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 Income Tax Returns 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 nor those who donated via Electoral Bonds. As a result, more than 67% of the 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, they are 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.

Observations of ADR
Between FY 2004-05 and 2018-19, the National Parties have collected Rs 11,234.12 cr from unknown sources (links to reports given in ‘Reference’). The ‘Schedules’ or ‘Annexures’ were unavailable for CPM for FY 2017-18. Schedules contain specific details of income from various sources, without which ADR was unable to analyze the sources of funding for the CPM for the said year.

During FY 2018-19, BJP declared Rs 1612.04 cr as unknown source of income which is 64% of the total income of National Parties from unknown sources (Rs. 2512.98 cr). This income of BJP forms more than 1.5 times the total sources of income from unknown sources declared by the other 5 National Parties (Rs 900.94 cr).

INC declared Rs 728.88 cr as unknown source from income which is 29% of the total income from unknown sources from National Parties.

Out of Rs 2512.98 cr as income from unknown sources, the share of income from Electoral Bonds was Rs. 1960.68 cr or 78%.

Combined income of INC and NCP from sale of coupons between FY 2004-05 and 2018-19 stands at Rs 3902.63 cr.

According to the donations reports (including details of donations above Rs 20,000) of FY 2018-19, Rs 71.44 lakhs were given to National Parties by cash.

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