Cronies and capitalists

Feb 23 2014, 05:33 IST
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SummaryIn election year, crony capitalism is not going away, as Arvind Kejriwal hopes. Its roots are only getting deeper

Arvind Kejriwal should be corporate India’s worst nightmare. His scattergun approach has targeted any number of businessmen, starting with the very top, industrialist Mukesh Ambani. Earlier, he had accused Anil Ambani and Naresh Goyal of Jet Airways, plus a number of others, for corruption or having illegal Swiss accounts, but here’s the catch. His recent meeting with members of the Confederation of Indian Industry (CII) turned out to be something of a love fest. Industrialist Rajiv Bajaj declared himself ‘a fan of Kejriwal’, adding; “I resonate very strongly with his thoughts and ideologies.” Kejriwal’s one liner, “I am against crony capitalism, not capitalism”, had seemingly won them over.

Here’s the irony. We are heading for a no-holds-barred election, where money power will play a central role, and that money can only come via campaign contributions to political parties from business houses. Like it or not, crony capitalism is a fact of Indian political life. There is no way the 2G scam and Coalgate would have taken place without it, and there are other examples to testify as to how deeply entrenched it is in what Rahul Gandhi calls ‘the system’. A recent study of contributions to India’s political parties offered a telling insight into the nexus between politics and money. Companies in technology and other service businesses—industries that require few government licences or permissions—contributed virtually nothing. The biggest donors were involved in mining, power and other sectors dependent on the government to obtain rights to natural resources. Another study shows that India’s main political parties earned R4,662 crore over the last seven years, mostly in donations. The study shows the Congress earned R2,008 crore between 2004 and 2011 and the BJP, in the same period, earned R994 crore.

The study, conducted by two NGOs, analysed the income-tax returns of political parties and documents made available to the Election Commission. Most of the funding that was declared came from six electoral trusts, which had made contributions totalling R105.86 crore—mostly to the Congress and BJP: General Electoral Trust of the Aditya Birla Group, Electoral Trust of Tata Sons, Bharti Electoral Trust of Bharti Enterprises, Satya Electoral Trust, Harmony Electoral Trust and Corporate Electoral Trust. Other companies that were listed showed that generosity was spread between BJP and Congress. Torrent Power gave R14.15 crore to Congress and R13 crore to the BJP. Under existing electoral laws, if the amount donated is below R20,000,

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