Ever Wondered Where Our Political Parties Get Their Funding From? Here’s All You Need to Know

In the world’s largest democracy, it should not be a surprise that political party funding is a much analysed topic. While talks of electoral financing reforms and innovations like political bonds are still evolving, most of the declared funds raised by the parties come via direct donations to parties.

All political parties are required to submit details of donors who have made donations above Rs. 20,000 in a financial year (between 1st April and 31st March) to the Election Commission of India, every year.

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While submitting these details, parties are obligated to also provide details like the name, address, PAN, mode of payment and amount contributed by each donor who has made a donation above Rs. 20,000 in their submission.

The Association for Democratic Reforms (ADR) was established in 1999 by a group of professors from the Indian Institute of Management, Ahmedabad.

One of the focus areas that ADR is working towards is to bring about greater accountability of Political Parties.

Here are some of the key takeaways from the ADR report dated Aug 16, 2017 – covering a period from 2012 to 2016.

1. With the maximum donations, totally up to Rs. 705.81 crore from 2987 corporate donors, Bharatiya Janta Party (BJP) emerged the clear leader with the highest donations received. This was followed by the Indian National Congress, which received a total contribution of Rs. 198.16 crore from 167 corporate donors.

2. The Communist Party of India (CPI) and Communist Party of India (Marxist) (CPI-M) have the lowest share of corporate donations at 4 % and 17 % respectively as per the report.

3. As per this report, the real-estate sector has emerged as the biggest donor to the national parties during FY 2012-13, contributing a total amount of Rs.16.95 crore to the parties.

4. One of the pre-requisites for making donations is to mention your PAN and address. Despite this, a total of 1933 donations through which national parties received Rs. 384.04 crore, do not have PAN details in the contribution form.

5. 99% of donations without PAN and address details, totally some Rs. 159.59 crore, have been made to the BJP.

Given that the parties are not covered under the right to information, their disclosures to the election commission and income-tax returns offer a glimpse into their finances.

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The ADR in an attempt to make the poll funding as transparent as possible has made some suggestions. A few important ones are listed below:

1. In an order of the Apex Court in 2013, it was made mandatory for candidates to fill out all parts of the affidavit without leaving any blanks. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs. 20,000 should be blank.

2. All those who have contributed Rs. 20,000 or more MUST quote their PAN details.

3. The date on which the donations were made must be recorded.

4. Corporates should make details of their political contributions available in public domain through their websites (in annual reports or on a dedicated page) for increasing transparency in political financing.

5. Any party, which does not submit its donation statement to the Election Commission of India on or before 31st Oct should be heavily penalised and its income should not be tax-exempted.

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