Running a party and contesting elections costs money. Here’s how the TDP and TRS rake it in.

One of the main criticisms of a proposal to cap cash donations to political parties announced by Finance Minister Arun Jaitley in the Union Budget is that it is a “sham” reform and will do nothing to stop political corruption due to a continued lack of transparency in the donation process.

The issue of transparency gains currency in the wake of a report released last week by the non-profit Association for Democratic Reforms which said that all political parties in India – national and regional – together received Rs 11,367.34 crores between 2004-’05 and 2014-’15 of which Rs 7,833 crores, or 69%, was from undisclosed sources.

The report compiled data from affidavits filed by political parties with the Election Commission of India over this 11-year period.

Among regional parties, the ruling Telugu Desam Party in Andhra Pradesh was amongst the top five in terms of income, according to the report. It said the party’s total income during this period was Rs 145 crores of which Rs 45 crores, or 31%, came from undisclosed sources.

In neighbouring Telangana, the ruling Telangana Rashtra Samiti’s total income in the period under scrutiny was Rs 35.92 crores of which Rs 25.21 crores, or 70%, came from undisclosed sources. Similarly, the Opposition YSR Congress, founded in 2013, whose founder Jaganmohan Reddy is battling the Central Bureau of Investigation with regard to cases of disproportionate assets against him, declared a sum of Rs 23.47 crores between 2012-’13 and 2014-’15 of which Rs 13.81 crores or 59% was from undisclosed sources.

Here’s a look at how the two ruling parties in Andhra Pradesh and Telangana – Telugu Desam Party and Telangana Rashtra Samiti – raise their funds.

TDP style of fund raising

Founded by NT Rama Rao in 1982, the Telugu Desam Party emerged on the political landscape of the erstwhile united Andhra Pradesh as a crusader against the “corrupt Congress”. Rao was one who never shied away from accepting the huge donations that poured in from the state’s Kamma caste – a community that dominates industry and the film business.

The Telugu Desam Party declares its balance sheet every year at its Mahanadu – a three-day-long party event. This is where party workers and leaders compete with each other to make donations to the party. These donations run into several crores of rupees.

Wealthy individuals tend to do well within the party.

For instance, Kambhampati Rammohan Rao, who got a Rajya Sabha ticket from the Telugu Desam Party twice, is the owner of a Honda franchise in Hyderabad. He is also the party’s troubleshooter in Delhi, as the state government’s special representative with the Union government.

According to people in the Telangana Anti-Corruption Bureau, a newspaper magnate, a television channel owner, real estate contractors, hoteliers, educational institution owners and industrialists have long been the close confidantes of party leader and Andhra Pradesh Chief Minister Chandrababu Naidu, the son-in-law of the party founder.

At present, Union Minister and industrialist YS Chowdhary, state minister P Narayana and Rajya Sabha MP C Ramesh are in favour with Naidu. They both happen to be key financiers of party activities as well.

“There is nothing wrong in supporting the Telugu Desam Party as we believe that Naidu is the only saviour of Andhra Pradesh now,” said Narayana, who heads the Narayana Group of Educational Institutions in South India.

Party spokesperson Aravind Kumar Goud said that Naidu had the knack of organising resources that the party needed to carry out its activities.

“No one can find fault with Naidu’s capacity to organise men and material. Otherwise, how could two massive yatras – Meekosam [For you] and Vastunna Meekosam [I am coming, for you],” asked a Goud. While the Meekosam yatra was held in 2007-’08, Vastunna Meekosam was a 2013 padyatra, where Naidu covered 2,300 km on foot.

Goud also added that unlike other Congress leaders, Naidu took care of party workers and their welfare.

“Do you know that Naidu spent over Rs 50 lakhs per annum in maintaining a canteen providing free food, tiffin, and boarding for party workers at the NTR Trust Bhavan, even when he was out of power,” asked Y Rajendra Prasad, another party spokesperson.

The party also operates a blood bank, NTR memorial schools and junior colleges in Hyderabad, besides an old age home for senior party workers in distress. All this costs money.

During an investigation into the cash-for-vote scandal in 2015 in which Telugu Desam Party men were filmed attempting to bribe an independent legislative council member to vote for the party in the elections to the Telangana Legislative Council, Telangana Anti-Corruption Bureau sleuths found that the source of the Rs 2-crore cash that was on offer came from small district cooperative banks in the coastal district of Rayalaseema.

Further enquiries revealed that members of the Telugu Desam Party controlled over 100 such co-operative banks in Andhra Pradesh.

How TRS raises funds

In the Telangana Rashtra Samiti, which rules Telangana, party founder and supremo K Chandrasekhar Rao, popularly known as KCR, is the kingpin of fund raising.

KCR, a landlord from the Velama community, who grows red and yellow peppers, potatoes, bitter gourd, mango and raises milch cows, has said in the past that politics became his full-time job only after the success of the Telangana movement and the formation of the Telangana Rashtra Samiti in 2001.

In the initial days of forming the party, it received financial and institutional support from Telangana industrialists, contractors and real estate developers. Police insiders said that it raised funds from professionals like doctors and lawyers, educational institutions, contractors and civil engineers.

The chief minister’s son KT Rama Rao, also known as KTR, studied in the US where he also worked as a software engineer. It was KTR who introduced the American-style fundraising dinners once he returned to India.

The Telangana Rashtra Samiti has organised a number of dinner meetings in the US and UK, and also in district towns, to raise funds for the party.

“The party raised funds in the American style – by hosting dinners with donors and the party chief,” said Madhusudhanachari, the Speaker of the Telangana Assembly who was earlier a Telangana Rashtra Samiti legislator.

At an event in 2003, participants paid over Rs 1 lakh per seat for the chance to dine with KCR or his son. At that time, the focus was on the Telangana movement. Such dinner events were preceded by public meetings and cultural shows where revolutionary Telugu balladeer Gaddar, and other popular folk artistes who had thrown their weight behind the movement for a separate state of Telangana, performed.

Several such meetings were also held later to raise funds to construct the party headquarters at Hyderabad’s Banjara Hills, for its election campaigns and also to support the Telangana movement.

“The Telangana fervour had brought the party funds in crores,” said senior party MP A Jitender Reddy.

But Telangana Rashtra Samiti spokesperson and secretary general K Keshav Rao indicated that fundraising wasn’t that easy.

Commenting on the Association for Democratic Reforms report, Rao said that it had been tough to get political funding in a backward state like Telangana.

“Till the other day the TDP and Congress had decreed that Telangana was just a dream and hence nobody was keen to invest in us,” said Rao. “Only in the last three years, we have been getting donations and contributions at party events and also directly.”