Indian firms form electoral trusts to fund parties

AHEAD of one of the most avidly watched general elections in Indian history, "Electoral Trusts" are being set up by a slew of top corporate houses - including the Tata group, Reliance, Mahindra & Mahindra, Aditya Birla Group and Bharti Group - to bankroll the expenses of political parties across the country.

At least two dozen Indian conglomerates are currently in the process of registering their own Electoral Trusts (non-profit companies) which will have to disclose their contributions giving details of the amount and the political party they are funding during the financial year.

The latest system of forming Electoral Trusts comes in the wake of the Central Board of Direct Taxes - responsible for the administration of direct tax laws through the Income Tax Department - launching an electoral trust scheme in January 2013 to usher in transparency in corporate funding to political parties.