Electoral Bonds: Companies that need govt contracts also the most generous
A look at the top 50 donors to political parties under the recently banned Electoral Bonds scheme reveals that the list comprises almost exclusively of companies that depend heavily on government approvals and contracts.
During the court hearings, the biggest criticism leveled against the electoral bonds scheme -- brought in by the Modi government five years ago -- has been that it facilitated the bribing of political parties by companies in return for awarding infrastructure and mining contracts and making changes to regulations.
Whether fair or not, the data provided by SBI to the Election Commission will definitely embolden this argument. According to it, the biggest contributors of money through this scheme are from sectors that depend on government contracts -- such as infrastructure, construction and mining -- and those that are highly sensitive to regulatory changes, such as lottery, pharmaceuticals, and large-scale manufacturing.
Out of the top 50 biggest contributors under the scheme, a whopping 20 belonged to the infrastructure and construction sector (see chart). Of the top 10, 9 belong to this category.
Companies in the construction and infrastructure sector depend on government contracts -- such as for building bridges and roads -- for doing business.
Another four companies in the top 50, including 3 in the top 13, are from the mining sector -- which is even more dependent on the goodwill of those in power for their operations. Companies in the mining sector depend on the government to allocate zones for carrying out their mining activities, and for giving approval for expansion projects and so on.
While these two sectors -- which depend on the government for their orders -- comprise around half of the top 50 donors under the scheme, the remaining half comprised companies belonging to heavily regulated sectors.
These are sectors where a slight change in government regulation of law can mean the difference between superlative profits and bankruptcy, such as power generation, pharmaceuticals, logging and large-scale manufacturing.
Little surprise, then, that the most generous donor under the electoral bonds was Santiago Martin's Future Gaming and Hotel Services Pvt Ltd.
Martin, who started out from Coimbatore in Tamil Nadu, is in one of the most regulated businesses of all -- lottery. With donations totaling Rs 1,368 crore, Martin was the clear winner in terms of his generosity towards political parties.
Similarly, 13 out of the top 50 are companies engaged in various large-scale manufacturing activities, particularly of commodities that serve as raw material for other manufacturers, such as steel, carbon black, cement, phosphorous, transformers and alcohol.
The list of manufacturers also include no less than five pharmaceuticals makers. Pharmaceutical manufacturers are especially vulnerable to changes in government policy -- such as the inclusion of a particular drug in price-control regime, and the disbursal of incentives and tax breaks for their various projects.
The list of top donors is likely to vindicate the stand taken by the court when striking down the bonds scheme.
| DONOR | Amount | Sector |
|---|---|---|
| FUTURE GAMING AND HOTEL SERVICES PRIVATE LIMITED | 13,680,000,000.00 | lottery |
| MEGHA ENGINEERING AND INFRASTRUCTURES + WESTERN UP POWER TRANSMISSION COMPANY LIMITED | 9660000000 + 2200000000 | infra & construction |
| QWIKSUPPLYCHAINPRIVATELIMITED | 4,100,000,000.00 | unknown |
| HALDIA ENERGY LIMITED | 3,770,000,000.00 | infra & construction |
| VEDANTA LTD | 4,006,500,000.00 | mining |
| ESSEL MINING AND INDS LTD | 2,245,000,000.00 | mining |
| MKJ ENTERPRISES LTD + KEVENTER FOODPARK INFRA LIMITED + MADANLAL LTD | 1924200000 + 1950000000 + 1855000000 | infra & construction, mfg |
| BHARTI AIRTEL LIMITED + BHARTI TELEMEDIA LIMITED | 1830000000 + 370000000 | infra & construction |
| YASHODA SUPER SPECIALITY HOSPITAL | 1,620,000,000.00 | healthcare |
| UTKAL ALUMINA INTERNATIONAL LIMITED | 1,353,000,000.00 | mining |
| DLF LUXURY HOMES LIMITED + DLF COMMERCIAL DEVELOPERS LIMITED + DLF GARDEN CITY INDORE PVT LTD | 250000000 + 1300000000 + 150000000 | infra & construction |
| JINDAL STEEL AND POWER LIMITED | 1,230,000,000.00 | infra & cons, mfg |
| B G SHIRKE CONSTRUCTION TECHNOLOGY PVT L TD | 1,170,000,000.00 | infra & construction |
| DHARIWAL INFRASTRUCTURE LIMITED | 1,150,000,000.00 | infra & construction |
| BIRLA CARBON INDIA PRIVATE LIMITED | 1,050,000,000.00 | manufacturing |
| CHENNAI GREEN WOODS PRIVATE LIMITED | 1,050,000,000.00 | infra & construction |
| RUNGTA SONS P LTD | 1,000,000,000.00 | timber |
| IFB AGRO INDUSTRIES LIMITED | 923,000,000.00 | seafood |
| TORRENT POWER LIMITED | 865,000,000.00 | infra & construction |
| AVEES TRADING FINANCE PVT LTD | 855,000,000.00 | Scrap |
| DR.REDDY'S LABORATORIES LTD | 800,000,000.00 | Pharma |
| PRARAMBH SECURITIES PVT LTDPROPRIET | 780,000,000.00 | securities trading |
| RASHMI CEMENT LTD | 635,000,000.00 | manufacturing |
| SRI SIDDHARTH INFRATECH AND SERVICES I P | 601,000,000.00 | infra & construction |
| INFINA FINANCE PRIVATE LIMITED | 600,000,000.00 | finance |
| NCC LIMITED | 600,000,000.00 | infra & construction |
| NATCO PHARMA LTD | 572,500,000.00 | pharma |
| DIVI S LABORATORIES LIMITED | 550,000,000.00 | pharma |
| THE RAMCO CEMENTS LIMITED | 540,000,000.00 | manufacturing |
| UNITED PHOSPHORUS INDIA LLP | 500,000,000.00 | manufacturing |
| AUROBINDO PHARMA LIMITED | 490,000,000.00 | manufacturing |
| MS S N MOHANTY | 450,000,000.00 | mining |
| NAVAYUGA ENGINEERING COMPANY LIMITED | 450,000,000.00 | infra & construction |
| PCBL LIMITED | 450,000,000.00 | manufacturing |
| RITHWIK PROJECTS PRIVATE LIMITED | 450,000,000.00 | infra & construction |
| SASMAL INFRASTRUCTURE PRIVATE LIMITED | 440,000,000.00 | infra & construction |
| TORRENT PHARMACEUTICALS LTD | 425,000,000.00 | pharma |
| TRANSWAYS EXIM PRIVATE LIMITED | 415,000,000.00 | manufacturing |
| LAXMI CIVIL ENGINEERING SERVICES PR | 400,000,000.00 | infra & construction |
| MODERN ROAD MAKERS PVT. LTD. | 400,000,000.00 | infra & construction |
| PHL FINIVEST PVT LTD | 400,000,000.00 | diversified |
| SEPC POWER PVT LTD OPERATION RETEN | 400,000,000.00 | infra & construction |
| SHIRDI SAI ELECTRICALS LTD | 400,000,000.00 | manufacturing |
| LAKSHMI NIWAS MITTAL | 350,000,000.00 | manufacturing |