‘Issue on how loss making companies can give donations has to be looked into’: FM Sitharaman 

Union Finance Minister Nirmala Sitharaman on Friday said corporates can fund but there should be a particular law or scheme of things under which they will be allowed to give funds. Sitharaman was replying to Business Today TV Managing Editor Siddharth Zarabi who asked her whether loss-making firms and shell companies should be barred from sending political funding. He also asked whether corporates should have a choice to donate to its favoured party to finance elections.

Answering the question, Sitharaman, who was at the India Today conclave on Friday, said: “If corporates can fund, they should fund. But under which law or scheme of things. All that will have to be worked out. Nobody is saying parties cannot be funded.”

About loss-making and shell companies, Sitharaman said: “There are issues on that front. We need to look into them. You cannot have shell companies and loss-making companies doing this.”

“Just as in CSR, where loss-making companies are not required to give the 2% contribution, this is also issue has also been raised as to how loss-making companies can give donations.

Talking about the electoral bond issue during her chat session at the India Today conclave, Sitharaman said that it is amere assumption that there is a link between the raids and donations. As per the ECI data, nearly half of the top thirty firms contributing to political parties via electoral bonds have been probed by central probe agencies, including the Enforcement Directorate, Central Bureau of Investigation, and Income Tax departments. 

“What if the companies gave the money, and after that, we still went and knocked at their doors through the Enforcement Directorate? That’s an assumption that the ED went and knocked at their doors, they wanted to save themselves, and therefore they came up with the funds,” she said. 

“The second assumption in that itself is, are you sure they gave it to the BJP? They probably gave it to the regional parties.”

“The electoral bond system may not be perfect. We must take lessons from the Supreme Court judgement on electoral bonds. There may or may not be a new law around this, I’m not commenting. Will make efforts to make the process more transparent,” she added. 

Sitharaman said that the previous system of donations to political parties was “completely imperfect”. This was a reference to the electoral trusts scheme, which was introduced by the UPA government in 2013.       

On Thursday, the Election Commission of India published data on electoral bonds on its website after receiving the information from the State Bank of India as per the directions of the Supreme Court.

On Friday, the Supreme Court rapped the SBI for not disclosing the unique alpha-numeric numbers of the electoral bonds received by political parties and sought the bank’s response.

Reacting to this, Sitharaman said, “The case is still in court, the verdict has come and the State Bank of India will submit what it has to.”