Press Release: The total donations received by the 31 recognised political parties analysed during the six-year period was Rs 16,437.635 cr. Donations worth Rs 9188.35991 cr were received from Electoral Bonds (55.90%), Rs 4614.53 cr were received from the corporate sector (28.07%) and Rs 2634.74509 cr were received from other sources (16.03%)

[ADR India]

Press Release 

Date: July 11, 2023

Analysis of Donations to Registered Recognised Political Parties,

FY 2016-17 to FY 2021-22

Trend Analysis & Comparative Analysis

Electoral Bonds | Direct Corporate Donations | Other Donations

In this brief report, we analyse the donations (above Rs 20,000) received by the 31 recognised political parties (7 National and 24 Regional) in the time period between FY 2016-17 and FY 2021-22. This six-year time period is crucial, as during this time the Electoral Bond Scheme 2018 was introduced for the purpose of electoral funding as well as the Finance Act 2017 removed the previous limit of 7.5% of the company’s average three-year net profit for political donations. A company is no longer required to name the political parties to which such contributions are made. The donor’s name is also not revealed under the Electoral Bond Scheme. The Government amended the Income Tax Act, the Companies Act, the Reserve Bank of India Act and also the Foreign Contribution (Regulation) Act 2010 (with retrospective effect) to allow foreign companies registered in India to contribute to political parties.

It is also important to note that during this period, General Elections 2019 took place and a total of 45 state assembly elections were held.

 

For ease of understanding, the total donations analysed in this report have been classified into (1) donations from anonymous Electoral Bonds (EBs), (2) direct donations from corporate houses (including electoral trusts) and (3) other donations (including donations below Rs 20,000) from sources such as Donations from MPs/MLAs, contributions from meetings, contributions from morchas, collection by party units, Aajiwan Sahayog Nidhi, members’ donations, membership fee, and party fund/election fund, as specified by political parties in their statements. 

For the detailed report, please see the attached file in English. To access the report on the website, please see: https://adrindia.org/content/analysis-donations-registered-recognised-political-parties-fy-2016-17-fy-2021-22

Summary and Highlights

1. The total donations received by the 31 recognised political parties analysed during the six-year period was Rs 16,437.635 cr. Donations worth Rs 9188.35991 cr were received from Electoral Bonds (55.90%), Rs 4614.53 cr were received from the corporate sector (28.07%) and Rs 2634.74509 cr were received from other sources (16.03%).
   
   
2. The total donations declared by the 7 National Parties and 24 Regional parties (from Electoral Bonds, corporate sector and other donations) between FY 2016-17 and 2021-22 were Rs 13190.685 cr (80.247%) and Rs 3246.95 cr (19.753%), respectively.
   
   
3. For National parties, there was a 743% increase in donations from electoral bonds between FY 2017-18 and FY 2021-22 while for corporate donations this increase is only 48%.
   
   
4. Electoral Bonds are the most preferred mode of donations for making contributions to National and Regional political parties amounting to Rs 9188.35991 cr, followed by direct corporate donations worth Rs 4614.53 cr.
   
   
5. The total donations declared by BJP is more than three times the total donations declared by all other National parties.
   
   
6. During the six-year period, more than 52% of BJP’s total donations came from Electoral Bonds worth Rs 5271.9751 cr, while all other National parties amassed Rs 1783.9331 cr. INC declared the second highest donations from bonds of Rs 952.2955 cr (61.54% of its total donations) followed by AITC which declared Rs 767.8876 cr (93.27%).
   
   
7. More than 89.81% of BJD’s total donations came from Electoral Bonds worth Rs 622 cr. DMK declared the second highest donations from bonds of Rs 431.50 cr (90.703% of its total donations) followed by TRS which declared Rs 383.6529 cr (80.45%) and YSR-C which declared Rs 330.44 cr (72.43%).
   
   
8. Between FY 2016-17 and 2021-22, the total direct corporate donations declared by National parties was Rs 3,894.838 cr while Regional parties declared Rs 719.692 cr.
   
   
9. The direct corporate donations declared by 7 National parties are more than five times the corporate donations declared by 31 Regional Parties during the six-year period.
   
   
10. The corporate donations declared by BJP are at least three-four times more than the total corporate donations of all other National Parties. In FY 2017-18, it was more than eighteen times that of all other National parties.
    
    
11. For the six-year period, BSP has consistently declared no corporate donations while CPI has declared receiving zero corporate donations from FY 2018-19 to FY 2021-22.
    
    
12. In the six-year period, direct corporate donations declared by Regional parties increased by 152.029%.
    
    
13. Between FY 2016-17 and 2021-22, Prudent Electoral Trust contributed the highest amount of Rs 1604.43 cr followed by Progressive Electoral Trust (Rs 549.9750 cr) and B.G. Shirke Construction Technology Pvt Ltd. (Rs 102.155 cr).
    
    
14. The maximum corporate donations declared by the 31 recognised political parties came from Delhi amounting to Rs 1843.697 cr followed by Maharashtra (Rs 1418.130 cr) and Gujarat (Rs 213.540 cr). 
    
    

Overview

1. The total donations received by the 31 political parties analysed (including 7 National and 24 Regional) during the six-year period was Rs 16,437.635 cr. Out of this, donations worth Rs 9188.35991 cr were received from Electoral Bonds (55.90%), Rs 4614.53 cr were received from corporate sector (28.07%) and Rs 2634.74509 cr were received from other sources (16.03%).
   
   
2. Highest donations were received in the FY 2019-20 (year of General Elections) worth Rs 4863.502 cr, followed by Rs 4041.487 cr in FY 2018-19 and Rs 3826.56 cr in FY 2021-22.
   
   
3. Highest donations from the corporate sector were received in the FY 2018-19 (assembly elections were held in nine states) worth Rs 1113.767 cr followed by Rs 1100.736 cr in FY 2019-20, the year of the General Elections and eight state assembly elections.
   
   
4. Highest donations from Electoral Bonds were received in FY 2019-20 (year of General Elections) worth Rs 3438.8237 cr followed by Rs 2664.2725 cr in FY 2021-22 (eleven state assembly elections were held).

1. The total donations declared by the 7 National Parties from Electoral Bonds, corporate sector and other donations between FY 2016-17 and 2021-22 were Rs 13190.685 cr.
   
   
2. Since the inception of the Electoral Bond Scheme in the FY 2017-18, in the case of National parties, the percentage increase in the donations from electoral bonds between FY 2017-18 and 2021-22 is 743% while for corporate donations this increase is only 48%.
   
   
3. As can be seen in the graph below, the donations to National parties from Electoral Bonds and the corporate sector were highest in the FY 2019-20. These seven political parties received Rs 4185.112 cr worth total donations from all three categories of donations in FY 2019-20, followed by Rs 3129.757 cr in FY 2018-19.

1. The total donations declared by the 24 Regional Parties from Electoral Bonds, the corporate sector and other sources between FY 2016-17 and 2021-22 were Rs 3246.95 cr.
   
   
2. Since the inception of the Electoral Bond Scheme in FY 2017-18, in the case of Regional parties, the percentage increase in the donations from electoral bonds between FY 2017-18 and 2021-22 is 14026.4% while for corporate donations this increase is 389.55%.
   
   
3. As can be seen in the graph below, the donations to Regional Parties from Electoral Bonds and the corporate sector were highest in FY 2021-22 and FY 2018-19, respectively. These 24 regional political parties received Rs 1034.78 cr worth of total donations from all sources in FY 2021-22, followed by Rs 911.73 cr in FY 2018-19.

Note: RJD had received Rs 2.50 cr worth of donations through Electoral Bonds during FY 2019-20 and MGP received Rs 55.00 lakhs through Electoral Bonds during FY 2021-22, 

however, this data was not added to both parties' data in the above graph due to the unavailability of their statements on the ECI Website

Recommendations of ADR

1. The Supreme Court gave a judgment on 13-09-2013, declaring that no part of a candidate’s affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs 20,000, should be blank.
   
   
2. All donors who have donated a minimum of Rs 20,000 as a single or multiple donations should provide their PAN details.
   
   
3. Donations below Rs 20,000 should also be reported.
   
   
4. Date on which the donation was made should be recorded by the party and submitted in Form 24A.
   
   
5. Any party which does not submit its donation statement to the ECI on or before 31st October should be penalized and its income should not be tax-exempted.
   
   
6. Corporates should make details of their political contributions available in the public domain through their websites (in annual reports or on a dedicated page) for increasing transparency in political financing.
   
   
7. Annual scrutiny of donations reports of National, Regional and unrecognized parties should be initiated by a dedicated department of the CBDT, to discourage donations from shell companies or illegal entities.
   
   
8. Incomplete contributions reports having missing or incorrect PAN/mode of payment details must be returned to the parties by the ECI, to deter them from providing incomplete information. Deregistration and de-recognition of such political parties are also proposed.
   
   
9. It is suggested that the ECI publicize on its website details of the action taken (if any) against political parties that fail to provide required details (such as name, address, PAN and mode of payment) of individuals, companies or entities making donations in cash.
   
   
10. The National and Regional political parties must provide all information of their finances under the Right to Information Act. This will go a long way in strengthening political parties, elections and democracy.
    
    
11. 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 is it possible for nearly 50% of the source of funds to be unknown, but at present it is so in India.
    
    
12. The Electoral Bond Scheme, 2018 should be entirely scrapped. In the case of continuance of the Scheme, the principle of anonymity of the bond donor enshrined in the Electoral Bond Scheme, 2018 must be done away with. All political parties which receive donations through electoral bonds should declare in their contributions reports the total amount of such donations received in the given financial year, along with the detailed particulars of the donors as against each bond; the amount of each such bond and the full particulars of the credit received against each bond. The procedures and reporting framework for the above must be standardized to ensure that a true picture of the financial position of the political parties is revealed to the general public.
    
    
13. As per the recommendation of 255th Law Commission report, “Express penalties, apart from losing tax benefits, should be imposed on political parties … for the non-compliance with the disclosure provisions …. This should include a daily fine of Rs. 25,000 for each day of non-compliance, with the possibility of de-registration if the default continues beyond 90 days. Further, ECI may levy a fine of up to Rs. 50 lakhs if it finds any particulars in the party’s statements as having been falsified.
    
    
14. Political parties that remain inactive over a prolonged period, do not take part in any election and continue to receive donations through electoral bonds should be de-listed by the ECI from time to time to ensure that such parties are unable to benefit from the Electoral Bond Scheme, 2018 and unlimited anonymous corporate donations.
    
    
15. There should be a CAG audit of the political parties’ income, expenditure and contribution statements.

16. Similar to Section 276CC of the IT Act which penalizes individuals who fail to submit their IT returns, similar legal provisions should be applicable to political parties too.

Contact Details

Media and Journalist Helpline +91 80103 94248 Email: a...@adrindia.org

Maj. Gen Anil Verma (Retd.) Head Association for Democratic Reforms & National Election Watch +91 11 4165 4200 +91 88264 79910 anil...@adrindia.org

Prof Jagdeep Chhokar IIM Ahmedabad (Retd.) Founder Member, Association for Democratic Reforms & National Election Watch jchh...@gmail.com

Prof Trilochan Sastry IIM Bangalore Founder Member, Association for Democratic Reforms & National Election Watch +91 94483 53285 tsa...@gmail.com

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