Only four of the 130 registered unrecognised parties in Maharashtra have filed their annual audit accounts with the office of the state chief electoral officer. Others are yet to do so, even two months after the mandated deadline of 31 October stipulated by the Election Commission (EC).
This is not the only instance of parties failing to comply with EC guidelines on transparency and accountability in funding.
Senior EC officials told The Quint that the guideline is rarely followed by registered recognised parties. There are altogether 1,851 parties in the country. While seven of them are national parties and 58 state parties, 1,786 of them belong to the category called “registered unrecognised” parties. According to a reliable report, less than 20 percent of such parties have ever contested any election, raising fears that they are often used by people and influential groups to funnel black money.
EC’s Guidelines
According to the transparency and accountability guidelines issued by the poll panel in August 2014, “all political parties shall submit to the commission or to such authority… a copy of the audited Annual Accounts with Auditor’s report for each financial year, before 31st October of each year”.
The question, therefore, that begs our attention is: Why do such parties exist, if they do not contest elections and rarely take part in any worthwhile political agitation? Random checks reveal that most of them do not have their own websites and many of them have a token presence on social media platforms.
In fact, while the website of the Maharashtra chapter of the EC does have a section on audited annual reports of political parties, many websites of offices of the EC in other states do not have such a section at all.
Vehicles for Money Laundering
Political observers say that a number of registered unorganised parties are used either as a front or for money laundering. And the guidelines are such that they can easily get away with that.
A recent poll panel suggestion that donations in cash be reduced from Rs 20,000 to Rs 2,000 will not solve the problem of black money laundering or transparency. On the contrary, it will be easy for potential money launderers to funnel in smaller amounts of Rs 2,000 in cash. The problem of anonymity will remain and, therefore, continue to be used by nefarious elements.
Lax Vigilance Measures
According to EC guidelines, “a 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.” Only donations in excess of Rs 20,000 need to be through cheques. Cash thus collected from anonymous sources needs to be accounted for and deposited in the party’s bank account within a week. Since disclosure, in many cases a rarity, happens once a year, lesser known parties can get away with anything, argue political commentators.
Not just the entry of cash in the books of political parties, there is a very easy exit option too. The EC’s guideline says:
If a party is incurring any expenditure, it shall ensure that no payment in excess of Rs 20,000 is made in a day to any person or company or entity in cash, except where (a) the payment is made in a village or town, which is not served by a bank; or (b) the payment is made to any employee or party functionary towards salary, pension or for reimbursement of his expenses; or (c) cash payment is required under any statute.
This in effect means that in India’s rural hinterland, political parties can make cash payments in excess of Rs 20,000.
Preference for Cash Donations
This is why there is a marked preference for cash among political parties. According to an analysis by the Association of Democratic Reforms, a New Delhi-based non-profit organisation that tracks political parties and elections, cash constituted 63 percent of all funds of parties from 2004-15. If this is the case with known parties (ADR tracks available data of leading political parties), one wonders what is the level of cash (read from anonymous sources) used by smaller parties.
This is the why there is a marked preference for cash among political parties. According to an analysis by the Association of Democratic Reforms, a New Delhi-based non-profit organisation that tracks political parties and elections, cash constituted 63 percent of all funds raised by parties from 2004-15. If this is the case with known parties (ADR tracks available data of leading political parties), one wonders what is the level of cash (read from anonymous sources) used by smaller parties.
It also has to give an undertaking to the effect that the party thus formed would uphold the sovereignty, unity and integrity of the country. Any aspiring party needs to submit a copy of its constitution and also affidavits of 100 voters to the effect that they members of the said party and not of any other party registered with the Election Commission.
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