A large number of political parties are spending more than the total money collected during elections, says a report released by the Association of Democratic Reforms (ADR) on Monday.

The ADR analysed funds collected and expenditure incurred by political parties — money spent by candidates is not included in the analysis — in the 71 Assembly elections and three Lok Sabha polls between January 2004 and December 2015.

‘No transparency’

Twenty of the 49 regional parties that contested the Lok Sabha elections and 19 of the 37 regional parties that fought it out in the Assembly polls declared that they spent more money than the funds collected during the election period. “India is the least transparent country when it comes to political party finances,” said Prof. Trilochan Sastry, founder-member of the ADR’s National Election Watch.

The total amount received by political parties during the three general elections was Rs. 2,355 crore (44% of it in cash) while Rs. 3,368 crore was collected (63% in cash) during the Assembly polls.

But surprisingly, very little of the amount was spent in cash, which constituted just 10 per cent of the expenditure during Lok Sabha elections, and 12 per cent of the spending during Assembly polls. “Two [former] Chief Election Commissioners publicly admitted that around Rs. 10,000 crore are likely to be spent during elections in Uttar Pradesh and Tamil Nadu alone,” said Prof. Shastry. This is more than the entire amount spent by parties during the elections analysed. This, he said, reflected the scale of unaccounted for money being circulated in the election economy.

Loophole in guidelines

The political parties are taking advantage of loopholes in transparency guidelines issued by the Election Commission (EC) to ensure that they spend more than the amount of money they legally receive. While the poll panel’s norms state that parties should not spend more than Rs. 20,000 in cash, there is no provision in the expenditure format for parties to declare expenses exceeding or less than Rs. 20,000.

Also, as per guidelines, political parties are required to submit a statement of expenditure to the EC within 75 days of Assembly elections and 90 days of general polls. ADR’s analysis of Assembly elections between 2011 and 2015 shows that the JD(U)’s statements are unavailable for 15 State elections and the SP’s for 11 Assembly polls.

In the case of the NCP and the CPI, expenditure statements are not available for two Assembly elections. Unfortunately, there is a limit to what the EC can do, said Prof. Jagdeep Chhokar, founder-member of the National Election Watch. “There is no penalty on political parties if guidelines are not followed. A ruling by Supreme Court said that while the EC can register political parties, it cannot deregister them.”