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Tax Benefits for Corporates But What About People?

Sat, 21 Sep 2019 05:19:35 +0000

The government has doled out new benefits for corporate houses while the economic slowdown continues to squeeze the common man.

Interview with Paranjoy Guha Thakurta
Interviewed by Prabir Purkayastha Produced by Newsclick Team,

The government has doled out new benefits for corporate houses while the economic slowdown continues to squeeze the common man. Senior journalist Paranjoy Guha Thakurta discusses the implications of the corporate tax concessions announced by the finance minister today.

Courtesy: Newsclick.in

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Corporate India worried as more BJP leaders blast Modi government’s handling of the economy

Thu, 28 Sep 2017 07:58:25 +0000

Noises within BJP circles regarding the Modi government’s handling of the economy have exploded out in the open with former Union Finance Minister Yashwant Sinha slamming the functioning of the Finance Ministry under Arun Jaitley.

Newsclick Image by Nitesh Kumar

“The prime minister claims that he has seen poverty from close quarters. His finance minister is working over-time to make sure that all Indians also see it from equally close quarters”, wrote Sinha in a hard-hitting opinion piece in The Indian Express.

Industry, agriculture, construction and services have slowed down and exports have dwindled, said Sinha. Demonetisation “has proved to be an unmitigated economic disaster”, while “a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market.”

The methodology for the calculation of GDP had been changed by the BJP government in 2015, after which the growth rate recorded earlier increased statistically by more than 2 per cent. “So, according to the old method of calculation, the growth rate of 5.7 per cent is actually 3.7 per cent or less”, wrote Sinha.

BJP leader Subramanian Swamy has been continuously attacking Jaitley on Twitter, while former BJP minister Arun Shourie had also come out against the Finance Minister’s handling of the economy.

Yashwant Sinha sought to blame “the heavy burden of so many extra responsibilities” that Jaitley had to bear for the state of the economy.

But long-time observers point out that the problems run much deeper. Economist Prabhat Patnaik pointed out in a recent article that the looming recession in India is a product of three factors: the world crisis being imported into the domestic economy, the demonetisation measure whose effects continue to linger, and the Goods and Services Tax (GST) which has suddenly readjusted tax-burdens in a manner detrimental to small producers and traders.

Patnaik, who was the among the earliest to predict the recessionary impact of demonetisation, said in a recent interview that demonetisation added to a recessionary tendency that has existed for some time because of the world capitalist crisis. While it had appeared for a while that countries like India and China were insulated against the impact of the crisis, that is no longer the case. It is known for some time that the crisis was beginning to hit them.

Investment, net exports and government expenditure have all been showing symptoms of slowing down. Government expenditure increased recently due to the Pay Commission recommendations, but that kind of stimulus will not be there all the time and once its impact wanes, the recession would become much more pronounced. That is what is happening now, said Patnaik. Demonetisation has added to the recessionary tendency, as the informal sector in particular was adversely affected.

Share of Exports in GDP Touch 14-Year Low; GST Collections Down
Figures for the first quarter of the 2017-18 financial year bring out the sluggishness in export growth. While GDP growth in the April-June 2017 quarter – at 5.7 per cent – was more than two per cent lower than in the corresponding period last year, the share of exports in India’s GDP declined to a 14-year old low in the same quarter, Business Standard reported . Export growth in the quarter was a mere 1.2 per cent at constant prices. Export of goods and services accounted for 19.4 per cent of the GDP at constant prices in the April-June 2017 quarter, down from a little over a quarter of the GDP at its peak in 2013-14.

Bad news on the economy front extended to tax revenue as well, with GST collections slowing down in August. GST collections for the month were at Rs. 90,669 crore, down from Rs. 94,063 crore in July. This comes on top of the fact that the final figures for GST revenue are expected to be substantially lower due to refund claims of a massive Rs 65,000 crore in July.

Negative Outlook on Growth
Meanwhile Anil Manibhai Naik, outgoing Group Executive Chairman of Larsen & Toubro (L&T), has said in an interview with Business Standard that the economy is unlikely to revive for the next two years.

“India is in election mode. There are polls either in one state or the other, apart from general elections for the next two years. This will keep the top leadership of the government busy with campaigning and crucial governance will get neglected”, said Naik.

“Besides, the private sector is not in a position to invest, as many companies are dealing with their debt problem, while other large corporates that wanted to invest have completed their capital expenditure programme.”

Courtesy: Newsclick.in

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For Indian Corporates, Its the BJP that was the Preferred Party for Largesse: 2012-2016

Thu, 17 Aug 2017 11:27:51 +0000

Analysis of Donations from Corporates & Business Houses to National Parties – FY 2012-13 to 2015-16

(Known donations above Rs 20,000 only)

For complete report in English and the summary in Hindi, containing sector-wise in-depth analysis of donations received by National Parties between FY 2012-13 & 2015-16, kindly refer to the attached reports.

Introduction

Political parties are required to submit details of donors who have made donations above Rs 20,000 in a financial year (between 1^st April and 31^st March) to the Election Commission of India, every year. Parties provide details of the name, address, PAN, mode of payment and amount contributed by each donor who has made donation above Rs 20,000 in their submission.

Association for Democratic Reforms (ADR), in its earlier report dated 8^th January, 2014, specified that various sectors of business houses in 8 years, between FY 2004-05 & 2011-12, donated a total of Rs 378.89 cr to National Parties, constituting 87% of the total contribution from known sources of political parties.
This report analyses the donations from corporates to National Parties between FY 2012-13 and 2015-16.
Political parties considered for the report are BJP, INC, NCP, CPI and CPM. Though a National party, BSP has not been considered for analysis in this report as the party has declared that it received no voluntary contributions above Rs 20,000 from any donor between FY 2012-13 and 2015-16.
It is seen from the analysis that various sectors of business houses, in 4 years, donated a total of Rs 956.77 cr, constituting 89% of the total contribution to political parties from known sources.

Graph: Percentage share of donations from various business houses to National Parties, between FY 2012-13 and 2015-16

Executive Summary

Donations from corporate/ business houses
1. Out of the 5 National Parties, BJP received the maximum donations of Rs 705.81 cr from 2987 corporate donors followed by INC which received a total contribution of Rs 198.16 cr from 167 corporate donors.
2. Between FY 2012-13 and 2015-16, BJP’s and INC’s voluntary contributions above Rs 20,000 from corporate/business houses is 92% and 85% respectively.
3. CPI and CPM have the lowest share of corporate donations at 4% and 17% respectively.

Graph: Share of donations from corporate/business houses in total donations to national parties between FY 2012-13 to 2015-16

Year-wise corporate donations to National Parties
1. National parties have received the maximum corporate donations in the FY 2014-15, during which Lok Sabha elections were held.
2. Corporate donations received in FY 2014-15 alone forms 60% of the total corporate donations received between FY 2012-13 and 2015-16.
3. Donations from corporates to National Parties reduced by 86.58% between FY 2014-15 and 2015-16.
Top corporate donors to National Parties
1. Despite not donating during FY 2012-13, Satya Electoral Trust was the top donor to three of the National Parties, between FY 2012-13 and 2015-16. The Trust donated a total of 35 number of times in 3 years, amounting to Rs 260.87 cr.
2. BJP declared receiving Rs 193.62 cr while INC was the recipient of Rs 57.25 cr of funds from the trust. NCP received Rs 10 cr from Satya Electoral Trust during the same period.
3. General Electoral Trust, which was formed before the Electoral Scheme was launched by the Government in 2013, was the second highest corporate donor to BJP and INC. Between FY 2012-13 & 2015-16, the Trust donated Rs 70.7 cr and Rs 54.1 cr to the two National Parties, respectively.
4. CPI and CPM: The top donors to the Communist parties were ‘Associations’ or ‘Unions’. CPI received a total of Rs 14.64 lakhs from 15 different associations/ unions while CPM received a total of Rs 1.09 cr from 7 different associations.

Categorization of donors based on their type of businesses

a)The contributions from corporate/ business houses have been divided into 14 sectors by ADR and does not form a part of the submission made by parties to ECI. The sectors include Trusts & Group of companies, Manufacturing, oil & power, mining, construction, exports/imports, real estate among others.
b)A total of Rs 956.77 cr was donated by all the corporate/ business houses to the 5 National Parties between FY 2012-13 and 2015-16.
c)For “Categorization of various corporate/ business houses” for the purpose of this analysis, please refer to Page 6 of the attached report. Various business interests of the groups of companies is provided in Annexure -1
d)Donations from Electoral Trusts to National Parties between FY 2012-13 & 2015-16 is given in Annexure – 2.
5. Sectors with top donations to National Parties – Year-wise

a) The real-estate sector was the biggest donor to the National Parties during FY 2012-13, contributing a total amount of Rs 16.95 cr to the parties. BJP received the highest contribution of Rs 15.96 cr followed by INC with Rs 95 lakhs and CPM with Rs 4 lakhs.

b) Trusts and Groups of Companies with varied interests in mining, real-estate, power, newspapers etc., donated the highest amount of Rs 419.69 cr, between FY 2013-14 to 2015-16, to the National Parties.

c) Between FY 2012-13 & 2015-16, manufacturing sector was the second highest overall contributor, contributing a total of Rs 123.67 cr to the 5 National Parties.

Political parties which received maximum contributions from various sectors
1. BJP, INC and NCP, all three received the maximum contributions from Trusts & Group of companies. BJP received the highest, Rs 287.69 cr from Trusts & Group of companies, followed by INC with Rs 129.16 cr and NCP with Rs 15.78 cr.
2. BJP received the highest donations from all 14 sectors including Real-estate (Rs 105.20 cr), Mining, construction, exports/ imports (Rs 83.56 cr), Chemicals/ Pharmaceuticals (Rs 31.94 cr) etc.

Donations without PAN details and address:
1. A total of 1933 donations through which national parties received Rs 384.04 cr do not have PAN details in the contribution form.
2. National parties have received Rs 355.08 cr from 1546 donations which do not have address details in the contribution form.
3. 99% of such donations without PAN and address details worth Rs 159.59 cr belong to the BJP.

Unsegregated donations:
1. Political parties reported receiving 262 donations worth Rs 10.48 cr from such corporate entities who have zero internet presence or if they do there is ambiguity about the nature of their work.
2. Contact details of most of these companies were unavailable in cases where they were visible online.

Recommendations of ADR

The Supreme Court gave a judgment on 13-09-2013, declaring that no part of a candidate affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs 20,000, should be blank.
All donors who have donated a minimum of Rs 20,000 as a single or multiple donations should provide their PAN details.
Date on which the donation was made should be recorded by the party and submitted in Form 24A.
Any party which does not submit its donation statement to the ECI on or before 31^st Oct should be heavily penalized and its income should not be tax-exempted.
A total of Rs 159.67 cr was collected by the National Parties from 1062 corporate donors without obtaining their PAN and Address details. Such incomplete contributions reports must be returned to the parties by the ECI, to deter them from providing incomplete information.
Corporates should make details of their political contributions available in public domain through their websites (in annual reports or in a dedicated page) for increasing transparency in political financing.
Annual scrutiny of donations reports of National, Regional and unrecognized parties should be initiated by a dedicated department of the CBDT, to discourage donations from shell companies or illegal entities.

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Mukul Sangma accuses PM Modi of being ‘brand ambassador’ of corporate houses

Thu, 15 Dec 2016 07:43:12 +0000

Meghalaya chief minister Mukul Sangma on Wednesday accused Prime Minister Narendra Modi of being a “brand ambassador” of corporate houses promoting their businesses through the demonetization exercise.

“I have analysed it (demonetization) and I have seen that the main agenda of this government and the Prime Minister is not to fight corruption or black money or so-called funding of terrorist organisation. The whole agenda now seems to be in promoting some particular business benefiting some limited corporate houses,” Sangma told reporters here.

“I have not seen anybody in the world where a Prime Minister starts acting as a brand ambassador for products monopolised by a few corporate houses,” he said, referring to Modi for being part of advertisements of some private companies, which he did not name.

“This is something which is not in sync with the rhetoric.

What you see today is he (Modi) was in a hurry to please those business houses and this is how I can interpret,” Sangma said.

The Chief Minister criticised the demonetization move saying it had “completely dislocated the whole momentum of economic activities at all levels. This (demonetization) has been done without due diligence and the worst hit are the marginalised farmers.”

“They (farmers) are not finding buyers because cash is not there. There is a short circulation of cash. With the Rs 2,000 notes, both the buyer and seller are equally helpless,” he added.

Courtesy: Janta Ka Reporter

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