Author(s) :

Sunaina Kanojia, Neha Sharma, Poonam Sethi, Jai Prakash Sharma.

Volume/Issue :

Abstract :

The study aims to explore the pattern of corporate political donations in India from 2004-2019 and its mode of funding. It attempts to highlight the flaws and shortcomings in their disclosure norms. The role of Corporate Social Responsibility funds as a surrogate political funding has also been examined .It also explores the emergence of electoral trusts as a new mode of corporate political funding in India.It analyses the data of funds received by national political parties in India disclosed in their contribution reports on the election commission website and on company’s website. It also explores the disclosure pattern of select companies (companies which have contributed more than Rs. 1 crore towards corporate political funding not through electoral trust over the years (2004-2018) .It also studies the pattern of growth of electoral trust as a mode of corporate political funding in India. The analysis of secondary data highlights the sorry state of effectiveness of disclosure norms and consent taking mechanism for corporate political funding decisions. It indicates that somehow philanthropy is not the idea or intention behind corporate funding. The study found that sectors dependent on government policy decisions are keener to donate to political parties. It encourages the exploration of adaption of new technology for better implementation of corporate governance and corporate political funding framework. Evidence from the analysis of the data highlights the emergence of real estate sector as one of the most prominent donors to political parties for 2004-2019 .The results also point towards an inequitable allocation of funds to various parties leading to an uneven playing field. It highlights that a stringent mechanism is needed to curb this upcoming menace of crony capitalism.

No. of Downloads :

27

KEYWORDS:

Corporate Political Funding, Corporate Social Responsibility, Corporate Governance, Political Parties

INTRODUCTION & OBJECTIVES:

Corporate sector has seen an increased demand for financial disclosures, especially about their political funding due to an increase in investor awareness and stringent corporate governance requirements. The growing nexus between the corporate sector and various political parties is evident from the deals and scams like Coalgate, spectrum scam and mining scam, etc. While chasing the majority and power positions all political parties require funding for financing the functions of political parties, generally known as political finance or political funding and the two predominant sources are state funding and private funding Sharma (2015). It damages democracy because it undermines elections and distorts political competition. The quality of government is negatively impacted when decisions by elected politicians are taken to return favours to those who had funded them to gain this political power. This has made the topic of corporate funding of political parties a topic for discussion, debate and research. The study analyses and highlight the major corporate donors in India from 2004-2019 and examines their pattern and mode of corporate donations in India. The study highlights the flaws and shortcomings in corporate governance in the private sector regarding their political funding disclosure norms. This study gauges the practice of select Indian Inc towards the two types of contributions, corporate political funding (CPF) and corporate social responsibility (CSR). OBJECTIVES 1. To analyse the trend of corporate political funding and highlight the disclosure practices about CPF of major corporate political donors towards Indian national parties from 2004-2019. To explore the emergence of electoral trust as a tool of corporate donations to political parties. 3. To comparatively analyse the Corporate Social Responsibility and Corporate Political Funding expenditure of the corporate political donors. 4. To study the relationship between the financial variables (profit and CSR funding) and the intention of KMP ( Key Managerial Personnel) of doing corporate political funding.

DOI:

https://doi.org/10.58426/cgi.v2.i1.2020.41-70