Revealed: Loophole that hides 90 PER CENT of political party donations

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Behind the smoke of paltry figures, seemingly intended to hide the big-ticket donors' details, political parties in India have unwittingly revealed a lot.



About 90 per cent of the donations received by these parties across the political spectrum are from sources whose identities are not in the public domain.



The news puts all those donations - any amount above Rs 20,000 that needs to be declared with donor specifics - under a cloud of suspicion.



And with this, it also becomes clear that our political parties have been skillfully exploiting the loopholes in this entire donation-declaration system.



The ploy to hoodwink has come to fore from the latest report by the Association for Democratic Reforms (ADR).



The report shows that authorities, including the income tax department as well as the EC, do not have the details about most of the donors.



The latest report by ADR said that the total income of national parties for 2012-13 was Rs 991.20 crores.

However, the total donations above Rs 20,000 declared were Rs 99.14 crores, from 3,777 donors. Only 10 per cent of the total donations are from known sources.

According to the rules, political parties are required to submit details of donations received above Rs 20,000 from across India annually to the EC.



Apart from collecting donations or voluntary contributions, it is seen from the income tax returns of political parties that there is a coupon system being adopted by a few parties for collecting funds.

They issue coupons in lieu of receipts to donors for cash contributions. As they are cash donations, it becomes all the more difficult to establish the identity of the donor.



"This implies that a lot of cash donations received remain unaccounted for in the books of accounts as only those amounts would be recorded for which a receipt has been issued.



"Thus, it is imperative to have a strict regulatory mechanism wherein political parties have to report the correct quantum and the source of donations received," said the ADR report.









Of the major sources of income, sale of coupons has been listed by most of the major political parties.



Income for Congress from the sale of coupons or publication amounted to Rs 312.24 crores (73.35 per cent of total income), while the NCP received Rs 3.76 crores from the sale of coupons (14.16 per cent of the total income).



A total of 2,371 out of 3,775 donors (or 63 per cent) contributing Rs 37.64 crores to the national parties have not declared their PAN details in the contribution form.

