Press Release: 14 Regional Parties (TRS, TDP, YSR-C, BJD, DMK, SHS, AAP, JDU, SP, JDS, SAD, AIADMK, RJD & JMM) have declared receiving donations through Electoral Bonds worth Rs 447.498 cr, which is 50.97% of their income

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Oct 11, 2021, 2:31:29 AM10/11/21

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Press Release

Date: 11th October, 2021

Analysis of Income & Expenditure of Regional Political Parties for FY 2019-20

For the complete reports in English and Hindi with details of top three sources of income, top items of expenditure of the Regional Parties and the status of submission of their audit reports for FY 2019-20, kindly refer to the attachments.

To access the reports on the website, please go to: https://adrindia.org/content/analysis-income-and-expenditure-regional-political-parties-fy-2019-20-11th-october-2021

Executive Summary

Political parties have multiple sources of funding and thus accountability and transparency should be an important aspect of their functioning. It is essential to have comprehensive and transparent accounting methods and systems which should reveal the true financial position of the parties.

The Election Commission of India (ECI), in its letter dated 19^th November,’14 addressed to the Presidents/General Secretaries of all political parties, stated that it was mandatory for the parties to submit details of their audited reports to the Commission. This report analyses the total income and expenditure incurred, all over India, by the 42 Regional Parties during FY 2019-20, as declared by the parties in their IT Returns submitted to the ECI.

The Regional Parties include BJD, TDP, SHS, DMK, SP, AAP, YSR-C, AIADMK, JDS, TRS, SAD, JDU, AJSU, RJD, JVM-P, IUML, PMK, JMM, SDF, LJP, INLD, RLD, JJP, NDPP, SKM, DMDK, AIMIM, MGP, AIUDF, GFP, AIFB, MNF, NPF, JKPDP, KC-M, AGP, ZNP, IPFT, PDA, AINRC, MPC and RLP.

Status of submission of audited reports by the Regional Parties, FY 2019-20

The due date for submission of annual audited accounts for the parties was 30th June,'21, which was an extended deadline keeping in view the Covid-19 pandemic.
37 parties had submitted their audit reports on time, while 5 parties (NPF, IUML, ZNP, IPFT and KC-M) delayed their submission by several days, ranging from 27 days to 77 days.
Audit Reports of the remaining 11 Regional Parties for FY 2019-20 are unavailable on the website of the ECI at the time of preparation of this report. These include some major political parties like MNS, JKNPP, RLSP, BPF, JKNC, and PPA etc.
Hence, this report analyses the income and expenditure of 42 Regional Political Parties, whose audit reports are available on the ECI website, for FY 2019-20.

Total income declared by Regional Political Parties, FY 2019-20

The total income of the 42 Regional Parties for the FY 2019-20 was Rs 877.957 cr.
TRS reported having the highest income of Rs 130.46 cr, which forms 14.86% of the total income of all the parties analysed, followed by SHS with an income of Rs 111.403 cr or 12.69% and YSR-C whose income was Rs 92.739 cr or 10.56% of the total income of the 42 Regional parties analysed in this report.
The total income of top 5 parties amounted to Rs 516.482 cr, which comprised 58.83% of the total income of the political parties analysed, collectively.

Comparison of Income of Regional Parties, FY 2018-19 and FY 2019-20

Out of a total of 39 parties from 42 political parties whose data is available for both the years, 23 parties have shown an increase in their income from FY 2018-19 to FY 2019-20 while 16 parties have shown a decline in their income during this period.
Total income of the 39 parties decreased from Rs 1087.206 cr in FY 2018-19 to Rs 874.467 cr in FY 2019-20, a total decrease of 19.57% or Rs 212.739 cr.
AIADMK reported the highest increase in its income of Rs 61.506 cr followed by DMK and AAP which declared a total increase of Rs 38.557 cr and Rs 30.337 cr respectively, between FY 2018-19 and FY 2019-20.

Unspent Income of Regional Parties, FY 2019-20

There are 24 Regional parties who declared a part of their income as remaining unspent for the FY 2019-20 while 18 political parties spent more than the income collected during the year.
TRS has more than 83.76% of its total income remaining unspent while AIADMK and JJP have 67.82% and 64%, respectively, of their income remaining unspent for FY 2019-20.
TDP, BJD, DMK, SP, JDS, AJSU, JVM-P, INLD, PMK, MGP, GFP, SDF, MNF, AIFB, NPF, JKPDP, IPFT and MPC are the 18 Regional parties that declared spending more than their income. BJD has declared spending the highest amount of Rs 95.78 cr or 106.01% more than its income.

Total expenditure incurred by Regional Parties, FY 2019-20

The total declared expenditure of the 42 Regional parties for the FY 2019-20 was Rs 742.535 cr.
Total expenditure incurred by the top 3 parties is Rs 393.35 cr or 52.97% of the total expenditure as reported by the 42 political parties.
Top 5 parties that have incurred highest expenditure are BJD which had spent Rs 186.13 cr or 25.07%, followed by TDP which spent Rs 108.84 cr or 14.66%, SHS which spent Rs 98.379 cr or 13.25%, DMK which spent Rs 71.038 cr or 9.57% and SP which spent Rs 55.692 cr or 7.50% of the total expenditure.

All sources of Income declared by Regional Political parties, FY 2019-20

42 Regional Parties collected Rs 676.326 cr or 77.03% of their total income from voluntary contributions (includes Donations & Contributions and Electoral Bonds) for FY 2019-20.
Under voluntary contributions, political parties collected 50.97% or Rs 447.498 cr of their income from Donations through Electoral Bonds while other Donations & Contributions amounted to Rs 228.828 cr or 26.06% for FY 2019-20.
Only 14 of the 42 Regional Parties that were analysed declared donations through Electoral Bonds amounting to Rs 447.498 cr.
12.96% or Rs 113.761 cr of the total income was generated through Interest Income & FDRs by the 42 Regional Parties during FY 2019-20.

Observations of ADR

Audit reports of 5 parties (NPF, IUML, ZNP, IPFT and KC-M) were available on the ECI website after a delay of 27 days to 77 days from the extended deadline.
The income tax returns/audit reports of 11 Regional Parties are not available on the ECI website at the time of preparation of this report even after 103 days since the due date for submission.
Given the anonymity provided to donors by the scheme, it is seen that Electoral Bonds have emerged as the most popular mode of donations to Regional Political parties for FY 2019-20. More than 50.97% of the total income (Rs 447.498 cr) of the 42 Regional political parties analysed for FY 2019-20 is received from Donations through Electoral Bonds.
The most common and popular items of expenditure for regional parties for FY 2019-20 are election expenses/general propaganda and administrative/general expenses.
Janata Dal Secular (JDS) has declared membership fees and other fees under the Grants/donations/Contributions for the FY 2019-20.
The IUML party has declared the income and expenditure details under the heading of FY 2018-19 in its audit report for FY 2019-20. This shows the lackadaisical approach to disclosures/reporting both on the part of the political party and the Election Commission, which uploaded the file without rectification or seeking any clarification from the party.
For the FY 2019-20, more than 62% of the total income of seven National Parties came from Donations through Electoral Bonds (Rs 2993.826 cr), wherein identity of the donor is not disclosed to the public. Of the Regional parties that have submitted their audit reports, 14 Regional Parties (TRS, TDP, YSR-C, BJD, DMK, SHS, AAP, JDU, SP, JDS, SAD, AIADMK, RJD & JMM) have declared receiving donations through Electoral Bonds worth Rs 447.498 cr, which is 50.97%.
As per the data shared by SBI in response to ADR’s RTI application, Electoral Bonds worth Rs 3429.5586 cr were redeemed by parties in FY 2019-20. Of this, 87.29% was received by four National Parties – BJP, INC, AITC & NCP. The total amount of Electoral Bonds declared by National and Regional parties for FY 2019-20 so far is Rs 3441.324 cr. The difference in the amount declared by political parties and data on Electoral Bonds redeemed received from SBI could be due to the manner in which parties report in their audit report. For example: AAP declared donations from electoral bonds under the head “Others (Electoral Bonds/Electoral Trust)”. It may also be noted that audit reports of many other Regional parties are not yet available in the public domain. Once this data is available and subsequently if these parties declare receiving donations via Electoral Bonds, the total share of donations received from Electoral Bonds may increase further.
The most common and popular source of income for the National and Regional Political parties for FY 2019-20 are Donations through Electoral Bonds. Electoral Bonds have emerged as the most popular channel of donations to parties in the last two years. It is to be noted that JMM party has declared the name of the donor who donated Rs 1 crore through Electoral Bond in its contribution report for FY 2019-20, however, this income through electoral bonds has not been declared by the party in its audit report, FY 2019-20. This raises the question as to whether political parties are aware of the donor’s identity who made contributions via electoral bonds, as can be seen in this case.
During FY 2019-20 out of the 42 Regional Parties, JDS, SAD, JVM-P & LJP declared receiving a total income of Rs 14.884 cr from Sale of Coupons.