Analysis of Sources of Funding of Regional Parties of India, FY 2018-19 The reports in both English and Hindi

Executive Summary
Political Parties play a key role in democracies as they contest elections, form governments, formulate policies and are responsible for providing governance and improving the lives of the common man. Political parties need access to money in order to reach out to the electorate, explain their goals/policies and receive inputs from people. But where do they collect their funds from?

An analysis of their Income Tax Returns and donations statements filed with the Election Commission of India (ECI) 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. As a result, a substantial amount of funds cannot be traced and are from ‘unknown’ sources. While the National Political Parties were brought under the RTI Act by the CIC ruling in June 2013, they have still not complied with the decision. Full transparency is, unfortunately, not possible under the current laws, and it is only the RTI that can keep citizens informed.

Income of Political Parties from Known, Other Known and Unknown Sources
For this report, known sources have been defined as donations above and below Rs 20,000, whose donor details are available through contribution reports as submitted by regional parties to the ECI.

The unknown sources are income declared in the Annual Audit reports 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.

Other known sources of income include sale of moveable & immoveable assets, old newspapers, membership fees, delegate fee, bank interest, sale of publications and levy whose details would be available in the books of accounts maintained by political parties.

Association for Democratic Reforms (ADR), in its previous report dated 22nd August, 2019, analysed 28 Regional parties who filed both their Annual Audit and Contribution reports. For FY 2017-18, total income of Regional parties amounted to Rs 183.39 cr. Rs 31.82 cr or 17.35% of this came from unknown sources.

For this analysis, 52 Regional (recognized) parties were initially considered, but out of them only 26 have filed both their Annual Audit and Contribution reports, remaining 11 had not submitted either one of the reports. 15 Regional parties’ none of the two reports are available on the ECI website at the time of preparation of this report.

The Annual Audit and Contribution reports of Regional parties such as TRS, SAD and LJP are available on the website, but parties’ donations declaration show discrepancies between data in the both reports for FY 2018-19. Therefore, these parties have not been analyzed in this report.

Total income of 23 Regional political parties in FY 2018-19: Rs 885.956 cr.

Total income of political parties from known donors (details of donors as available from Contribution report submitted by parties to Election Commission): Rs 257.14 cr, which is 29.02% of the total income of the parties.

Total income of political parties from other known sources (e.g., Membership fees, bank interest, sale of publications, party levy etc.): Rs 147.54 cr, or 16.65% of total income.

Total income of political parties from unknown sources (income specified in the audit reports whose sources are unknown): Rs 481.276 cr, which is 54.32% of the total income of the parties.

Chart: Source of Income of Regional Parties, FY 2018-19

Chart: Top 10 Regional Parties with highest unknown income declared during FY 2018-19

Income from Unknown Sources
Rs 481.276 cr of the total income of Regional Parties came from unknown sources, 90.798% or Rs 436.99 cr of this came from Electoral Bonds.

Income from Voluntary contributions (below Rs 20,000) formed 7.72% (Rs 37.14 cr) and sale of coupons formed 1.48% (Rs 7.134 cr) in income from unknown sources of the 23 Regional parties.

Chart: Types of Unknown Sources declared by Regional Parties in their audit reports, FY 2018-19

Observations of ADR
Out of a total of 52 Regional Parties, 11 Regional Parties have not submitted their Contribution reports for FY 2018-19. For 15 Regional parties’, none of the two reports are available on the ECI website.

TRS, SAD and LJP parties’ both statements are available on the website, but parties’ donations data show discrepancies as declared in their Annual Audit report and Contribution report (donations above Rs 20,000) for FY 2018-19 as shown below. Therefore, these parties have not been analyzed in this report.

Party

Total Voluntary Donations/Contributions declared in audit report

Contribution Report (in Rs Cr)

Total Difference

(A-B=C)

Voluntary Donations/Contributions received from

Amounts (in Rs Cr)

(A)

Form 24 A (Above Rs 20,000) (B)

TRS

Electoral Bonds

141.5

141.5

0

Others Donations

41.17

41.275

Rs – 0.105 cr

Total

Rs 182.67 cr

Rs 182.775 cr

Rs – 0.105 cr

SAD

Grants/Donations/Contributions

1.652

1.754

Rs – 0.102 cr

LJP

Donations

0.085

0.515

Rs – 0.43 cr

The amount of total contributions declared by TRS, SAD and LJP in their audit reports is less than the amount of total donations (above Rs 20,000 only) declared in their contribution reports by Rs 10.50 lakhs, Rs 10.20 lakhs and Rs 43 lakhs, respectively. This is an example of disregard of the parties towards the guidelines formulated for transparency and disclosure requirements.

During FY 2018-19, total income of Regional Parties from Unknown Sources amounted to Rs 481.276 cr and constituted 54.32% of their total income as declared in their audit reports. 90.798% or Rs 436.99 cr of this came from Electoral Bonds, and Regional Parties collected Rs 37.14 cr from Voluntary contributions.

Some of the top Regional Parties to declare highest unknown income include BJD (Rs 213.543 cr), YSR-C (Rs 100.504 cr), Shivsena (Rs 60.73 cr), JDS (Rs 39.134 cr) and TDP (Rs 37.78 cr).

Regional Parties such as the SP, DMK, AAP, GFP, MNS and NPF provided details of donations below Rs 20,000 also.

Contact Details

Media and Journalist Helpline

+91 80103 94248

Email: adr@adrindia.org

Maj. Gen Anil Verma (Retd.)

Head

Association for Democratic Reforms & National Election Watch

anilverma@adrindia.org

Prof Jagdeep Chhokar

IIM Ahmedabad (Retd.)

Founder Member,

Association for Democratic Reforms & National Election Wa

jchhokar@gmail.com

Prof Trilochan Sastry

IIM Bangalore

Founder Member,

Association for Democratic Reforms & National Election

tsastry@gmail.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s