Why TATA won't give money to Kejriwal

The Tata group will fund new political entrant Aam Aadmi Party based only on its performance in the upcoming general elections and not before.

The group provides funding to political parties through its Tata Electoral Trust based on their performance in both the outgoing and incoming Parliament.

"The question is being raised about new political parties. Clearly, they have no representation in the outgoing Parliament but they may have a representation in the incoming Parliament. If they do well in their representation, they will automatically receive funds," Tata Sons Group Executive Council Member and Brand Custodian Mukund Rajan told PTI.

Asked about funding the AAP for the upcoming Lok Sabha elections starting on April 7, he said: "If they perform well in the election, they will receive cheque after the election. Many of the expenses that parties book don't necessarily get paid before the elections. Many of them will be settling that budget and bills long time afterwards."

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Explaining why AAP will be ineligible for funds before the polls, Rajan said: "The trust has no flexibility. The trustees are governed by the provisions of the trust and the trust mandate requires it to distribute all corporate funds that it receives to all political parties on a pro-rata basis.”

He said 50 per cent of the funding is on the basis of the performance of the outgoing Parliament and the rest is based on representation in the incoming Parliament.

On whether the new party has approached the Tatas for support, Rajan said: "I am not specifically aware of any reach-out that they have done formally to us but I do know

that many people are aware of the existence of the electoral trust because it was a Tata initiative many years back to introduce transparency in electoral funding in India."

Companies have been registering electoral trusts under a new framework that provides tax benefits for funds extended by firms to political outfits.

As the elections draw close, parties do get in touch to understand if they are eligible for funds, Rajan added.