Mining MNC Vedanta Donates Rs 155 Cr to Political Parties via Electoral Bonds, Total Rs 457 Cr in 5 Years

New Delhi: Multinational mining company, Vedanta Limited, has made substantial political donations through subscription to electoral bonds in the financial year 2022-23. According to recent stock exchange disclosures, Vedanta donated Rs 155 crore to political parties, surpassing its previous year's contribution of Rs 123 crore. This brings the company's cumulative political donations via electoral bonds to Rs 457 crore in the past five years, as reported in The Economic Times (ET) .

Read Also: Electoral Bonds: No Solution to Illegal Political Funding

The electoral bond scheme, introduced by the government in 2018 as an alternative to cash donations, has gained significant traction among various parties. The State Bank of India (SBI) is the sole authorised bank in India for issuing and encashing these bonds.

Notably, between 2018 and 2022, the Bharatiya Janata Party (BJP) emerged as the largest recipient of electoral bond donations, receiving a substantial amount of Rs 5,270 crore. The Congress received Rs 964 crore, while the Trinamool Congress (TMC) received Rs 767 crore through this scheme, according to the ET report.

Vedanta Limited's increased contribution in FY23 aligns with its latest annual report, highlighting its significant investments in growth projects, says the report. It further states that in the financial year, Vedanta invested $1.2 billion through growth capital expenditure and announced a further commitment of $1.7 billion in FY24 toward expanding its projects.

 During FY23, Vedanta Limited “achieved notable milestones in securing mining licenses”. The company was declared as the preferred bidder for multiple licenses, including the Bicholim iron ore block in Goa, Sijimali bauxite, and Ghogharpalli coal blocks in Odisha, as well as Kelwar Dabri in Chhattisgarh, making Vedanta's a key player in India’s mining sector.

Read Also: Did BJP Govt in Goa Allow Vedanta to Process Iron Ore Despite Supreme Court Ban?

Recall that Vedanta Resources (VRL), the UK-based parent company of Vedanta Limited, has been under scrutiny for its $4.2 billion payment dues in the current fiscal year. However, VRL has already paid $2 billion toward its liabilities as of June 2023, with the remaining amount due on January 21, 2024.

Interestingly, despite the huge debt burden, the mining conglomerate has continued to donate to political parties in the past five years, ever since electoral bonds were launched in India, raising transparency concerns. Several petitions are pending in the Supreme Court challenging the validity of the scheme.

The increasing use of electoral bonds in political financing has raised concerns among observers. In March, the Association for Democratic Reforms (ADR) released an analysis revealing that over half of the income of four national political parties in 2021-22 came from donations through electoral bonds. The BJP topped the list, receiving a total donation of Rs 1,033.70 crore during the financial year. The Trinamool Congress (TMC) followed, with Rs 528.143 crore, while the Indian National Congress received Rs 236.09 crore, and the Nationalist Congress Party (NCP) received Rs 14 crore. The four national parties collected a staggering Rs 1,811.9425 crore through electoral bonds, accounting for 55.09% of their total annual income, as ADR reported. 

The extensive use of electoral bonds and their impact on political financing continue to be subjects of debate and scrutiny. The transparency and accountability of these donations remain critical areas of concern, prompting discussions on electoral reforms and the need for comprehensive campaign finance regulations.