Press Release: For FY 2022-23, out of Rs 1832.8788 cr as income from unknown sources, the share of income from Electoral Bonds was Rs 1510.6199 cr or 82.42%.
ADR India
Analysis of Sources of Funding of National Political Parties of India, FY 2022-23
Political Parties play a key role in democracies as they contest elections, form governments, formulate policies and are responsible for providing governance and improving the lives of the common man. Political parties need access to money in order to reach out to the electorate, explain their goals/policies and receive inputs from people. But where do they collect their funds from?
An analysis of their audit reports and donations statements filed with the Election Commission of India (ECI) shows that the sources remain largely unknown. At present, political parties are not required to reveal the names of individuals or organizations giving less than Rs. 20,000. As a result, more than 59% of the funds cannot be traced and are from ‘unknown’ sources (including Electoral Bonds). While the National Political Parties were brought under the RTI Act by the CIC ruling in June 2013, they have still not complied with the decision. Full transparency is, unfortunately, not possible under the current laws, and it is only the RTI that can keep citizens informed.
To access both English and Hindi reports on our website, please visit: https://adrindia.org/content/analysis-sources-funding-national-parties-fy-2022-23
Observations of ADR
- Between FY 2004-05 and 2022-23, the National Parties collected Rs 19,083.08 cr from unknown sources (click
here
for access).
- During FY 2022-23, BJP declared Rs 1400.2398 cr as income from
unknown sources which is 76.396% of
the total income of National Parties from unknown sources (Rs 1832.8788 cr).
This income of BJP is Rs 967.6008
cr more than the aggregate of income from unknown sources declared by the other
5 National Parties (Rs 432.639 cr).
- INC declared Rs
315.114 cr as income from unknown sources which is 17.192% of the total
income of National Parties from unknown sources.
- Out of Rs 1832.8788 cr as income from unknown sources, the share of income
from Electoral Bonds was Rs 1510.6199 cr
or 82.42%.
- INC and CPI(M) have declared Rs 136.7986 cr combined income from the Sale of Coupons for FY 2022-23.
- For this report, known sources
have been defined as donations above Rs 20,000, whose donor details are
available through contributions reports as submitted by National parties to
the ECI.
- The unknown sources
are income declared in the annual audit report but without giving source of income for donations below Rs. 20,000.
Such unknown sources include ‘donations via Electoral Bonds (which are now prohibited)’,
‘sale of coupons’, ‘relief fund’, ‘miscellaneous income’, ‘voluntary
contributions’, ‘contribution from meetings/morchas’ etc. The details of donors
of such voluntary contributions are not available in the public domain.
- Other known sources of income include the sale
of moveable & immoveable assets, old newspapers, membership fees, delegate
fee, bank interest, sale of publications and levy whose details would be
available in the books of accounts maintained by political parties.
- For this analysis, 6
National parties were considered – BJP,
INC, CPI(M), BSP, AAP and NPEP.
However, BSP 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. BSP
received Rs 29.27 cr from other known sources of income which include bank
interest (Rs 15.0487 cr), membership fees (Rs 13.73 cr), gain on sale of
immovable property (Rs 28.49 lakhs) and interest on income tax refund for AY
2021-22 (Rs 20.65 lakhs).
- Total income of 6 National political parties in FY 2022-23: Rs 3076.882
cr.
- Total income of political parties from known donors (details of donors as available from contribution report submitted
by parties to Election Commission and analysed by ADR here): Rs 850.438 cr, which is 27.64% of the total income of the
parties.
- Total income of political parties from other known sources (e.g. sale of assets, membership fees, bank interest, sale of
publications, party levy etc.): Rs 393.5652
cr, or 12.79% of the total
income.
- Total income of political parties from unknown sources (income specified in the annual audit report whose sources are
unknown): Rs 1832.8788 cr, which is 59.57% of the total income of the parties.
- Out of Rs 1832.8788 cr as income from unknown sources, the share of income from Electoral Bonds: Rs 1510.6199 cr or 82.42%.
*Other known income includes: sale of moveable & immoveable assets, old newspapers, membership fees, delegate fee, bank interest, sale of publications and levy
**Details of income from unknown sources is given in Annexure – 1; Party-wise sources of income are given in Annexure – 2
Income from unknown sources
- Out of the total income of Rs
1832.8788 cr of 6 National
Parties from unknown sources, 82.42% or Rs 1510.6199 cr
came from Electoral Bonds.
- Income from the sale of coupons declared by INC and CPI(M) formed 7.46% (Rs 136.7986 cr) of income from unknown sources while Donations from Voluntary Contributions (below Rs 20,000) formed 10.00% (Rs 183.2811 cr) in income from unknown sources of the 6 National Parties.
Recommendations of ADR
- Since a very large percentage
of the income of political parties cannot be traced to the original donor, full
details of all donors should be made available for public scrutiny under the
RTI. Some countries where this is done include Bhutan, Nepal, Germany, France,
Italy, Brazil, Bulgaria, the US and Japan. In none of these countries, it is
possible for more than 59% of the
source of funds to be unknown, but at present it is so in India.
- Mode of payment of all
donations (above and below Rs 20,000), income from sale of coupons, membership
fees, etc. should be declared by the
parties in the ‘Schedules’ of their audit reports, submitted annually to the
Income Tax department and the ECI.
- The ECI has recommended that
tax exemption be awarded only to those political parties which contest and win
seats in Lok Sabha/ Assembly elections. The Commission has also recommended
that details of all donors who donate above Rs 2,000 be declared in the public
domain. ADR supports ECI for its strong stand to enforce reforms in the funding
of political parties and hopes that these reforms are proactively taken up by
the Government for implementation.
- Scrutiny of financial documents
submitted by the political parties should be conducted annually by a body
approved by CAG and ECI so as to enhance transparency and accountability of
political parties with respect to their funding.
- The National and Regional political parties must provide all information under the Right to Information Act. This will only strengthen political parties, elections and democracy. However, RTI or not, political parties should voluntarily account for every rupee that they get or spend.
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