Analysis of Donations declared by Regional Political Parties – FY 2020-21

Association for Democratic Reforms (ADR) focuses on donations declared by Regional Political Parties, during the Financial Year 2020-21, as submitted by the parties to the Election Commission of India (ECI).

For details of parties defaulting in their submission of contribution statements, donations declared by the parties without declaring PAN of donors, top donors, and donations from foreign countries.

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

Status of submission of Contribution Reports by Regional Parties to ECI (FY 2020-21)

Out of 54 regional parties analyzed, only 6 had submitted their donations reports to the ECI in the stipulated time period. 25 other regional parties have delayed their submission by a minimum of 3 days to 164 days.

Donations to Regional Parties as declared to the ECI (FY 2020-21)

Under Section 29C (1) of the Representation of People’s Act, 1951, political parties are required to prepare a report providing details of contributions in excess of twenty thousand rupees from any person in a particular financial year to avail 100% tax exemption. However, in FY 2020-21, we see that 3 regional parties (DMK, NPF and SDF) have also provided details of donations received below Rs 20,000 in their contribution reports.

The total amount of donations declared by 27 regional parties analysed, including both above and below Rs 20,000, was Rs 124.53 cr, from 3051 donations.

No donations have been declared by JMM, NDPP, DMDK and RLTP for FY 2020-21.

With regard to the total amount of donations, JDU leads with Rs 60.155 cr from 330 donations followed by DMK, which has declared receiving Rs 33.993 cr from 177 donations. AAP declared receiving Rs 11.328 cr that is the third highest amongst all regional parties. IUML and TRS have declared total donations Rs 4.165 cr and Rs 4.15 cr respectively.

91.38% or Rs 113.791 cr of the total donations received by regional parties have been received solely by the top 5 regional parties.

Comparison of donations received by Regional Parties between FY 2019-20 and FY 2020-21

DMK, TRS, JDU, and MNS saw the maximum percentage increase in their income from donations between FY 2019-20 and 2020-21.

Donations to DMK increased by 1110%, followed by TRS for which it was 940%, JDU for which it was 889%, and MNS which saw an increase of 486%.

Two parties (NDPP and DMDK) had not received any donations during FY 2019-20 and FY 2020-21.

JMM, YSR-C, SDF, TDP, and Shivsena declared the highest decrease in the percentage of donations received between FY 2019-20 and 2020-21, of 100%, 99.97%, 99.42%, 99%, and 98.90% respectively.

The top five parties which declared the highest donations in FY 2020-21 are JDU, DMK, AAP, IUML, and TRS. Out of these parties, JDU, DMK, and TRS declared an increase in their donations while AAP and IUML declared a decrease in the donations in comparison with FY 2019-20.

• Out of the total donations of Rs 124.53 cr declared by the regional parties, Rs 1.986 cr from 301 donations was received in cash during FY 2020-21. This formed 1.59% of the total donations to the parties.
• Maximum donations in cash were declared by DMK, which collected a total of Rs 131.02 lakhs, followed by IUML with Rs 63.78 lakhs, NPF with Rs 3.855 lakhs and AAP with Rs 110.
• Among all the states, donors from Tamil Nadu made the highest donations of Rs 63.78 lakhs in cash followed by donors from Karnataka who donated a total of Rs 110 in cash.
• Donations worth Rs 134.875 lakhs in cash did not have address details. 2 Regional Parties (DMK and NPF) have received such donations in FY 2020-21 .

State-wise donations to Regional Parties (FY 2020-21)

• Segregation of donations according to location was made by ADR based on the addresses provided by the parties in their donations report to the ECI.
• Donations declared by the regional parties contained details of donations received from 24 States/Union Territories/common capitals and 12 countries according to the declared address of donors. Only AAP and KCM declared donations from abroad.
• Regional parties have declared receiving the highest donations of Rs 48.658 cr from Delhi, followed by Rs 28.054 cr from Tamil Nadu and Rs 12.452 cr from Maharashtra.

Donors from Corporates/ business sectors Vs. Individual donors (FY 2020-21)

• 207 donations from corporate/business sectors amounting to Rs 95.45 cr were made to the regional parties while 2569 individual donors donated Rs 25.576 cr to the parties during FY 2020-21.
• In case of National Parties, 1398 donations were made by corporate/business sectors amounting to Rs 480.655 cr (80.953% of total donations) while 2258 individual donors donated Rs 111.65 cr (18.804% of total donations) during FY 2020-21.
• With the maximum number of donations during FY 2020-21, JDU has declared 58 donations from corporate/business sectors amounting to Rs 59.249 cr while 272 individual donors donated Rs 90.60 lakhs to the party.

Disclosure of PAN details in donations (FY 2020-21)

• Out of 27 regional parties which declared receiving donations, 10 parties, have declared donations of donors without their PAN details.
• Rs 4.333 cr or 3.479% of the total amount of donations received by regional parties do not have PAN details.
• Only NPF has not provided PAN details of even a single donor in its donations statement. 

Observations of ADR

1. ECI notification dated 29^th August,’14 stated that “…no tax deduction shall be allowed on the contributions made in cash by any person or company to a political party. Accordingly, the political party shall maintain name and address of all such individuals, companies or entities making donation to it, excepting petty sums, donated by the public only during its public rallies”. This notification was applicable for donations made from FY 2014-15 onwards. NPF has received 257 cash donations worth a total of Rs 3.855 lakhs that do not have name, address and PAN details. DMK declared one donation in cash worth Rs 131.02 lakhs (Contribution received through Functionaries, Volunteers in cash of less than Rs-2000/).
2. For FY 2020-21, address details for 283 donations worth Rs 10.746 cr (8.63 % of total donations received by the regional parties) were not declared by parties.
3. Out of 27 Regional Parties which declared receiving donations, 10 parties, have declared receiving 366 donations worth Rs 4.333 cr without PAN details.
4. For a large number of donations, regional parties have mentioned ‘Online/RTGS/Cheque no.’ as mode of contribution without providing any further information such as bank details. This makes it difficult to verify whether the information given is accurate or not.
5. Out of a total of 3051 donations, the mode of contribution for 210 donations worth Rs 13.225 cr is incomplete.
6. As per the data shared by SBI in response to ADR’s RTI application, Electoral Bonds worth Rs 324.36 cr were redeemed by parties in FY 2020-21. 5 Regional Parties (YSR-Congress– Rs 96.25 cr, DMK– Rs 80.00 cr, BJD– Rs 67.00 cr, AAP– Rs 5.95 cr and JDU– Rs 1.40 cr) have declared receiving donations through Electoral Bonds worth Rs 250.60 cr.