Date: 18^th Aug,’15

57% of total income of 5 National Parties during FY 2013-14 was from sale of coupons; Donations formed 22% of the income of the parties; BJP is yet to submit its report to the ECI

The Election Commission of India (ECI), in its letter dated 19^th November,’14 issued to the President/General Secretary of all political parties, stated that it was mandatory for the parties to submit details of their audited report to the Commission. This report analyses the total income and expenditure incurred by the National Parties during FY 2013-14, as declared by the parties in their IT Returns submitted to the ECI.

For the complete report in Hindi, kindly refer to the attachment.

Executive Summary

·         The due date for submission of annual audited accounts for the parties was 30^th Nov,’14.

·    Out of the six National Parties, BSP, CPI, CPM and NCP submitted their audited report while INC submitted its report under protest stating that unless necessary amendments were made in the RP Act, 1951, the ECI did not have the power to demand such reports from the parties.

·         BJP, in its letter dated 9^th July,’15, had requested for 4 weeks’ time but is yet to file the required reports.

Total Income of National Parties, FY 2013-2014

·         The five National Parties, whose IT Returns are available in the public domain, have declared a total income of Rs 844.71 crores, collected from all over India.

·         INC has shown the highest income amongst the 5 National Parties with a total income of Rs 598.06 crores during FY 2013-14. This formed 70.8% of the total income of the 5 National Parties, together during FY 2013-14.

·         CPM declared the second highest income of Rs 121.87 crores which forms 14.43% of the total income of the National Parties.

Declaration of sale of coupons and donations by National parties: FY-2013-2014

·         Collection from sale of coupons was one of the major sources of income where INC declared collection ofRs 477.316 crores while NCP declared collection of Rs 8.32 crores from the sale of such coupons.

·         A total of Rs 485.64 crores was collected by INC and NCP, together, via sale of coupons which contributed to 57.49% of the total income of the five national parties.

Share of donations above Rs 20,000 in total donations

·         A comparison of total donations declared by the parties in their IT returns (both above and below Rs 20,000) and that declared in the donations report shows that only 41% of the total donations of the parties came from voluntary contributions above Rs 20,000.

·        A total of Rs 111.29 crores (59%) of the total donations to National Parties was collected during FY 2013-14 from donors whose details are not available in the public domain.

Unknown sources of income of National parties for FY- 2013-2014

·         The unknown sources are income declared in the IT returns but without giving source of income for donations below Rs.20,000. Such unknown sources include ‘sale of coupons’, ‘Purse money’, ‘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.

·         Total income of political parties from unknown sources (income specified in the IT Returns whose sources are unknown), for the FY 2013-14 is Rs 673.08 crores, which is 79.68% of the total income of the parties.

Recommendations of ADR

·   While the ECI had issued guidelines to the political parties in order to promote transparency in the parties’ functioning and to aid the Commission to conduct free and fair elections, INC submitting its details under protestdisplays a lack of enthusiasm from the party in promoting and practicing the desired quality of transparency and accountability in its functioning. Those parties playing a decisive role at the national political arena should lead by example rather than curtailing any attempt at transparency.

·   Full details of all donors should be made available for public scrutiny under the RTI. 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 80% of the source of funds to be unknown, but at present it is so in India.

·   Those parties not following the ICAI guidelines for auditing of reports should be scrutinized by the IT department.

·   The National and regional political parties must provide all information on their finances under the Right to Information Act. This will only strengthen political parties, elections and democracy.

For details on the top sources of income of the National Parties, their top items of expenditure during the FY 2013-14 and the need for a strict mechanism for reporting financial statements of political parties, please refer to the attached report.

Regards,