As the major political parties gear up for the assembly polls, their source of funding remain a mystery.
New Delhi: While the Narendra Modi government had embarked on the demonetisation drive with the ostensible objective of increasing transparency and tackling corruption and black money, even calling on his party, the BJP, to lead by example in matters of electoral reforms and political funding, Election Commission (EC) data reveals that the party is among three national parties to have not submitted their audited reports on income and expenditure to the commission.
According to Venkatesh Nayak of Commonwealth Human Rights Initiative, who uses the Right to Information Act to obtain information on governance issues, the Congress and the Nationalist Congress Party (NCP) are the two other national parties that have not submitted their audited reports to the EC before the October 30, 2016 deadline. Nayak said the EC maintains details of the accounts of 22 national and state-level political parties and the web page displaying these audit reports was last updated on December 31, 2016.
Besides the three national parties, Nayak said several state-level political parties have also not submitted their audited accounts for the year 2015-16, including AAP, Asom Gana Parishad, Samajwadi Party, Janata Dal (S), Janata Dal (U), J&K National Conference, J&K People’s Democratic Party and the Rashtriya Janata Dal.
Lamenting that the Centre has been adopting a rather lenient yardstick for the political parties, Nayak said it has been rather strict in enforcing the same guidelines on defaulting NGOs. “During the previous UPA regime and under the current NDA government, the registration of several thousand NGOs receiving foreign funding was cancelled for not submitting their annual statements of income and expenditure,” he said.
He said the orders pertaining to NGOs clearly show that the Centre can crack the whip even on political parties if it desires. “However, several national and state political parties, namely the AAP, BJP, INC, NCP, Shiva Sena and SP are contesting elections in the five poll-bound states without any qualms about missing the deadline for submitting their audit reports to the ECI.”
Noting that the submission of these audit reports is a prerequisite for all political parties to claim exemption from paying income tax on their income every year, Nayak said “yet the government does not seem to have initiated any action to revoke the IT-exemption for failing to submit audit reports as per the deadline.”
He said most political parties think that because they are NGOs they should not be covered by the RTI Act or the Lokpal and Lokayuktas Act for the purpose of transparency and accountability. “Moreover a handful of them connived quietly to amend the Foreign Contribution Regulation Act through the 2016 Finance Bill with retrospective effect, in order to legitimise their once illegal actions of taking foreign funding from the Indian subsidiaries of MNCs. But there is immense enthusiasm for imposing more and more regulations on NGOs to the point of their extinction,” he said.
Discrepancies in deposits and cash receipts
Nayak also pointed out that several political parties had declared minuscule amounts of money held in cash or in banks. “Whether these figures are a true reflection of the cash handled by these parties is a big question. Let alone fight elections, how do they pay for the upkeep of the party bureaucracy with so little funds is a big mystery,” he said.
Coming to the cash-in-hand disclosures of political parties for 2015-16, he said while none of the parties have so far volunteered detailed information about how they coped with the demonetisation-remonetisation drive, the audit reports for the financial year 2015-16 submitted by some of the parties contain clues about the amount of cash they may have had in hand.
He said details submitted by 16 prominent political parties had revealed that the Communist Party of India (Marxist) had declared the largest amount of cash-in-hand at Rs 3.56 crore, followed by the AIADMK with Rs 39.98 lakhs and the Bahujan Samaj Party (BSP) with Rs 26.59 lakhs.
However, in terms of bank balance, including fixed deposits, he said the BSP reported the largest amount at Rs 507.22 crore, followed by the CPI(M) declaring Rs. 282.23 crore, the DMK declaring Rs 244.29 crore and the AIADMK declaring Rs 216.46 crore. The contribution report submitted by the BSP for this year indicated that every donation received by it was below Rs 20,000, which allows the party to not disclose the name of the donor.
The data also revealed some remarkable small cash-in-hand figures. The Desiya Murpokku Dravida Kazhagamsaid (DMDK) it had only Rs 9,630, followed by All India Majlis-e-Ittehadul Muslimeen (AIMIM) at Rs 25,195 and the Shiromani Akali Dal with Rs 29,633.
There was a great deal of discrepancy between the cash-in-hand and the bank deposits of these parties as well. While DMDK declared bank balance and deposits to the tune of Rs 3 crore, AIMIM declared Rs 83.79 lakhs and SAD Rs 19.24 lakhs. On the other hand, the Telugu Desam Party declared Rs 4.47 lakhs as cash-in-hand but its bank balance and deposits were much higher at Rs 59.35 crore. Similarly, the Telugu Rashtra Samiti declared Rs 1.57 lakhs as cash-in-hand and Rs 14.29 crore as bank balance and deposits.
Nayak said since actual position vis-a-vis the cash-in-hand figures of these parties on November 8, 2016, was announced is not known, all these political parties have a duty to come clean on the amounts deposited in demonetised notes of Rs 500 and Rs 1000 and the manner in which this was done. “As they claim that all donations received were legitimate and from the general public, surely, there should be no qualms in clarifying how they dealt with the effect of demonetisation,” he reasoned.