39% increase in income of five national parties

The Congress is the only political party among the six ‘national’ parties which hasn’t submitted its audited accounts for the financial year 2014-15 to the Election Commission, election watchdog Association for Democratic Reforms (ADR) has said.

Political parties are exempt from paying tax but need to maintain audited accounts and comply with provisions of the income tax to claim this exemption. The ADR found that several major regional parties have defaulted in filing their I-T returns for many years. In its analysis of the returns by political parties, the ADR also noted that substantial part of the donations to parties is below Rs 20,000. Parties only need to make public details of those who make donations of above Rs 20,000.

The ADR said that the Congress was yet to submit its accounts even 141 days after the deadline of 30 November, 2015. The Bharatiya Janata Party (BJP) submitted its audited accounts 104 days late and Nationalist Congress Party (NCP) by 63 days. Of the six ‘national parties’, the Communist Party of India (CPI), Communist Party of India (Marxist) and Bahujan Samaj Party (BSP) submitted their annual audited accounts within the deadline.

The audit report of political parties contains information on the various sources of income and items of expenditure of the parties over a financial year. According to the ADR’s analysis of these audited accounts, the income of the five national parties (excluding the Congress) increased by 39 per cent from Rs 920.44 crore during 2013-14 to Rs 1,275.78 crore during 2014-15 — a difference of Rs 355.34 crore. The CPI was the only ‘national’ party whose income decreased in the period.

Comparison of income of ‘National’ parties in FY 2013-14 and FY 2014-15

The analysis found that grants/donations/contributions or funds collected by the parties were the top source of income of the five national parties, constituting 88.73 per cent of their total income.

Apart from submitting their audit report to the EC, political parties also need to provide details of donors contributing above Rs 20,000 to them in a financial year. Such donations are the only ‘known sources of income’ of the parties. The ‘unknown sources’ are income declared in the IT returns without giving source of income from donations below Rs 20,000. These ‘unknown sources’ are – sale of coupons, relief fund, miscellaneous income, voluntary contributions, contributions from meetings, etc.

The analysis showed that only 45 per cent of the total donations of the parties come from contributions above Rs 20,000.

Details of a total of Rs 582.72 crore, or 55 per cent of total donations, of national parties in FY 2014-15 are not available in the public domain.

The NCP was the only party which claimed not to have received any donations below Rs 20,000 in FY 2014-15, and therefore details of all its donors are in the public domain. The BSP claimed not to have received any donations above Rs 20,000, and no details of its donors are in the public domain. A total of Rs 582.72 crore (55 per cent of total donations) to national parties was collected in FY 2014-15 from donors whose details are not available in the public domain, the ADR said.

Percentage share of contributions in total Income of National Parties for FY-2014-2015 (In Rs crore)