Large funding of political parties show remains from unknown sources

 T R Ramachandran 08 Apr 2017

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Sources of political parties from where they collect funds remain largely unknown, an analysis of their Income Tax returns and statements filed with the Election Commission of India (ECI) shows. The analysis was carried out by the Association for Democratic Reforms (ADR). It said that at present, political parties are not required to reveal the name of individuals or organizations giving less than Rs. 20,000. As a result, over two-thirds of the funds cannot be traced and are from âÂÂunknownâ sources, ADR’s analysis said. 

This becomes very relevant in the light of recent events when demonetization was announced so as to weed out black money from the society. 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, it said. 

The contribution statements, submitted by the political parties declaring names and other details of donors who contribute above Rs 20,000, are the only known sources of income of political parties. 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 âÂÂsale of couponsâÂÂ, âÂÂAajiwan Sahayog NidhiâÂÂ, âÂÂrelief fundâÂÂ, âÂÂmiscellaneous incomeâÂÂ, âÂÂvoluntary contributionsâÂÂ, âÂÂcontribution from meetings/ morchasâ 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. 

Six National parties (INC, BJP, BSP, NCP, CPI and CPM) and 51 Regional recognised were considered for this analysis, including AITC which was declared a National Party only in September, 2016. Currently there are 48 Regional recognised parties: HJC-BL and MSCP merged with INC during FY 2014-15 and MPP was de-recognised in 2013. 

Total income of National and Regional political parties between  2004-05 and 2014-15: Rs 11,367.34 crore. Total income of political parties from known donors (details of donors as available from contribution report submitted by parties to Election Commission): Rs 1,835.63 cr, which is 16% of the total income of the parties. Total income of political parties from other known sources (e.g., sale of assets, membership fees, bank interest, sale of publications, party levy etc.): Rs 1,698.73 crore, or 15% of total income. Total income of political parties from unknown sources (income specified in the IT Returns whose sources are unknown): Rs 7,832.98 crore, which is 69% of the total income of the parties.”