political parties cannot be traced 67 % of the source of funds to be unknown

Recommendations of ADR
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 the 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 67 % of the source of funds to be unknown, but at present it is so in India.

Mode of payment of all donations (above and below Rs 20,000), income from the sale of coupons, membership fees, etc. should be declared by the parties in the ‘Schedules’ of their audit reports, submitted annually to the Income Tax department and the ECI.

The ECI has recommended that tax exemption be awarded only to those political parties which contest and win seats in Lok Sabha, Assembly elections. The Commission has also recommended that details of all donors who donate above Rs 2000 be declared in public domain. ADR supports ECI for its strong stand to enforce reforms in funding of political parties and hopes that these reforms are proactively taken up by the Government for implementation.

Scrutiny of financial documents submitted by the political parties should be conducted annually by a body approved by CAG and ECI so as to enhance transparency and accountability of political parties with respect to their funding.

The National and Regional political parties must provide all information under the Right to Information Act. This will only strengthen political parties, elections and democracy. However, RTI or not, political parties should voluntarily account for every rupee that they get or spend.