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2,044 unrecognised parties continue to collect donations, here is how

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Out of the 2,099 political parties in India, 2,044 of them are un-recognised, a latest gazette issued by the Election Commission of India says.

2,044 unrecognised parties continue to collect donations, here is how

Either newly registered parties or those which have not secured enough percentage of votes in Assembly or General elections to become a state party or those which have never contested in elections since being registered are considered unrecognised parties, a report prepared by the Association for Democratic Reforms states.

An unrecognised party does not enjoy all the benefits that recognised parties (Regional and National Parties) do. These include:

  • No entitlement to an exclusive allotment of a reserved election symbol to the candidates set up by the party.
  • No eligibility for free copies of electoral rolls.
  • No authorization for free broadcast/ telecast facilities over All India Radio/ Doordarshan during Assembly and General Elections.
  • No eligibility for subsidized land for party offices.

It is to be noted that political parties are completely exempted from paying Income Tax as long as they file their Income Tax returns to the IT Department and submit details of donations received above Rs 20,000 to the ECI, annually. Even if the parties declare that they have not received any amount above Rs 20,000 from a single donor, they would still enjoy tax exemption.

Thus, political parties, once registered with the ECI, irrespective of their status of recognition, can continue to collect donations and enjoy tax exemption, if they satisfy the above two conditions.

This report analyses the contributions reports, submitted by registered unrecognised parties between FY 2013-14 and 2015-16.

Declaration of donations by Unrecognised Parties: FY 2013-14 to 2015-16

a) For FY 2013-14, out of 1627 unrecognised parties only 89 or 5% filed their donations reports with the ECI and declared an income of Rs 14.03 cr from voluntary contributions.

b) A total of 1737 parties were listed by the ECI as unrecognised parties during FY 2014-15 out of which only 106 or 6% submitted their contributions statements to the ECI. Their total declared income from voluntary contributions was Rs 6.86 cr.

c) 1906 parties were listed as unrecognised parties in FY 2015-16 of which only 99 or 5% submitted their donations report to the ECI, declaring a total income of Rs 4.37 cr from donations.

State-wise declaration of donations by unrecognised parties

a) Between FY 2013-14 and 2015-16, the donations details were declared by unrecognised parties from 18 States which includes Rajasthan, Telangana, Haryana, West Bengal, Tamil Nadu and Maharashtra among others.

b) Unrecognised parties of Rajasthan declared a total of Rs 10.79 cr between FY 2013-14 and 2015-16, highest among all states followed by parties from Telangana with Rs 3.82 cr and Haryana with Rs 2.74 cr.

c) It is to be noted that Unrecognised Parties from Haryana, Uttar Pradesh, Tripura, Karnataka, Bihar, Assam, Himachal Pradesh and Jammu & Kashmir failed to submit their donations details for at least one of the three years considered.

Unrecognised parties with highest declared donations, State-wise

a) Among parties of Rajasthan, National Unionist Zamindara Party, declared the highest donations of Rs 3.70 cr during FY 2013-14 while Shining India Party declared the highest donations during FY 2014-15 and FY 2015-16, with Rs 68.9 lakhs and Rs 76.76 lakhs respectively.

b) During FY 2013-14 and 2015-16, Lok Satta Party of Telangana declared the highest donations with Rs 190.81 lakhs and Rs 28.20 lakhs respectively. It is to be noted that 2 parties from Telangana declared NIL donations during FY 2014-15.

c) Aarakshan Virodhi Party of Haryana declared the highest donations of Rs 2.34 lakhs during FY 2013-14 while Haryana Lokhit Party declared the highest of Rs 272 lakhs during FY 2014-15. No unrecognised parties of Haryana declared donations during FY 2015-16.

d) For details of top 20 donors to unrecognised parties, refer Annexure.

Unrecognised parties which have submitted donations report for all three years

a) A total of 33 unrecognised parties submitted their donations reports for all the three financial Years considered for this report. These include ten from Gujarat, six from West Bengal, four each from Tamil Nadu, Maharashtra and Rajasthan, two from Chhattisgarh and one each from Delhi, Andhra Pradesh and Madhya Pradesh.

b) 14 out of these 33 unrecognised parties declared NIL donations for all the three financial years. These include six from Gujarat, two each from Rajasthan and West Bengal and one each from Andhra Pradesh, Chhattisgarh, Delhi and Maharashtra.

c) Top three unrecognised parties which declared the highest total donations are the Indian Peoples Green Party, Rastriya Ahinsa Mancha and Dharmarajya Paksha.

Unrecognised parties which have declared donations below Rs 20,000

a) The Representation of the People Act, 1951 as well as the form to be submitted with the ECI, for donations received during financial year, requires registered political parties to declare details of voluntary contributions above Rs 20,000.

b) 42 unrecognised parties declared donations below Rs 20,000 in their submission to the ECI for at least one financial year being considered.

c) Out of Rs 14.03 cr declared as voluntary contributions during FY 2013-14 by unrecognised parties, Rs 9.99 lakhs came from donations below Rs 20,000. Similarly, Rs 20.79 lakhs out of Rs 6.86 cr during FY 2014-15 and Rs 27.52 lakhs out of Rs 4.37 cr during FY 2015-16 were donations below Rs 20,000.

Donations declared - Unrecognised parties vs. recognised State & National Parties:

a) During FY 2013-14, registered political parties declared receiving voluntary contributions of a total of Rs 393.18 cr out of which recognised parties (Regional and National Parties) declared receiving Rs 382.15 cr while unrecognised parties collected Rs 14.03 cr.

b) Out of a total of Rs 778.08 cr of donations declared by registered parties during FY 2014-15, Regional and National parties collected Rs 771.22 cr while unrecognised parties declared receiving Rs 6.86 cr.

c) While Regional and National parties collected Rs 281.85 cr during FY 2015-16, unrecognised parties received Rs 4.38 cr in donations.

Observations

  1. Only 5% of registered unrecognised parties filed their contributions report to the ECI between FY 2013-14 and 2015-16. Among the parties considered, only 33 submitted their reports for all three years.
  2. Unrecognised parties from only 18 States and Union Territories filed their contributions report for at least one financial year considered for this report.
  3. Unrecognised Parties from Haryana, Uttar Pradesh, Tripura, Karnataka, Bihar, Assam, Himachal Pradesh and Jammu & Kashmir failed to submit their donations details for at least one of the three years considered.
  4. There are five unrecognised parties which have declared receiving donations in lakhs in one year while declaring NIL donations during the other two years.
  5. It is to be noted that National Unionist Zamindara Party of Rajasthan, which declared receiving donations amounting to Rs 3.70 cr during FY 2013-14, declared voluntary contributions amounting to Rs 11.56 cr during FY 2014-15 and Rs 6 lakhs during 2015-16 in its audit report but its contributions reports are not available in public domain.
  6. 42 unrecognised parties declared donations below Rs 20,000 in their submission to the ECI for at least one financial year being considered.

Recommendations

  1. In 1999, the ECI had issued notices to more than 200 political parties which were registered till 1995 but failed to contest in any elections. Notices to those parties which were returned undelivered or parties which failed to respond to these notices were deleted from the list of registered parties, which added up to 150. Similarly, 255 political parties were 'de-listed' in 2016 from the list of registered parties as they were not active in the political process.This exercise should continue so as to weed out all political parties which do not contest in any election for more than 5 years and also as a means to strengthen the registration process.
  2. Regulation of registration of political parties is crucial to avoid money laundering, corrupt electoral practices and abuse of money power. Thus, the ECI should impose strict norms for the registration of an association of persons as a political party apart from taking the stringent step of de-recognizing those parties which fail to adhere to the rules.
  3. Full details of all donors should be made available for public scrutiny under the RTI. This would not only instill confidence of the public in the functioning and finances of political parties but would also strengthen the democratic process by weeding out those political parties which do not function for the benefit of the country and its people.
  4. IT scrutiny of unrecognised parties should be taken up, especially of those which do not contest in elections but declare voluntary contributions.
  5. The website of State CEO's should be regularly updated to provide details of status of submission of audit reports and donations reports by unrecognised parties.

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