Aditya Birla Group, Jindal Steel and Power among largest buyers of electoral bonds in resource-rich Odisha

Mining, steel and aluminium companies are top donors to the Naveen Patnaik-led Biju Janata Dal. The ruling party of Odisha is the fifth-largest beneficiary of electoral bonds in the country, at Rs 775.5 crore between April 2019 and February 2024

By Forbes India

Published: Mar 22, 2024 06:10:43 PM IST

Updated: Mar 22, 2024 09:21:23 PM IST

Odisha’s Biju Janata Dal (BJD) received Rs 775.5 crore by encashing around 861 electoral bonds to 42 donors between April 2019 and February 2024. Most of the donors are mining, iron, aluminium and steel companies that have multi-crore projects in the state, which is rich in mineral reserves. Image: Bhushan Koyande/Hindustan Times via Getty Images

The Election Commission of India (ECI) released a detailed list of electoral bond buyers and recipient political parties on March 21. The data, provided by the State Bank of India following orders of the Supreme Court, includes bond numbers that help match donors with political parties whose bonds they purchased.

BJD, led by Naveen Patnaik, who, at 77, is one of the longest-serving chief ministers in the country, stands fifth in line at the national level in terms of value of electoral bonds encashed by political parties. It is preceded by the Bharatiya Janata Party (BJP), the All India Trinamool Congress (AITC), the President, All India Congress Committee (INC), and the Bharat Rashtra Samithi (BRS).

Leading the group of donors to the BJD is Aditya Birla Group-owned Essel Mining and Industries Limited (EMIL), which donated Rs 174.5 crore through electoral bonds. The company started its operations in 1950 with iron-ore mining in Odisha and is now India’s largest mine developer and operator, according to its website. EMIL has an iron ore beneficiation and pelletisation plant in the Keonjhar district of Odisha and operates the Bhubaneswari Open Cast Project (OCP), which is the largest coal mine in the state.

Other Aditya Birla Group companies that have purchased electoral bonds of the BJD include Grasim Industries (Rs 10 crore), its subsidiary UltraTech Cement (Rs 10 crore), and Utkal Alumina International (Rs 70 crore). Utkal Alumina, the third-largest donor to the BJD, operates in the Rayagada district of Odisha, where its operation comprises “a 2.12 MTPA [million tonnes per annum] alumina refinery, captive Baphlimali bauxite mines of 8 MTPA with valid lease title up to February 2048, and a captive co-generation power plant of 90 MW along with a 5 MW solar power plant,” according to the company website.

As per an article in The Indian Express, the second biggest donor to the BJD is Jindal Steel and Power, which purchased Rs 100 crore worth of electoral bonds. The company has a 6 MTPA steel plant in Angul, Odisha, and is looking to double that capacity to 12 MTPA. Other donors to the BJD, as per the article, include Rashmi Cement (Rs 45 crore), and mining companies Rungta Sons (Rs 50 crore), SN Mohanty (Rs 45 crore), Vedanta (Rs 40 crore), Penguin Trading and Agencies (Rs 30.5 crore).

As per its state Department of Steel and Mines, Odisha has 28 percent of India’s total deposits of iron ore, 24 percent coal, 59 percent bauxite and 98 percent chromite, which has attracted mining and metallurgical companies to the state.

“No company can run mining activities in the state without the active cooperation of the state government. That is the reason you see electoral bond donations,” says senior Odisha-based journalist and political analyst Rabi Das, who adds that donations like electoral bonds help the state government broaden the reach of their welfare and populist schemes, which, ahead of the general elections, has reached “90 percent families in the state”.

Electoral bonds were the sole source of donations to the BJD in FY22 and FY23, totalling to Rs 291 crore and Rs 152 crore respectively, as per the annual audit report 2022-23 submitted by the party to the ECI.

Odisha has the lowest debt-to-GDP ratio in the country, which stood at 13.1 percent, with its gross state domestic product (GSDP) at Rs 8.65 lakh crore as of FY23-24. Patnaik told Forbes India in 2020, when he completed two decades as chief minister, that his government will have a renewed focus on industry and manufacturing so that there is renewed impetus to Odisha’s revenue generation capacity.

“The BJD has always been favourable to mining and related industries because it believes that Odisha’s natural resources are the only source of major revenue for the state exchequer,” says Gyananranjan Swain, political analyst and professor, Gangadhar Meher University, Sambhalpur, Odisha. He adds that while the state has also encouraged tourism, organic farming, fish cultivation, and given an impetus to the liquor industry, the monetary boost to the state’s economy is nowhere near what it receives from mining, steel and aluminium companies. That said, Swain adds, the long-term implications of unrestrained mining is unsustainable, and that the state government should also focus on encouraging small-scale local entrepreneurship that is both scalable and eco-friendly.