Political parties have multiple sources of funding and thus accountability and transparency should be an important aspect of their functioning. It is essential to have comprehensive and transparent accounting methods and systems which should reveal the true financial position of the parties.
The Election Commission of India (ECI), in its letter dated 19th November,’14 addressed to the Presidents/General Secretaries of all political parties, stated that it was mandatory for the parties to submit details of their audited reports to the Commission. This report analyses the total income and expenditure incurred, all over India, by the 37 Regional Parties during FY 2018-19, as declared by the parties in their IT Returns submitted to the ECI.
The Regional Parties include BJD, TRS, YSR-Congress, SHS, TDP, JDS, SP, AIADMK, DMK, JDU, AAP, NDPP, PMK, IUML, SAD, SDF, GFP, INLD, AIMIM, MNS, AJSU, RLD, RLSP, JVM-P, RJD, DMDK, JMM, AIUDF, LJP, MGP, MNF, ZNP, NPF, JKNPP, AINRC, PDA and MPC.
Status of submission of audited reports by the Regional Parties, FY 2018-19
The due date for submission of annual audited accounts for the parties was 31st Oct, 2019.
Out of 52 Regional Parties considered, 23 had submitted their audit reports on time, while 14 delayed their submission by several days, ranging from 4 days to 129 days.
Audit Reports of the remaining 15 Regional Parties for FY 2018-19 are unavailable on the website of the ECI, at the time of preparation of this report. These include some major political parties like JKNC, NPP, BPF, AGP, SKM, JKPDP, AIFB etc.
Hence, this report analyses the income and expenditure of 37 Regional Political Parties, whose audit reports are available on the ECI website, for FY 2018-19.
Total income declared by Regional Political Parties, FY 2018-19
The total income of the 37 Regional Parties for the FY 2018-19 was Rs 1089.60 cr.
BJD reported having the highest income of Rs 249.31 cr, which forms 22.88% of the total income of all the parties analysed, followed by TRS with an income of Rs 188.71 cr or 17.32% and YSR-C whose income was Rs 181.08 cr or 16.62% of the total income of the 37 Regional parties analysed in this report.
The total income of top 3 parties amounted to Rs 619.10 cr, which comprised 56.82% of the total income of the political parties analysed, collectively.
Comparison of Income of Regional Parties, FY 2017-18 and FY 2018-19
Out of a total of 37 Political Parties analysed, 26 parties have shown an increase in their income from FY 2017-18 to FY 2018-19 while 9 parties have shown a decline in their income during this period.
Two Regional parties namely PDA and NDPP had not submitted their Income Tax Returns to the ECI for FY 2017-18 and hence their income could not be compared.
Total income of the 35 parties increased from Rs 238.28 cr in FY 2017-18 to Rs 1081.566 cr in FY 2018-19, a total increase of 354% or Rs 843.286 cr.
BJD reported the highest increase in its income of Rs 235.19 cr followed by YSR-C and TRS which declared a total increase of Rs 166.84 cr and Rs 161.44 cr respectively, between FY 2017-18 and FY 2018-19.
Unspent Income of Regional Parties, FY 2018-19
There are 24 Regional parties who declared a part of their income as remaining unspent for the FY 2018-19 while 13 political parties spent more than the income collected during the year.
SHS has more than 89% of its total income remaining unspent while NDPP and TRS have 86.79% and 84%, respectively, of their income remaining unspent for FY 2018-19.
SP, DMK, SAD, INLD, MNS, RLD, RJD, AIUDF, MNF, ZNP, NPF, MPC & JKNPP are the 13 Regional parties that declared spending more than their income. SP has declared spending the highest amount of Rs 17.12 cr or 50.65% more than its income.
Total expenditure incurred by Regional Parties, FY 2018-19
The total declared expenditure of the 37 Regional parties for the FY 2018-19 was Rs 405.13 cr.
Total expenditure incurred by the top 3 parties is Rs 189.174 cr or 46.69% of the total expenditure as reported by the 37 political parties.
Top 3 parties that have incurred highest expenditure are YSR-Congress which had spent Rs 87.684 cr or 21.64%, followed by SP which spent Rs 50.92 cr or 12.57% and BJD which spent Rs 50.57 cr or 12.48%.
All sources of Income declared by Regional Political parties, FY 2018-19
37 Regional Parties collected Rs 919.31 cr or 84.37% of their total income from voluntary contributions (includes Donations & Contributions and Electoral Bonds) for FY 2018-19.
Under voluntary contributions, political parties collected 53.09% or Rs 578.49 cr of their income from Donations through Electoral Bonds while other Donations & Contributions amounted to Rs 340.82 cr or 31.28% for FY 2018-19.
Only 7 of the 37 Regional Parties that were analysed declared donations through Electoral Bonds amounting to Rs 578.49 cr.
7.39% or Rs 80.47 cr of the total income was generated through Interest Income & FDRs by the 37 Regional Parties during FY 2018-19.
Observations of ADR
158 days since the due date for submission, the income tax returns/audit reports of 15 Regional Parties are still not available on the ECI website at the time of preparation of this report.
Audit reports of PDA and NDPP are unavailable for FY 2017-18 for comparison.
After the analysis by ADR, it is found that the total sum of expenditure declared by SP in its audited statement is incorrect. On adding the various expenditure heads, it is found that the total declared by the party is Rs 5.594 cr less than the actual amount. This reinforces our demand for proper scrutiny of the parties’ audited accounts by the IT department.
Given the anonymity provided to donors by the scheme, it is seen that Electoral Bonds have emerged as the most popular mode of donations to Regional Political parties for FY 2018-19. More than 53% of the total income (Rs 578.49 cr) of the 37 Regional political parties analysed for FY 2018-19 is received from Donations through Electoral Bonds.
As per the data shared by SBI in response to ADR’s RTI application, Electoral Bonds worth Rs 2539.58 cr were redeemed by parties in FY 2018-19. Of this, Rs 1960.68 cr or 77.20% was received by the seven National Parties while Rs 578.49 cr or 22.78% was received by 37 Regional Parties analysed for FY 2018-19. It may be noted that audit reports of 15 Regional parties are not yet available in public domain. Many registered unrecognised parties have also declared contributions through Electoral Bonds to ECI in sealed covers. Once this data is available and subsequently if these parties declare receiving donations via Electoral Bonds, the total share of donations received from Electoral Bonds may increase further.
The most common and popular item of expenditure for the 37 Regional parties for FY 2018-19 are election expenses and administrative and general expenses.
During FY 2018-19 out of the 37 Regional Parties, DMK, IUML, JVM-P & LJP declared receiving a total income of Rs 10.535 cr from Sale of Coupons.
Prof Jagdeep Chhokar
IIM Ahmedabad (Retd.)
National Election Watch, Association for Democratic
+91 99996 20944