Obscure trust links India’s top businesses with Modi’s election war chest

NEW DELHI: Behind the doors of a small, non-descript office in the heart of New Delhi lies the headquarters of an electoral trust run by just two men that is the largest-known donor to India’s ruling Bharatiya Janata Party (BJP), according to a Reuters review of public records.

The Prudent Electoral Trust has raised $272 million since its creation in 2013, funnelling roughly 75% of that to Prime Minister Narendra Modi’s party. The trust’s donations to the BJP total 10 times as much as the $20.6 million it issued to the opposition Congress party, the records show.

The previous Congress-led government introduced electoral trusts in 2013 to allow for tax-exempt contribution to parties. It said the mechanism would make campaign financing more transparent by reducing cash contributions, which are harder to trace.

But some election experts say the trusts contribute to opacity around the funding of political parties in India, where this year’s general election – due to be called within weeks – is expected to return Modi to power for a rare third term, polls predict.

While Prudent does not disclose how donations made by individual corporate donors are distributed, Reuters used public records from 2018 to 2023 to track flows from some of India’s largest companies.

Eight of India’s biggest business groups donated at least $50 million in total between 2019 and 2023 to the trust, which then issued cheques for corresponding amounts to the BJP, according to the Reuters analysis.

Four companies whose transactions were identified by Reuters – steel giant ArcelorMittal Nippon Steel (ESRG.UL), telco Bharti Airtel (BRTI.NS), opens new tab, infrastructure developer GMR and energy giant Essar – have not given money to the party directly and do not appear on its donors’ list.

GMR and Bharti Airtel said in response to Reuters questions that Prudent determines how their donations are distributed.

Prudent decides “as per their internal guidelines, which we are unaware of,” said a GMR spokesman. He added that the company doesn’t “like to align with any political party.”

Bharti Airtel, which created Prudent before transferring control to independent auditors Mukul Goyal and Venkatachalam Ganesh in 2014, said it has “no influence on the decisions, directions and mode of disbursal of funds.”

Spokespeople for the other groups did not respond to calls, text messages and emails.

Goyal and Ganesh did not respond to questions sent via email and post. When asked on a brief phone call about how Prudent functioned, Goyal said: “That is something we do not discuss.”


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