Lok Sabha polls 2014: Congress, BJP among parties tapping banks for funds
Times of India 30.04.2014
NEW DELHI: Donations and contributions from cadres and well-wishers are not the only means of fundraising for national political parties; it turns out big parties such as the Congress and BJP have also been borrowing from banks to meet their financial needs.
Since 2001, the two major national parties - Indian National Congress and Bhartiya Janata Party - have borrowed close to Rs 200 crore through both secured and unsecured loans, according to their income-tax returns obtained under Right to Information Act.
As per their latest annual returns, in 2011-12, the Congress and BJP borrowed Rs 41.49 crore and Rs 33.80 crore, respectively. It is not clear if these loans were taken from private banks or public banks or any other financial institutions.
At present there are no clear rules on political parties taking loans in India, unlike the UK where loans or any other credit facility to registered parties are regulated under the Political Parties,Elections and Referendums Act 2000.
"As long as political parties are showing loan amount in their financial statements, I don't think there is any problem," N Gopalaswami, former Chief Election Commissioner of India, said.
A former public sector bank chief, however, said banks need to be cautious about lending to political parties. "There are no rules banning political parties from borrowing loans but a bank would be extra cautious in lending as these parties are not into any commercial activities and might default," the person said, requesting anonymity.
Parties have been taking money through unsecured loans, or loans without any collateral. In 2011-12, the BJP took unsecured loans of Rs 20 crore and the Congress borrowed Rs 99 lakh through this route.
Motilal Vora, treasurer of Congress, and Piyush Goyal, his counterpart in BJP, did not respond to queries mailed by ET.
Even state offices of these parties have been taking loans. For example, BJP's
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