ADR report says bulk of political funding from unknown sources; BJP biggest beneficiary

Vibha Sharma

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Tribune News Service
New Delhi, March 9

An analysis of Income Tax returns and donations statements filed by political parties with the Election Commission of India (ECI) shows bulk of their funding is from unknown sources.

And as much as 78 per cent or Rs 1,960.68 crore accrued by them in FY 2018-19 came from electoral bonds of which the highest gainer was the ruling BJP, according to the Association for Democratic Reforms

Introduced by the Narendra Modi government as an alternative to cash donations to political parties, electoral bonds ran into a controversy over allegations that the instrument was not only skewed towards the ruling party but also flouted concept of free and transparent elections.

For its latest analysis, the ADR considered seven national parties—BJP, Congress AITC, CPI-M, NCP, BSP and CPI. BSP declared it did not receive any funds from voluntary contributions (above or below Rs 20,000) or sale of coupons or electoral bonds or unknown sources of income.

Between FY 2004-05 and 2018-19, national parties collected Rs 11,234.12 crore from unknown sources.

The total income of seven national political parties in FY 2018-19 is Rs 3,749.37 crore. Income from known donors is Rs 951.66 crore—25.38 per cent of the total income. Income from other known sources —sale of assets, membership fees, bank interest, sale of publications, party levy etc—is Rs 284.73 crore, which is 7.59 per cent of the total income.

However, income from unknown sources (income specified in ITR whose sources are unknown) is Rs 2512.98 core—67 per cent of the total income. As per the ADR, of this 2,512.98 crore, share of income from electoral bonds is Rs 1960.68 crore  (78%) the highest gainer of which is the BJP

During FY 2018-19, the BJP declared Rs 1612.04 crore as income from unknown sources—64 per cent of total income all parties from unknown sources. It is 1.5 times more than aggregate of income from unknown sources declared by other five national parties (Rs 900.94 crore), it says

Meanwhile the Congress declared Rs 728.88 crore as income from unknown sources— 29 per cent of total income of national parties from unknown sources.

“Political parties play a key role in democracies as they contest elections, form governments, formulate policies and are responsible for providing governance and improve the lives of the common man. They 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,” says the ADR.

At present, political parties are not required to reveal names of individuals or organisations giving less than Rs 20,000 nor those who donated via Electoral Bonds. As a result, more than 67 per cent of the funds cannot be traced and are from “unknown” sources, it explains.

Though national 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 not possible under current laws and it is only the RTI that can keep citizens informed, it adds

 In the 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. Unknown sources are income declared in the IT returns but without giving a source of income for donations below Rs. 20,000.

Unknown sources include ‘donations via Electoral Bonds’, ‘sale of coupons’, ‘relief fund’, ‘miscellaneous income’, ‘voluntary contributions’, ‘contribution from meetings/morchas’ etc. Details of donors of such voluntary contributions are not available in the public domain.

Other known sources of income include sale of moveable and 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.

“Since a very large percentage of the income of political parties cannot be traced to the original donor, full details of all donors should be made available for public scrutiny under the RTI. Some countries where this is done include Bhutan, Nepal, Germany, France, Italy, Brazil, Bulgaria, the US and Japan. In none of these countries is it possible for more than 67 per cent of the source of funds to be unknown, but at present it is so in India,” says the ADR.