India’s seven national parties got 67% of funds from ‘unknown sources’ in 2018-’19, says report

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09.03.2020

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India’s seven national parties have received Rs 3,749.37 crore in the 2018-’19 financial year with 67% of it coming from “unknown sources” that cannot be traced, the Association for Democratic Reforms said on Monday.

Out of the total amount of funding, the country’s ruling Bharatiya Janata Party accounted for Rs 1,612.04 crore – 64% of the total income of national parties – from untraceable sources. “This income of BJP forms more than 1.5 times more the aggregate of income from unknown sources declared by the other 5 National Parties (Rs 900.94 cr),” the report said.

The Association for Democratic Reforms is a non-profit organisation that works on political accountability. Its researchers studied the tax returns and donation reports filed with the Election Commission by the BJP, the Congress, the Bahujan Samaj Party, the Nationalist Congress Party, Trinamool Congress, Communist Party of India (Marxist), and the Communist Party of India. The schedules and annexures were unavailable for the 2017-’18 period for the CPI(M), and was therefore not evaluated in the study.

The report said the Bahujan Samaj Party has 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.

Among the other six, the Congress declared Rs 728.88 crore – 29% of the total income of all the parties. The share of the parties’ unknown income from electoral bonds was Rs 1960.68 crore in the 2018-’19 period.

The national parties collected Rs 11,234.12 crore between the period 2004-’05 and 2018-’19. The parties also received Rs 71.44 lakh in cash, according to the donations report of 2018-’19 financial year. The Congress and the NCP had earned Rs 3902.63 crore through the sale of coupons between 2004-’05 and 2018-’19, the report added.

The report has defined “income from known sources” as donations above Rs 20,000 whose donor details were made available by the parties. Donations less than Rs 20,000 declared in tax returns as income but without identifiable sources were classified as earnings from unknown sources. Such sources include electoral bonds, coupons, relief funds, and contributions from meetings.

Electoral bonds are monetary instruments that citizens or corporate groups can buy from a bank and give to a political party, which is then free to redeem them for money. Former Union Finance Minister Arun Jaitley had announced this scheme in his Budget speech in 2017, claiming the government wanted to clean up political funding and make it a transparent process. The bank started selling the bonds from March.

However, the entire process is anonymous since no one is required to declare their purchase of these bonds and political parties do not need to declare the source of the money. The money is unlikely to be “black” since it has to be given by cheque, the government has reasoned.