69 per cent of parties’ income sources unknown, study reports

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A private money trader counts rupees at a shop in Mumbai August 1, 2013. REUTERS/Vivek Prakash/File Photo

A study by the Association for Democratic Reforms has found that nearly 69 per cent of the total income of national and regional parties comes from unknown sources. Parties are not required to reveal the name of individuals or organisations donating more than Rs 20,000, which allows sources for large amounts to go undisclosed.

From a study of contribution statements by parties to the Election Commission over 10 years from 2004-05 to 2014-15, ADR noted that the total income of parties, both national and regional, was over Rs 11,367 crore. Of this, Rs 7,832 crore came from unknown sources.

Professor Jagdeep Chhokar, founder member of National Election Watch, ADR, said government decisions such as demonetisation will be effective only when political funding is made transparent. Unaccounted money will not be removed from the system unless, he said, political parties are made accountable.

“It is largely believed that political funding is the source of all black money,” he said. “It begins with people spending more than they are permitted to spend in elections. For this they go to people who will give them unaccounted money and an unstated understanding takes place between the politician and the person concerned.”

The Congress was the highest funded party in this period with over Rs 3,982 crore. Of this, the study attributed 83 per cent to unknown sources. The BJP was a close second with over Rs 3,272 crore (65 per cent unknown sources) and the CPM a distant third at just under Rs 893 crore (53 per cent unknown sources).

Among the regional parties, Rs 766 crore or 94 per cent of the total income of the Samajwadi Party, and Rs 88 crore or 86 per cent of the income of SAD are from unknown sources, the ADR report said.

The BSP, a national party, stands out for having consistently declared receiving no donations above Rs 20,000. As such, there were no “known sources” (donors) for its 10-year income of just under Rs 764 organisations demonetisation crore. organisations demonetisation The ADR report attributed nearly 59 per cent (over Rs 448 crore) to unknown sources and the rest to “other known sources” (sale of assets, membership fees, etc).

Among national parties, the BJP tops the list for declared donations over Rs 20,000, a total of just under Rs 918 crore. “The donations declared by BJP is more than twice the donations declared by the Congress during the same period,” the report notes. The Congress declared donations of a little over Rs 400 crore.

The income of national parties from unknown sources increased fourfold from Rs 274 crore during 2004-05 to nearly Rs 1131 crore during 2014-15.

The source for the data used in the report was audited accounts contribution statements submitted by the parties to the Income Tax Department and the Election Commission.

The EC has recommended that details of all donors who donate above Rs 2,000 be declared in the public domain. Supporting the ECI for its “strong stand” to enforce reforms in funding of parties, the ADR said it hopes these reforms are proactively taken up by the government for implementation.