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11.04.2018
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  • The BJP declared an income of ₹10.34 billion while the Congress made ₹2.25 billion.
  • Around 96% of the BJP’s income came from voluntary donations.
  • The BJP declared a total expenditure of ₹7.1 billion in 2016-2017, nearly 86% of which was spent on elections and general propaganda, while the Congress spent ₹3.2 billion.

It definitely pays to be in power. The Bharatiya Janata Party (BJP) declared a gross income of ₹10.34 billion in fiscal 2017, according to a report by the Association of Democratic Reforms, an NGO. This marked a 81% jump in the ruling party’s income from the previous year, owing to a surge in individual donations. 

As is customary in countries beset by crony capitalism, the ruling party always gets the most donations. 

The BJP outearned every other national political party in India by a mile. The Indian National Congress, the country’s main Opposition party, reported the second-highest income of ₹2.25 billion, a 14% drop from the previous year. The only other national parties to make more than ₹1 billion were the Mayawati-led Bahujan Samaj Party (BSP), which reported a 250% jump in income to ₹1.73 billion, and the Communist Party of India (Marxist), whose income fell to ₹1 billion from ₹1.07 billion. 

The findings are based on the audited accounts submitted by the parties to the Election Commission of India. The deadline for submitting these tax returns was October 30th last year. The country’s two main parties took their time with their accounts. The BJP sent in its audited report in February 2018, while the Congress submitted it last month. 

The BJP, as usual, was tight-lipped about the actual sources of its revenue. It attributed a staggering 96.4% of its income in 2016-2017 to voluntary donations. The remaining amount came from interests on bank deposits and fees and subscriptions. Meanwhile, the Congress sourced 22.5% of its income from donations and grants while 51% came from the sale of coupons, which involves the issuance of receipts to donors in lieu of a cash contribution, and 19.5% came from the interest accrued on fixed deposits. 

As per India’s laws, the details of donations less than ₹20,000 did not have to be disclosed - a rule that the BJP and other political parties could have easily exploited by splitting large donations into amounts less than this limit. However, in last year’s Union Budget, Arun Jaitley capped the limit of individual donations at ₹2,000 for the “sake of transparency”. It will be interesting to see what effect this has on these parties’ accounts for 2017-18. In all likelihood, more accounting work will be required. 

And how did the BJP spend its income in fiscal 2017? It focused its resources on staying in power and winning elections, a notable victory coming in the Uttar Pradesh state elections in March 2017. 

The BJP declared a total expenditure of ₹7.1 billion in 2016-2017, nearly 86% of which was spent on elections and general propaganda. The Congress struggled to match its rival’s spending power. The Opposition party ending up spending a lot more than it earned, recording a total expenditure of ₹3.2 billion, 46% of which was used to finance its election campaigns. It also declared ₹1.16 billion worth of administrative and general expenses, well above the BJP’s combined expenditure of ₹902 million on administrative and employee costs. 

Clearly, the BJP has a sizeable chest of cash at its disposal ahead of the 2019 general elections. However, the Congress is not to be counted out. It has amassed its own wealth over 10 stints as the ruling administration since India’s independence, and will spare no expense as it takes on the BJP and allies with other opposition parties next year. 

More pressing, however, is the murkiness regarding the finances of these parties. An overwhelming majority of their funds come from unspecified sources. Worse still, India’s parties have shown that they have no qualms in being swayed by foreign interests as long as there’s money on the table, with the BJP and Congress going so far as to okay a bill that lets them off the hook for all the illegal foreign donations that they have received since 1976. 

The Association of Democratic Reforms recommends that all details of political donations should be made available to public under the Right-to-Information Act, as is the case in a host of countries such as the US, Germany, France, Italy, Japan Bhutan and Nepal. It also says that much like a Supreme Court ruling in 2013 that says an election candidate’s application should be completely filled, the Election Commission of India should enforce a rule that requires parties to disclose the source of all their donations above ₹20,000 in their tax forms. 

Meanwhile, the Election Commission is said to be assessing Arun Jaitley’s electoral bonds proposal which is targeted at curbing cash contributions, but the scheme will only muddy the waters further by preserving the anonymity of donors. The bonds, which can be purchased from the State Bank of India, do not bear the name of the buyer, and as a result, the political party which receives the funds will not be able to identify the source but both of them will have to account for it. The idea is for banks to act as intermediaries of the political donation process. 

The source of any political party’s power should be the support it receives from the common electorate, not the funds it receives from wealthy donors and businesses, both domestic and foreign. There needs to be greater transparency in political funding in India, especially with regards to corporate donations. Anything otherwise is an affront to the principles of democracy

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