Mo' Money, No Problems: Who Funds Political Parties?
The big fat Indian elections are underway, and it is powered by rich Indian corporate moguls.
And, it’s no surprise that their darling Bharatiya Janata Party received Rs 553 crore in income from unknown sources in the financial year of 2017–18. This is found in the data compiled by the Association for Democratic Reforms (ADR).
This amounts to over four times the income received by five other national parties—the Congress, the Bahujan Samaj Party, the Nationalist Congress Party, the Trinamool Congress and the Communist Party of India—combined.
Amounts under Rs 20,000 received as donations and other sources are classified as unknown because political parties do not need to disclose details of their respective donors.
The ADR report found the total income from unknown sources of the BJP to be Rs 553.38 crore (80 per cent of the total); Congress with Rs 119.91 crore accounted for 17.4 per cent of the total unknown income; BSP and NCP got Rs 10.67 crore and Rs 5.37 crore respectively.
The classification of unknown income has been classified under several heads: voluntary contributions, electoral bonds, collections from the sale of coupons, and miscellaneous income.
Contesting polls is getting costlier in India and analysts say parties are becoming more reliant on donations from anonymous businessmen, leading to a lack of transparency and worrying conflicts of interest.
Electoral bonds were introduced in the budget for the financial year of 2018 as a battle against black money in political funding. Finance Minister Arun Jaitley, had in 2017, argued that since the electoral bonds route political funds through the formal banking channel—and that every political party has to disclose how much it received—they would bring transparency into political funding.
Two years down the line, the problem persists. There’s a fatal flaw: the anonymity of donors (how much they donated and to which party).
However, the case has recently been dragged to the Supreme Court, which on April 13th, in an interim order, refused a stay on the controversial anonymous bond scheme but asked all political parties to disclose to the Election Commission of India, the details of every donation they received by April 15th.
Bonds worth Rs 1,407.09 crore were received by political parties between March 2018 and January 24, 2019, an RTI query revealed.
Interestingly, 99.8 per cent of donations (Rs 1,407.09 crore) were in the highest denominations of Rs 10 lakh and Rs one crore in that period.
According to ADR, the BJP accounted for 93 per cent (Rs 437.04 crore) of the total donations of above Rs 20,000 received by all the national political parties in 2017-18.
This is more than 12 times the aggregate declared by the Congress, NCP, CPI, CPM and AITC for the same period.
The remaining amount was received by the Indian National Congress (Rs 26.658 crore), Nationalist Congress Party (2.087 crore), Communist Party of India (Marxist) (Rs 2.756 crore), Communist Party of India (Rs 1.146 crore) and All India Trinamool Congress (Rs 0.20 crore). Bahujan Samaj Party (BSP) declared no donations of more than Rs 20,000.
However, it’s hard to ignore the fact that 90 per cent of the total donations (Rs 469.89 crore) received by national political parties in 2017-18 were by corporate/ business houses.
A total of 1,361 donations amounting to Rs 422.04 crore were made by corporate/business sectors. 1,207 such donations were made to the BJP amounting to Rs 400.23 crore, while Congress received 53 donations from corporate/business sectors amounting to Rs 19.298 crore.
The BJP has a clear edge when it comes to the total income and expenditure of political parties. In fact, the saffron party has a total income of Rs 1,027.339 crore during 2017-18. This is about three-fourths of the other six parties combined.
The previous ADR report notes that in the past 12 years, the BSP has consistently declared to the Election Commission that it receives no donations over Rs 20,000. Its total income was Rs 51.694 crore of which the party spent only 29 per cent (Rs 14.78 crore).