Press Release: The annual audit reports of a total of only 96 or 4.17% of the total 2,301 registered unrecognised parties is available in the public domain for FY 2018-19

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Aug 31, 2020, 2:10:15 AM8/31/20

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Press Release

31st August, 2020

Analysis of status of submission of annual audit reports of Registered Unrecognised

Political Parties during FY 2017-18 & FY 2018-19

For the complete reports in English and Hindi, refer to the detailed reports attached herewith.

To access the reports on the website, please go to: https://adrindia.org/content/analysis-status-submission-annual-audit-reports-registered-unrecognised-political-parties

Executive Summary

According to the latest Gazette Notification issued by the Election Commission of India dated 15^th March, 2019, there are a total of 2,360 political parties registered with the Commission. 2,301 or 97.50% of registered political parties are Unrecognised Parties. Either newly registered parties or those which have not secured enough percentage of votes in Assembly or General Elections to become a state party or those which have never contested in elections since being registered are considered unrecognised parties.

The number of registered unrecognised political parties has increased two fold in the last 10 years. From 1112 parties in 2010, the number has spiked to 2,301 in 2019. It is important to note that the number of such parties increases disproportionately during the year of Parliamentary elections especially. Between 2018 and 2019, it increased by over 9.8% while between 2013 and 2014, it increased by 18%.

The Election Commission of India issued guidelines on “Transparency and Accountability in party funds and election expenditure – submission of reports by unrecognised political parties” which were applicable to all political parties w.e.f 1^st October, 2014. As per these guidelines, all unrecognised parties are required to submit their requisite reports in the office of the respective State CEOs.

On receipt of the reports from the state level unrecognised political parties, scanned copies of annual audited accounts, contribution reports and statements of election expenditure shall be uploaded on the websites of CEOs of the respective states, within 3 days of receipt of the same for viewing by the public.

In view of the above, this report by Association for Democratic Reforms (ADR) analyses the status of submission of annual audit reports of registered unrecognised parties between FY 2017-18 and FY 2018-19. The report looks at the number of parties that submitted their audit reports on time, those that delayed their submission as well as parties whose audit reports are not available in the public domain after the due date for the said time period.

Status of submission of audit reports by registered unrecognised parties, FY 2017-18 & 2018-19

This report analyses the status of submission of audit reports of 169 registered unrecognised parties whose audit details were available in the public domain for either FY 2017-18 or FY 2018-19 or both.
The last date of filing of annual audited reports/statements is 31^st October every year.
The annual audit reports of a total of only 96 or 4.17% of the total 2,301 registered unrecognised parties is available in the public domain for FY 2018-19, and for FY 2017-18, the reports are available for only 126 parties or 5.48% of the total registered unrecognised parties.

The audit reports of 73 registered unrecognised parties are not available in the public domain for FY 2018-19 even after 305 days from the due date. The reports of 43 parties are not available for FY 2017-18, even after lapse of 1 year and 10 months.

Total income and expenditure declared by unrecognised parties during FY 2017-18 and 2018-19

The registered unrecognised parties analysed in this report declared a total income of Rs 1694.40 lakhs during FY 2018-19 and Rs 1230.65 lakhs for FY 2017-18 while the total expenditure declared was Rs 1910.13 lakhs for FY 2018-19 and Rs 999.17 lakhs for FY 2017-18.
Of the 169 parties analysed in this report, more than 100 parties’ annual audit reports are unavailable in the public domain for either or the two financial years.

State-wise status of submission of audit reports during FY 2017-18 and FY 2018-19

Of the total of 2,301 registered unrecognised parties as of 15 March’19, 653 parties or 28.38% belong to Uttar Pradesh, followed by 291 parties or 12.65% from Delhi and 184 or 8% from Tamil Nadu.
The highest share of submission of audit reports of parties during FY 2017-18 and FY 2018-19 was 12.88%. Out of 132 parties from Bihar, the audit reports of only 10 and 17 parties, respectively are available on the CEO website for FY 2018-19 and 2017-18.

Observations of ADR

Only 1.52% of registered unrecognized parties filed their audit reports to the ECI for both FY 2017-18 and FY 2018-19. Among the parties considered, only 35 submitted their reports for all two years.
The list of reports/statements filed by the registered unrecognised parties are not available on the CEO websites of Telangana & Andhra Pradesh for the last three years, and on the Tripura & Himachal Pradesh CEO websites for the last four years at the time of preparation of this report.
The website and the required webpage to access audit reports of unrecognised parties is not opening in case of Karnataka CEO website and Assam CEO website, respectively.
The audit reports of any unrecognised parties are not available on the website of the CEO Odisha even though 35 unrecognised parties are registered in the state.
The links to political parties’ audit reports and donations reports are not provided on the CEO websites of 16 states at the time of preparation of this report. These include states like Kerala, Uttarakhand, Punjab, Jammu & Kashmir, Arunachal Pradesh, Manipur, Mizoram etc.
Out of a total of 2,301 registered unrecognised parties, approx. 30 parties won seats in the current state assemblies and Lok Sabha. Of these 30 parties, only 3 parties’ audited statements are available for FY 2017-18 and 2018-19.
It is also observed that in case of audit reports of several parties, the official stamp could not be seen or the date of the letter accompanying the report submitted by the parties and hence, the date of submission could not be precisely gauged. In such cases, the date undersigned by the party auditor has been referred to for assessing the status of submission. In other cases, where the official stamp is not available but the accompanying letter date could be seen, the letter date has been referred to.

Recommendations of ADR

In 1999, the ECI had issued notices to more than 200 political parties which were registered till 1995 but failed to contest in any elections. Notices to those parties which were returned undelivered or parties which failed to respond to these notices were deleted only from the list of registered parties, which added up to 150. Similarly, 255 parties were de-listed in 2016 from the list of registered unrecognised parties as they were no longer in existence or functioning.
This exercise should continue so as to weed out all political parties which do not contest in any election for more than 5 years and also as a means to strengthen the registration process.
The website of the state CEOs should be regularly updated to provide details of status of submission of audit reports and contribution reports by unrecognised parties. As mentioned in the transparency guidelines, the list of reports/statements filed by these parties shall be compiled and uploaded on the CEO’s website within 24 hours of the due date. This list shall be periodically updated by the CEO office, within 3 days of receipt of statement/report from any political party. None of the State CEO websites other than Chhattisgarh, Delhi and Gujarat provide details of status of submission of audit reports. Other state CEO websites must follow the example of these states and display the list of parties and status of submission of their audit reports as mandated by the guidelines.
Regulation of registration of political parties is crucial to avoid money laundering, corrupt electoral practices and abuse of money power. Thus, the ECI should impose strict norms for the registration of an association of persons as a political party apart from taking the stringent step of de-listing those parties which fail to adhere to the rules.
IT scrutiny of unrecognised parties should be taken up, especially of those which do not contest in elections but declare voluntary contributions.