Story in numbers: Mystery of unknown sources of political party funding

An analysis of the income-tax return (ITR) and donation statements filed with the Election Commission of India (ECI) shows that the sources of funding of national political parties remain largely unknown.

At present, political parties are neither required to reveal the names of individuals/organisations giving less than Rs 20,000 nor those who donated via electoral bonds. As a result, more than 36 per cent of the funds cannot be traced and are from ‘unknown’ sources.

While national and regional political parties were brought under the Right To Information (RTI) Act by a ruling in June 2013, they have 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.

Known sources have been defined as donations above Rs 20,000, whose donor details are available through contribution reports as submitted by national parties to the ECI.

Unknown sources are income declared in the ITR but without giving the source of income for donations below Rs 20,000. Such unknown sources include ‘donations via electoral bonds’, ‘sale of coupons’, ‘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.

Since a very large percentage of the income of political parties cannot be traced to the original donor, full details of all donors should be made available for public scrutiny under 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 more than 70 per cent of the sources of funds to be unknown.

But in India at present, that is the case.

Source: Association for Democratic Reforms