ADR analysis of audit reports: Most funds spent on
GN Bureau | January 16, 2020
Electoral bonds, introduced in January 2018 to bring in transparency in political funding, has emerged as the preferred route for making donations to parties, according to an analysis of the parties’ audit reports by the Association of Democratic Reforms (ADR).
“Given the anonymity provided to donors by the scheme, it is seen that Electoral Bonds have emerged as the most popular mode of donations to National Political parties for FY 2018-19. More than 52% of the total income of six National Parties came from Donations through Electoral Bonds (Rs 1,931.43 cr), wherein identity of the donors is not disclosed to the public,” the ADR said in a release on Wednesday.
“Of the regional parties that have submitted their audit reports, only five (BJD, TRS, YSR-C, JDS & SDF) have declared receiving donations through Electoral Bonds worth Rs 490.59 cr.”
Political parties have multiple sources of funding and thus accountability and transparency should be an important aspect of their functioning. It is essential to have comprehensive and transparent accounting methods and systems which should reveal the true financial position of the parties, the organization has noted.
The Election Commission of India (ECI), in its letter of November 19, 2014 to the presidents/general secretaries of all parties, stated that it was mandatory for the parties to submit details of their audited reports to it. The ADR has then analysed the total income and expenditure incurred by the National Parties (except NCP) during FY 2018-19, as declared by them in their IT Returns submitted to the ECI.
The National Parties include Bharatiya Janata Party (BJP), Indian National Congress (INC), Bahujan Samaj Party (BSP), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India (Marxist) (CPM) and All India Trinamool Congress (AITC).
Status of submission of audited reports
The due date for submission of annual audited accounts for the parties was October 31, 2019. AITC, CPM and BSP submitted their audit reports on time while BJP submitted them after 24 days, INC and CPI submitted the same after 42 days, while the audit report of NCP is still not available in public domain – 76 days since the due date for submission.
Total Income and Expenditure
The six National Parties have declared a total income of Rs 3,698.66 cr, collected from all over India. BJP has shown the highest income amongst them, an income of Rs 2410.08 cr during 2018-19. This forms 65.16% of the total income of the six National Parties during the year.
INC declared the second highest income of Rs 918.03 cr which forms 24.82% of the total income of the six National Parties.
BJP spent only 41.71% (Rs 1,005.33 cr) of its total income, while INC spent 51.19% (Rs 469.92 cr) of its income.
Between FY 2017-18 and 2018-19, the income of BJP increased by 134.59% (Rs 1382.74 cr) from Rs 1027.34 cr during FY 2017-18. On the other hand, the INC income jumped by 360.97% (Rs 718.88 cr) from Rs 199.15 cr during FY 2017-18.
During the period under review, the highest increase in income was declared by AITC of 3628.47% (Rs 187.48 cr), up from Rs 5.167 cr to Rs 192.65 cr.
Top three sources of income
The National Parties have declared donations/contributions as one of their three main sources of income. Among those receiving highest income from donations/contributions are: BJP – Rs 2354.02 cr, INC – Rs 551.55 cr, AITC – Rs 141.54 cr, CPM – Rs 37.228 cr and CPI – Rs 4.08 cr.
Voluntary Contributions of Rs 2354.02 cr declared by BJP form 97.67% of its total income during FY 2018-19. Declaration of Rs 551.55 cr under grant/ donations/ contributions by INC forms the top most income of the party, contributing 60.08% of its total income during FY 2018-19.
Top three items of expenditure
The maximum expenditure for BJP has been towards Election/General Propaganda which amounted to Rs 792.39 cr followed by expenses towards Administrative Costs, Rs 178.35 cr. INC spent the maximum of Rs 308.96 cr on Election Expenditure followed by expenditure of Rs 125.80 cr on Administrative and General Expenses.
Meanwhile, as per the data shared by SBI in response to ADR’s RTI application, Electoral Bonds worth Rs 2539.58 cr were redeemed by parties in FY 2018-19. Of this, 76% was received by six National Parties. The total amount of Electoral Bonds declared by National and Regional parties for FY 2018-19 so far is Rs 2422.02 cr. “It may be noted that audit reports of NCP and many other Regional parties are not yet available in the public domain. Many registered unrecognised parties have also declared contributions through Electoral Bonds to ECI in sealed covers. Once this data is available and subsequently if these parties declare receiving donations via Electoral Bonds, the total share of donations received from Electoral Bonds may increase further,” the ADR has observed.
“Some of the National parties have expressed great concern and have been highly critical of the Electoral Bonds Scheme, 2018. They criticize the scheme at every public debate possible and one National Party has even filed a PIL against the Electoral Bonds Scheme, 2018. However, it is ironic that these same parties continue to accept donations via Electoral Bonds,” it added.
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