Source: 
Money life
http://www.moneylife.in/article/about-75-funding-of-six-major-political-parties-is-from-unknown-sources/34466.html
Date: 
14.09.2013
City: 
New Delhi

An analysis by Association of Democratic Reforms -ADR of Income Taxreturns and statements filed by Congress, BJP, CPI-M, CPI, NCP and BSP with the Election Commission shows that between 2004 to 12, these political parties received funding worth Rs3,675 crore through unknown sources

Where do the political parties get their funds from? An analysis of Income Tax (I-T) returns and statements filed by six major political parties, All India Congress Committee (INC or Congress), Bharatiya Janata Party (BJP), Communist Party of India-Marxist (CPI-M), Communist Party of India (CPI), Nationalist Congress Party (NCP) and Bahujan Samaj Party (BSP) with the Election Commission (EC) shows that their funding sources remain largely unknown. The analysis done by Association of Democratic Reforms (ADR) shows that sources for over 75% of the funding received by political parties cannot be traced. This becomes very relevant in the light of recent events when the political parties were brought under the ambit of Right to Information (RTI) Act by a ruling of Central Information Commission (CIC). Unfortunately, full transparency is not possible under the current laws, and it is only the RTI that can keep citizens informed.

 

Political parties are required to submit a statement of election expenditure to the EC containing details like total amount received by them as funds in the form of cash, cheques and demand drafts (DDs) among other things. Political parties submit these statements providing information of funds collected from the date of announcement of elections till the date of completion of elections, which could be between three weeks and three months based on the notification issued by the EC.

 

Here are the highlights of funding received by six political parties between FY2005 to FY2012

 

  • • Total income of political parties between FY 2004-05 and 2011-12:Rs4,895.96 crore
  • • Total income of political parties as donations from Electoral trusts: Rs105.86 crore, which is 2.16% of the total income of the parties
  • • Total income of political parties from known donors (details of donors as available from contribution report submitted by parties to Election Commission): Rs435.85 crore, which is 8.90% of the total income of the parties
  • • Total income of political parties from other known sources (e.g., sale of assets, membership fees, bank interest, sale of publications, party levy etc.): Rs785.60 crore, or 16.05% of total income
  • • Total income of political parties from unknown sources (income specified in the IT Returns whose sources are unknown): Rs3,674.50 crore, which is 75.05% of the total income of the parties


    #Assuming each donor gives Rs20,000, it shows the minimum number of donors required to give the total amount of unknown donations

 

Description of Funds received by political parties at Party headquarters during elections by these six parties 

• 90.38% of the total funds received by INC at the party headquarters between 2008 and 2012 was by cash (Rs251.96 crore) while only 9.62% of the funds was by cheque (Rs26.81 crore)

• 83.78% of NCP's total funds were by cash (Rs14.93 crore) and a meagre 16.22% by cheque/DD (Rs2.89 crore)
 

From the analysis, it is quite evident that a very large percent of the income of political parties (75.1% for national parties) cannot be traced to the original donor.
 

ADR said, “Full details of all donors should be made available for public scrutiny under the RTI Act. Some countries where this is done include Bhutan, Nepal, Germany, France, Italy, Brazil, Bulgaria, the US and Japan. In none of these countries is it possible for 75% of the source of funds to be unknown, but at present it is so in India.”
 

In order to strengthen political parties, elections and democracy in India, it is imperative that all political parties should provide information under the RTI.

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