The demonetisation drive and the consequent opposition din in Parliament serve to highlight the opaque funding system of political parties that receive most of their funds in cash, deposit them in banks, and issue cheques for up to 90% of the money collected.
TOI studied the latest audited accounts of the parties and found most to have plenty of cash in hand. The cash in hand and bank balance of UP's ruling Samajwadi Party (SP) was Rs 583 crore as on March 31, 2016. Its main rival BSP has a bank balance of Rs 514 crore. While BSP collected all the funds from 'unknown donors', mostly in cash, SP too received the majority of its donations in cash and from contributors who don't find mention in any record book.
The two leading national parties, BJP and Congress, too have, year-after-year, collected huge monies — the cash in hand and bank balance of BJP was Rs 653 crore and that of Congress Rs 601 crore as on March 31, 2015. BJP and Congress have not filed audited accounts with theElection Commission (EC) for the financial year ending March 31, 2016, much beyond the deadline. Congress has been reluctant to furnish the audited accounts, and wrote several times to the EC questioning its jurisdiction in implementing such transparency measures.
Far from cleaning their stables, these parties are vigorously fighting it out in court to retain the right to receive contributions from unknown donors and claim tax exemptions too. When Congress was detected with Rs 25 crore in unaccounted for money, an income made in 1994-95 for which it failed to explain the source to income tax authorities, the tax authorities withdrew its exemption. The party then moved the Delhi high court and, after receiving an adverse judgment, moved the Supreme Court against it.
The CPM too has a large bank balance of Rs 286 crore (as on March 31, 2016), and continues to collect cash. According to an expenditure statement submitted by the party to the EC on July 3, its gross receipts during the assembly polls in West Bengal and Kerala (March-May 2016) were Rs 60 crore — almost 57% of this, or Rs 34 crore, was collected in cash. But more than 68% of the party's total expenditure of Rs 32 crore was by way of cheque. According to an analysis by the Association for Democratic Reforms, an NGO working for electoral reforms, more than 60% of the total income of parties in 2014-15 was from unknown sources and in cash. These parties have also refused to furnish any details to the I-T department as to who contributed this amount, merely putting them under the heads of "sale of coupons, relief fund, miscellaneous income, voluntary contributions and donations received during morchas".
The source of about 50% of donations received by BJP (Rs 434 crore) in 2014-15 remains unknown. In case of CPM, only 6% of Rs 59 crore came from known sources. Rest of the donors are unknown and the party has not furnished any details, the ADR report said for accounts and I-T returns it analysed till 2015. In case of Congress, the unknown donors were to the tune of 38% of the total contributions.
