Mystery of the unknown sources of political party funding

More than 36% of the funds are untraceable, ADR analysis shows

GN Bureau | August 26, 2022


#ADR   #political parties   #funding   #ECI  
(Illustration: Ashish Asthana)
(Illustration: Ashish Asthana)

More than 36% of the funds national and regional parties have received cannot be traced and are from ‘unknown’ sources, according to an analysis carried out by the Association for Democratic Reforms (ADR) of their income tax returns and donations statements filed with the Election Commission of India (ECI).

At present, political parties are not required to reveal the name of individuals or organisations giving less than Rs. 20,000 nor those who donated via Electoral Bonds.

Detailed ADR reports can be accessed here: https://adrindia.org/content/analysis-sources-funding-national-regional-parties-fy-2020-21

Among the highlights of the ADR analysis:

* Between FY 2004-05 and 2020-21, the National Parties have collected Rs 15,077.97 cr from unknown sources.

* For FY 2020-21, 8 National political parties have declared Rs 426.742 cr income from unknown sources and 27 Regional Parties received Rs 263.928 cr income from Unknown sources.

* During FY 2020-21, INC declared Rs 178.782 cr as income from unknown sources which is 41.89% of the total income of National Parties from unknown sources (Rs 426.742 cr).

* BJP declared Rs 100.502 cr as income from unknown sources which is 23.55 % of the total income of National Parties from unknown sources.

* Top 5 Regional parties’ unknown income: YSR-Congress - Rs 96.2507 cr, DMK - Rs 80.018 cr, BJD - Rs 67.0034 cr, MNS - Rs 5.773 cr and AAP - Rs 5.352 cr.

* Out of Rs 690.67 cr as income from unknown sources, share of income from Electoral Bonds was Rs 325.06 cr or 47.06%. Electoral Bonds received by 8 National Parties (Rs 74.46 cr) and 27 Regional parties (Rs 250.60 cr).

* Combined income of INC and NCP from sale of coupons between FY 2004-05 and 2020-21 stands at Rs 4261.83 cr.

 * There are reporting discrepancies in the audit and contribution reports of 7 political parties for FY 2020-21. These seven parties include AITC, CPI, AAP, SAD, KC-M, AIFB and AIUDF. In most cases, the share of donations above Rs 20, 000 declared by parties in their contribution reports does not match such income shown in their audit reports. This makes it difficult to arrive at an accurate figure of their income coming from unknown sources.

For this analysis, 8 National parties (BJP, INC, AITC, CPM, NCP, BSP, CPI and NPEP) and 27 Regional Parties (AAP, AGP, AIADMK, AIFB, AIMIM, AIUDF, BJD, CPI(ML)(L), DMDK, DMK, GFP, JDS, JDU, JMM, KC-M, MNS, NDPP, NPF, PMK, RLD, SAD, SDF, Shivsena, SKM, TDP, TRS and YSR-Congress) were considered.

However, BSP declared that it did not receive any funds from voluntary contributions (above or below Rs 20,000)/Sale of Coupons/Electoral Bonds or Unknown Sources of income.

Income of Political Parties from Known, Other known and unknown sources

For the ADR analysis, known sources have been defined as donations above Rs 20,000, whose donor details are available through contributions reports 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.

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.

> Total income of 8 National political parties in FY 2020-21: Rs 1373.783 cr.

> Total income of 27 Regional political parties in FY 2020-21: Rs 530.703 cr.

> Total income of political parties from known donors (details of donors as available from contribution report submitted by parties to Election Commission and analysed by ADR - National & Regional parties): Rs 713.143 cr, which is 37.40 % 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 500.673 cr, or 26.30% of the total income.

> Total income of political parties from unknown sources (income specified in the IT Returns whose sources are unknown): Rs 690.67 cr, which is 36.30% of the total income of the parties.

> Out of Rs 690.67 cr as income from unknown sources, share of income from Electoral Bonds: Rs 325.06 cr or 47.06%.

Income from Unknown Sources

Out of total income of Rs 690.67 cr of 8 National and 27 Regional Parties from unknown sources, 47.06 % or Rs 325.06 cr came from Electoral Bonds.

Income from sale of coupons declared by INC, NCP & CPM formed 39.72% (Rs 169.515 cr) of income from unknown sources while Donations from Voluntary Contributions (below Rs 20,000) formed 40.12% (Rs 171.1957 cr) in income from unknown sources of the 8 National Parties.
 

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