The Association for Democratic Reforms (ADR) recently published a report on the cumulative income of national parties in India and found that in most cases the source of income is untraceable.
According to a recent ADR report, eight national mainstream parties have collected more than Rs 15,000 crores in small donations of Rs 20,000 or less over a period of 17 years. Many of these donations cannot be traced back to a known source and the parties have not disclosed the identities of many of them. Moreover, neither the Electoral Commission nor the Tax Authorities have conducted any research into these accumulated gifts over the years.
The national parties were the BJP, Congress, Trinamool Congress, CPM, NCP, BSP and National People’s Party. Among the regional parties were the AAP, AGP, AIADMK, AIFB, AIMIM and YSR Congress.
According to the ADR, the analysis was based on income tax returns and donation statements filed with the Election Commission of India. It found that national parties received Rs 15,077.97 crore from unknown sources between fiscal years 2004-05 and 2020-21. “For the 2020-21 fiscal year, eight national political parties and 27 regional parties have declared that they have received Rs 426.74 crore and Rs 263,928 crore respectively from unknown sources,” the report said.
Only the Congress and Nationalist Congress Party (NCP) had received Rs 4,262 crores from the “coupon sales” with anonymous backers. In 2020-21, Congress declared Rs 179 crores as revenue from unknown sources, accounting for 42 percent of national parties’ total revenue from unknown sources. Likewise, the Bharatiya Janata Party (BJP) declared 101 crores, according to the report.
According to the report, the national parties received a total of Rs 690 crores in revenue from unknown sources while the rest of the country remained in the dark about their financial situation. Along with this, the Times of India reported that 325 crores were collected through electoral bonds. Contributions to electoral bonds are also not disclosed and are treated as income from an ‘unknown source’.
The investigation shows that the parties do not comply with the Information Law Act and that more than 36 percent of the total funds received from both parties cannot be traced back to a known source.
According to media reports, many of these donations qualify for tax exemption after the legitimacy of the revenues and expenses is established by IT department regulations. The report has reason to believe that the influx of such large sums of money into national party banks from unverified sources is worrying. Concerned about the source of the money used to fund India’s elections, they have come to believe that “complete transparency is unfortunately not possible under the current system.”
