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Who are the Unknown Sources that the BJP Received 464.94 Crores From?

In a shocking revelation, a report by Association for Democratic Reforms has said that 88% of over Rs 20,000 donations received by the BJP were from unknown sources. BJP’s total income from unknown sources, including voluntary contributions, miscellaneous income, was Rs. 464.94 crore during 2016-17, while that of Congress’ total income from unknown sources stood at Rs. 126.124 crore, reported PTI quoting ADR report.

BJP

Analysis of Donations Received above Rs 20,000 by National Political Parties – FY 2016-17
 
This report, prepared by Association for Democratic Reforms (ADR) and National Election Watch (NEW), focuses on donations received by the National Political Parties, above Rs 20,000, during the Financial Year 2016-17, as submitted by the parties to the Election Commission of India (ECI). The National Parties include Bharatiya Janata Party (BJP), Indian National Congress (INC), Bahujan Samaj Party (BSP), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India (Marxist) (CPM) and All India Trinamool Congress (AITC).
 

Executive Summary

The executive summary below lists the key observations drawn from the report:

  1. Donations above Rs 20,000 to National Parties from all over India (FY 2016-17)
    1. The total donations (above Rs 20,000) declared by the National Parties was Rs. 589.38 cr, from 2123 donations.
    2. A total of Rs 532.27 cr was declared by BJP from 1194 donations while INC declared receiving Rs 41.90 cr from 599 donations. The donations declared by BJP is more than nine times the aggregate declared by INC, NCP, CPI, CPM and AITC for the same period.
    3. BSP declared that the party did not receive any donations above Rs 20,000 during FY 2016-17, as it has been declaring for the past 11 years.

 
 

 

  1. Comparison of donations received by National Parties during FY 2015-16 and FY 2016-17
    1. The total donations of the National Parties during FY 2016-17 increased by Rs 487.36 cr, an increase of 478%, from Rs 102.02 cr declared during the previous financial year, 2015-16.
    2. Donations to BJP increased from Rs 76.85 cr during FY 2015-16 to Rs 532.27 cr during FY 2016-17 (593% increase) while NCP has declared an increase of 793%, from Rs 71 lakhs in FY 2015-16 to Rs 6.34 cr in FY 2016-17.
    3. Donations to AITC increased by 231%, CPM and INC have declared increase of 190% and 105% respectively as per their donation reports for FY- 2015-16 and 2016-17, while that of CPI decreased by 9%.

 

 

 

  1. Sources of income of National Parties – FY 2016-17

 

  1. Total income of National Parties (as per their audit reports) for FY 2016-17 – Rs 1559.17 cr.
  2. Total income of the National Parties from known donors (details of donors as available from contribution report submitted by parties to Election Commission): Rs 589.38 cr, which is 37.8% of the total income of the 7 National parties during FY 2016-17.
  3. Total income of the parties from other known sources (e.g., sale of assets, membership fees, bank interest, sale of publications, party levy etc.): Rs 258.99 cr, or 16.61% of total income.

d)      Total income of the seven National Parties from unknown sources (income specified in the IT Returns whose sources are unknown), for the FY 2016-17 is Rs 710.80 cr, which is 45.59% of the total income of the parties from all over India.
 

* Other known income include: sale of moveable & immoveable assets, old newspapers, membership fees, delegate fee, bank interest, sale of publications and levy

 

  1. Details of unknown sources of income as declared by the parties in their IT Returns

a)      Among the unknown sources of funding, maximum funds were collected under “Voluntary Contributions” by BJP during FY 2016-17. A total of Rs 464.84 cr was collected under this head which formed 99.98% of the total income from unknown sources of BJP.
b)      The most preferred unknown source of funding for INC was “Sale of coupons” under the party collected a total of Rs 115.64 cr which formed 91.69% of the party’s total income from unknown sources during FY 2016-17.
 
 

 

  1. State-wise donations to National Parties – by Cash, cheque/ DD, bank transfers
    1. Segregation of donations according to State was made by ADR/NEW based on the address provided by the parties in their donations report to the ECI.
    2. A total of Rs 290.90 cr was donated to the National Parties from Delhi, followed by Rs 112.31 cr from Maharashtra and Rs 20.22 cr from Uttar Pradesh.
    3. A total of Rs 91.91 cr, (15.59% of total donations received by the National parties, FY 2016-17), could not be attributed to any State/ Union Territory due to incomplete information provided by the parties.

 

 

  1. Donors from Corporates/ business sectors Vs. Individual donors
    1. 708 donations to the National Parties were made by corporate/business sectors amounting to Rs 563.24 cr (95.56% of total donations) while 1354 individual donors donated Rs 25.07 cr (4.25% of total donations) to the parties during FY 2016-17.
    2. 531 donations from corporate/business sectors were made to BJP (Rs 515.43 cr) while 663 individual donors donated Rs 16.82 cr to the party during FY 2016-17.
    3. INC received a total of Rs 36.06 cr via 98 donations from corporate/business sectors and Rs 5.84 cr via 501 individual donors during FY 2016-17.

 

  

  1. Top donors to National Parties, FY 2016-17
    1. Satya Electoral Trust donated a total of Rs 265.12 cr to BJP and INC and is one of the top 2 donors to the two parties. The Trust donated Rs 251.22 cr to BJP (94.76% of total funds received by the party) and Rs 13.90 cr to INC (5.24% of total funds received by the party).
    2. NCP received Rs 2 cr donations from B.G. Shirke Construction Technology Pvt. Ltd. and Rs 1.10 cr from A.N. Enterprises Infra Services Pvt. Ltd.

 
 

Observations and Recommendations of ADR

Observations

 

  1. Incomplete disclosure of information in the donations report: There is still ambiguity in details of donations declared by the National Parties for FY 2016-17. 
    1. Of the 7 National Parties, 4 parties, BJP, INC, CPI and CPM had not declared PAN details of 166 donations through which the parties collected a total of Rs 2.86 cr. INC collected Rs 1.69 cr from 88 donations but failed to provide PAN details of donors. One donation to BJP (Rs 1 lakh) and two donations to CPM (Rs 2.25 lakhs) did not have PAN details in their donations statements for FY 2016-17.
    2. AITC has not provided cheque number, bank on which it was drawn and the date on which the cheque was received/ encashed for any of its 12 donors who contributed a total of Rs 2.15 cr. Thus, without the complete cheque/DD details, it would be a time consuming process to link the donors against their donations and hence trace the money trail.

c)   CPI has also not declared the details of cheque and DD (cheque number, bank on which it was drawn and the date on) for a total of 33 donations through which the party received Rs 37.41 lakhs.
d)   CPI has not provided the names and PAN number of 56 donations of state secretaries and districts councils of the party though their contributions amount to Rs 1.04 cr while the party collected Rs 1.13 cr from 75 donations without PAN.
e)   BJP has collected Rs 1.54 cr from 26 donations without declaring Address and Mode of payments in its donations statement for FY- 2016-17.

  1. Similar to the delay in submitting their audit reports to the Election Commission of India, the National Parties have failed to submit copies of their donations report before the deadline of 30th Sept, 2017. BJP delayed its submission by 87 days while AITC submitted it on 27.10.2017, 26 days after the due date. CPM delayed its submission by 55 days BSP, CPI, NCP and INC filed their donations report before the due date.

 

Recommendations

  1. The Supreme Court gave a judgment on September 13, 2013 declaring that no part of a candidate’s affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs 20,000 should be blank.
  2. 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 nearly 50% of the source of funds to be unknown, but at present it is so in India.
  3. The National and Regional Parties should, ideally, lead by example by filing complete and correct statements of donations to the ECI well in time for public scrutiny so as to encourage financial transparency.

4.       The National and regional political parties must provide all information on their finances under the Right to Information Act. This will go a long way in0 strengthening political parties, elections and democracy. For more information, please refer to https://goo.gl/o1qFYT

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