Political parties don’t bank on supporters

The Association for Democratic Reforms (ADR) on Tuesday revealed that a study of the Returns submitted by political parties to the Election Commission shows that 69% of the receipts of these parties are from ‘unknown’ sources. The other salient points of the finding are as follows:

• Members of political parties in the country pay a miniscule part of the parties’ annual income, reveals the report
• Only 15% of the total income of political parties attributed to membership fees, sale of assets, sale of publications, bank interest, levy etc.
• Only 16% of the income is acknowledged as having come from identifiable donors
• 69% of the income said to be from unknown donors donating below ₹20,000 each

A striking finding of the report is that six national parties and 48 regional parties together have disclosed a total ‘income’ or receipt of only ₹11,367 crore in 10 years between 2004-05 and 2014-15.

Under the law, political parties are not required to disclose names of donors who donate less than ₹20,000. These unknown sources also include proceeds from ‘sale of coupons, Relief Fund, Miscellaneous Income, delegate fees, voluntary contributions etc.

The ADR and the Election Commission has been arguing for reducing the ceiling for unknown donors to ₹2,000 instead of ₹20,000. The Election Commission has also recommended that Income Tax exemption be granted only to political parties which contest and win seats in the Lok Sabha or the Assembly. A blanket exemption to all political parties, it is argued, allows bigger political parties to park their money with smaller ones.

The ADR demanded that the scrutiny of financial documents submitted by the political parties to the Election Commission be conducted “annually by a body approved by Comptroller and Auditor General (CAG) and the EC” so as to enhance transparency and accountability of political parties.

As many as 12 regional parties have never filed their returns since FY 2004-05. They are PDP, AJSU, NPP, RSP, MPC, KC-M, SKM, AINRC, PDA, MSCP, HSPDP and PPA.

BSP is the only party to consistently declare receiving nil donations above ₹20,000 between FY 2004-05 and 2014-15 thus 100% of the party’s donations came from unknown sources. The total income of the party increased by 2,057% from ₹5.19 crore during FY 2004-05 to ₹111.96 crore during 2014-15.