Funding of political parties

The Congress is reportedly going through a severe fund crunch, a development that has sent tongues wagging in political circles. With the grand old party losing power in state after state for more than three years, along with a rout in the 2014 parliamentary elections — the question turally arises whether power is the only means for a political party to fill its coffers and stay fincially solvent. The media is lately agog with reports of Congress fund magers asking the party’s 44 Lok Sabha and 68 Rajya Sabha MPs to dote a month’s salary. Requests for dotions are said to have been sent out to former Congress MPs as well. The Delhi Congress, with not a single representative in parliament or the state assembly presently, has reportedly asked its former MPs and MLAs to deposit Rs 1 lakh each by first week of October. The humble Congress member is already being tapped since February this year, mandatorily contributing Rs 250 annually to the party fund. The Congress expects to raise about Rs 750 crore annually from its 3 crore members, with the funds collected to be split in the ratio of 75 per cent for the AICC and 25 per cent for the state units. With all this talk of bankruptcy swirling around, Congress leaders are trying to put on a brave face. Senior Congressman PC Chacko has claimed that party’s fincial problems are due to ‘its activities being on the rise’. However, Congress insiders are said to be sore at big corporate groups sensing in advance the party’s defeat in the Lok Sabha elections last year and switching allegiance to the BJP! The fund crisis has only deepened since then with subsequent defeats in assembly elections in several states, including the biggest revenue-earning state Maharashtra.

According to Election Commission figures, the BJP spent Rs 714 crore and won 281 seats in the 2014 Lok Sabha elections, while the Congress spent Rs 516 crore to secure only 44 seats, its worst performance ever. While no pre-poll survey could predict the scale of the rendra Modi wave then, the saffron party was already streets ahead in terms of fund collection. According to a report by the Association for Democratic Reforms (ADR), the BJP maged to garner Rs 560 crore as against Rs 350 crore by the Congress, Rs 77 crore each by NCP and BSP, and Rs 65 crore by the two Left parties CPI (M) and CPI together. Political observers believe the BJP must have improved its fund position by now, after one year in power. Meanwhile, questions are being asked about the role of Congress fund magers, who allowed the party to slip into such a crisis despite being in power at the Centre for ten years, as well as ruling several money-spinning states. As for expenditure in the 2014 general elections, both the BJP and the Congress spent much higher than the contributions they declared to the Election Commission. They failed to explain for this in their submissions to the poll watchdog. But then, regarding income and expenditure — most political parties in the country have long been on the same page, keeping their accounts deliberately and determinedly opaque from public scrutiny. The prime reason is not far to seek, as revealed in an alysis by ADR and tiol Election Watch that as much as 75 per cent of the funds of India’s top six tiol political parties came from ‘unknown’ sources. This despite claims made by the tiol parties that all details of funding were submitted to the Election Commission and the Income Tax department.

Between 2004-05 and 2011-12, this alysis showed that known donors, including electoral trusts, accounted for only one-fourth of the total income of the six parties — Congress, BJP, BSP, NCP, CPI(M) and CPI — adding up to Rs 4,895.96 crores during this period. After accounting for income from other known sources like membership fees, party levy, sale of coupons, bank interest, sale of assets and sale of publications — about three-quarters of their revenue fell into this ‘unknown’ category. The parties argue that they are not obliged to reveal these sources because most dotions fall below the Rs 20,000 range, the details of which would be too cumbrous to provide. A subsequent ADR study in 2013-14 showed that corporates and business houses accounted for 90 per cent dotions made to tiol political parties. In the three Lok Sabha elections from 2004 to 2014, the total funds collected by tiol parties grew nearly five-fold to Rs 2,237.28 crore, as per poll expenditure statements submitted to the EC. Surely the actual figures will be considerably larger, considering that the 2014 general elections alone was estimated to cost at least Rs 30,000 crore by the government, political parties and candidates. India is paying heavily for being among a minority of countries allowing political parties and candidates to receive ‘anonymous dotions’. The money used for buying votes has to be returned after winning power by granting favours like contracts, licenses and permits — which has become the bane of the country’s polity. However, political parties are up in arms at the notice issued by the Supreme Court to six tiol political parties about a directive of the Central Information Commission (CIC) requiring funding details to be subject to RTI queries. The NDA government recently told the apex court that political parties cannot be brought under RTI because it would lead to ‘malicious intentions’ by vested interests and affect the smooth functioning of parties!