Indian Political Parties Financial Reporting: As Good as Nothing
Sai Krishna Muthyanolla
March 21, 2015
In the previous article, we saw how there has been a phenomenal growth in the number of political parties in the last few years. In this article, we will focus on the financial reporting of the political parties.
Every political party registered under section 29A of the Representation of the People Act, 1951 (RPA) is supposed to submit two kinds of reports to the Election Commission of India (ECI) every year. According to section 29C of the RPA, political parties have to submit contribution reports as well as the annual audit report.
Contribution Report: The treasurer of a political party or any other person authorized by the political party should prepare a report each financial year with details of
Annual Audit Report: This is more like a balance sheet.
It is also to be noted that people or companies that donate to registered political parties also get income tax exemption to the extent of their donation. Section 80GGB of the Income Tax Act, 1961 (IT Act) relates to deductions in case of contribution from companies & Section 80GGC relates to deductions in case of contribution by individuals.
The status of submission of these reports from 2009-10 is compiled and this paints a very sad state of affairs. This data is as per the information available on the website of Election Commission of India (ECI) till date.
From 2009-10 to 2013-14, only 5.9% of the parties submitted their Contribution Reports while an equally dismal 5.2% of the parties submitted their Annual Audit Reports.
With not even 10% of the parties submitting their contribution reports and annual audit reports to the ECI, the entire issue of political party funding becomes more important. The Central Information Commission’s decision that the six national parties are public authorities under the Right to Information Act (RTI) assumes greater significance.
The ECI on its part has issued a set of transparency guidelines in August 2014 to be followed by all political parties. The Law Commission of India, in its 255 report released recently also discussed the issue of election finance reform in detail.
We should all be demanding that political parties disclose their source of funding and mandatorily submit these reports. Transparency in political party funding should be the first step in the direction of major electoral reforms.
Data Source: Election Commission of India Website