Should loss-making, shell firms be barred from political funding? Here's what FM had to say

Union Finance Minister Nirmala Sitharaman on Friday said corporates are free to fund political parties but there should be a law or a system that needs to be worked out. 

"Nobody is saying parties cannot be funded," the FM said at the India Today conclave. Sitharaman was replying to Business Today TV Managing Editor Siddharth Zarabi at the India Today conclave on a question if loss-making firms and shell companies should be barred from political funding and why there is sheepishness around corporate funding of parties. 

On barring 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."

The finance minister's comments a day after 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.

In list of entities which purchased electoral bonds to make political donations is a veritable Who's Who of the corporate world. The better known names include steel tycoon Lakshmi Mittal, Sunil Bharti Mittal's Bharti Airtel, Anil Agarwal's Vedanta, ITC, Mahindra and Mahindra, DLF, PVR, Birlas, Bajajs, Jindals, Spicejet, IndiGo and the Goenkas.

While it is already known that the ruling BJP received the highest amount of donation of over Rs 6,000 crore followed by the Congress party, the data dump only disclosed the amount donated by each entity or individual. It does not say who donated to which party.

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.