Corporate funding to political parties should be treated as expenditure in order to increase transparency in financial statements and curb black money flow, Accounting regulator ICAI has said. It added that the Companies Bill should incorporate this provision.
“We wish if a company makes contributions (funding) to any political party then it should be treated as an expenditure..it will lead to much more transparency in financial statements and it will also reduce black money,” ICAI President Mr Amarjit Chopra said yesterday.
“Let it be more transparent...from where political parties are getting funding (for carrying out their activities),” he observed.
Noting that companies were making financial contribution to election parties in a “clandestine” manner, he suggested certain minimal percentage of total turnover of a company could be allowed as an expense for the purpose of providing funds to political parties.
“Any minimal percentage of total turn over to be contributed (by a company) could be allowed as expenditure,” he said.
Throwing light on current practice adopted by corporate for giving funds to political parties, Institute of Chartered Accountants of India President disclosed that several companies routed the funds meant for political parties by creating trusts.
“Various companies have created trusts…they make payment to these trusts and through these trusts they are routed (to parties)…every top industrialist is doing that,” he asserted.