Analysis of Sources of Funding of Regional Political Parties of India, FY 2021-22
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 name of individuals or
organizations giving less than Rs. 20,000. As a result, a substantial amount of funds cannot be traced and are from ‘unknown’
sources. While the National Political Parties were brought under the RTI
Act by the CIC ruling in June 2013, parties 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 the reports in both English and Hindi on our website, please visit: https://adrindia.org/content/analysis-sources-funding-regional-parties-india-fy-2021-22
Income of Political Parties from Known, Other
Known and Unknown Sources
- For this report, known sources
have been defined as donations above and below Rs 20,000, whose donor
details are available through contribution reports as submitted by regional
parties to the ECI.
- The unknown sources
are income declared in the Annual Audit reports but without giving source of income for donations below Rs. 20,000.
Such unknown sources include ‘Donations via Electoral Bonds’, ‘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 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.
- Association for Democratic
Reforms (ADR), in its previous report dated 26th August, 2022, analysed 27 Regional parties which filed both their Annual Audit and
Contribution reports. For FY 2020-21, total income of Regional parties amounted
to Rs 530.703 cr, of which Rs 263.928 cr
or 49.73% came from unknown sources.
- For this analysis, 54 Regional (recognized) parties were
initially considered, but out of them only 28
have filed both their Annual Audit and Contribution reports (refer Annexure
– 1), remaining 14 had not submitted
one out of the two reports to be submitted (refer Annexure – 2). None of the
two reports of 12 Regional parties are
available on the ECI website at the time of preparation of this report.
- The Annual Audit and
Contribution reports of AAP is available on the website, but party’s
donation declarations show discrepancies between data in the both reports for FY
2021-22. Therefore, this party has not been analyzed in this report.
- Total income of 27 Regional political parties in FY 2021-22 (which have submitted both reports): Rs 1165.576 cr (refer Annexure – 3).
- Total income of political parties from known donors (details of donors as available from Contribution report submitted
by parties to Election Commission): Rs 145.42
cr, which is 12.476% of
the total income of the parties.
- Total income of political parties from other known sources (e.g. Membership fees, bank interest, sale of publications, party
levy etc.): Rs 132.605 cr, or 11.377% of total income.
- Total income of political parties from unknown sources (income specified in the audit reports whose sources are unknown): Rs 887.551 cr, which is 76.147% of the total income of the parties.
Income from Unknown Sources
- Rs 887.551 cr of the total income of Regional Parties came from unknown sources, 93.26% or Rs 827.76 cr of this came from Electoral
- Income from Sale of
coupons formed 4.32% (Rs
38.354 cr) and Voluntary
contributions (below Rs 20,000) formed 2.40% (Rs 21.293 cr) in income from unknown sources of 27
Regional parties. Refer to Annexure – 4.