian Oil follows immediately with donations of Rs 16.15 crore but being a government company it cannot give political donations. Then comes Infosys Technologies with donations of Rs 14.29 crore and Bajaj Auto at Rs 7.62 crore.

Infosys Technologies gave a substantial part of its donations to Infosys Foundation that addresses issues in healthcare, education and initiatives for the rural poor. Going purely by reported figures, corporate political donations do not seem to have much to do with election campaign funding.

Treasurers of political parties may, however, have to be prepared for even lesser corporate largesse in future. Global trends point in that direction.

Just a couple of weeks before the US concluded its most expensive Presidential election (campaign estimated to have cost $1.5 billion), the Wall Street Journal noted, "Some of the nation's most prolific corporate donors have seized on the restrictions of campaign laws to largely drop out of the political money race."

It said that companies are seeking a more direct role in the electoral process.

It added, "Rather than simply writing checks, they're encouraging employees to lobby Congress on particular issues or support individual candidates."