Political Parties play a key role in democracies. Parties contest elections, form governments, formulate policies and are responsible for providing governance. To reach out to the electorate, explain their goals and policies, political parties seeks funding. Corporate houses, general public funding contributes immensely. Exuberant spending during election raises question on funding of the political parties.
Most of the political parties, its’ leaders are accused of corruption and to ensure transparency in the funding and income of the political parties, the National Political Parties were brought under the RTI Act by the CIC ruling in June 2013, but ironically haven’t abide with the decision.
An analysis of their Income Tax returns and donations statements filed with the Election Commission of India shows that the sources remain largely unknown. At present, political parties are not required to reveal the name of individuals or organizations giving less than Rs. 20,000 nor those who donated via Electoral Bonds. As a result, more than 50 percent of the funds cannot be traced and are from ‘unknown’ sources.
As per ADR observations between Financial Year 2004-05 and 2017-18, the National Parties have collected Rs 8721.14 cr from unknown sources. The ruling BJP has declared Rs 553.38 cr as income from unknown sources during 2017-18, which is 80% of the total income of National Parties from unknown sources (Rs 689.44 cr). This income of BJP forms more than 4 times the aggregate of income from unknown sources declared by the other 5 National Parties.
Out of Rs 689.44 cr as income from unknown sources, share of income from Electoral Bonds was Rs 215 cr or 31%. While Indian National Congress and NCP has gained Rs 3573.53 cr from sale of coupons between 2004-05 and 2017-18.
According to the donations reports (containing details of donations above Rs 20,000), Rs 16.80 lakhs was given to the National Parties by cash. Mode of contribution of Rs 689.44 cr of unknown sources will remain unknown.
For this report, known sources have been defined as donations above Rs 20,000, whose donor details are available through contributions report as submitted by national parties to the ECI.
The unknown sources are income declared in the IT returns but without giving source of income for donations below Rs. 20,000. Such unknown sources include ‘Donations via Electoral Bonds’, ‘sale of coupons’, ‘relief fund’, ‘miscellaneous income’, ‘voluntary contributions’, ‘contribution from meetings/ morchas’ etc. The details of donors of such voluntary contributions are not available in the public domain.
Total income of 6 National political parties in FY 2017-18: Rs 1293.05 cr.
Parties earn Rs 467.13 cr, which is 36% of the total income of the parties, from known donors (details of donors as available from contribution report submitted by parties to Election Commission). While Rs 136.48 cr, or 11% of total income were came from sale of assets, membership fees, bank interest, sale of publications, party levy etc.
Income from unknown sources
Out of total income of Rs 689.44 cr of 6 National Parties from unknown sources, 51.38% or Rs 354.22 cr came from Voluntary contributions (below Rs 20,000).
Donations from Electoral Bonds formed 31.18% (Rs 215 cr) in income from unknown sources, while income from sale of coupons declared by INC and NCP formed 16.78% of income from unknown sources of the six National Parties.