Of the 50
odd recognized state parties, only 22 have submitted annual audit reports as on
date for the year 2018-19. BJD, YSRCP, TRS & JD(S) reported a significant
increase in their income in 2018-19, mainly through electoral bonds.

In
an earlier
story
, we looked at the status of submission of ‘Annual
Audit Reports’ by recognized national parties and have analysed the reports
that were submitted so far for 2018-19.  As
is the case with recognized national parties, even the recognized state parties
are required to submit their Annual
Audit reports
along with Contributions Report and Expenditure
reports.

Only
22 recognized state parties have submitted the Annual Audit Reports
.

As
per Election Commission of India (ECI), there are currently 53 recognized state
parties. Out of these only 22
parties have submitted
their Annual Audit report as
of 25 November 2019. Among these 22 political parties, 11 parties have
submitted the audit reports prior to the cut-off date of i.e. 31st
October.

These
Parties include: AIADMK,AJSU, INLD,
JD(U),
JMM,
JVM(P),
MNS,
PDA,
RLD,SAD
& SDF

annual audit reports_Submssion status of annual audit reports by Recognized State Parties

The
other 11 recognized state parties which have submitted their annual audit
report for 2018-19, but not prior to 31st October cut-off are : AAP, BJD,
DMDK,
JD(S),
SP,
PMK,
TRS & YSRC, MGP, NPF & NDPP.

26
recognised State political parties have submitted the Contribution reports
while 27 parties have submitted Expenditure reports.

Apart
from the annual audit reports, the recognised state political parties are also
required to submit contribution report which provides the details of the
contributions received and also expenditure report which details the
expenditure by the political parties during general elections.

The
cut-off date to submit the contribution reports is 30th
September
for recognized state parties as well. However, as on
date only 26 state parties have submitted
the contribution reports
. Of these, only 6 political
parties have submitted prior to the cut-off date. These include : AIADMK,
AIUDF,
INLD,
MNS,
SAD,
& TDP.

annual audit reports_Submssion status of annual contribution reports by Recognized State Parties

Furthermore,
political parties are required to submit Expenditure report with 75 days of
completion of assembly general elections and 90 days
after completion
of Lok Sabha general elections. While only 27 of the
53 recognized state parties have submitted their expenditure
reports
, only 8 political parties have submitted the reports by
the cut-off date. 

annual audit reports_Submssion status of annual expenditure reports by Recognized State Parties

Of
all the recognised State parties , only All India Anna Dravida Munnetra
Kazhagam (AIADMK) and Shiromani Akali Dal (SAD), have submitted all the three
reports within the cut-off dates.

Significant
increase in the income of TRS and YSRCP in 2018-19, the election year

Of
the 22 recognised state political parties which have submitted their Audit
reports, 6 political parties belong to the southern states of India.  Of these AIADMK, DMDK & PMK belong to
Tamil Nadu while JD(S) has major presence in Karnataka.  TRS and YSRCP belong to the two Telugu
speaking states of Telangana and Andhra Pradesh respectively.

As
per the annual audit reports submitted by these political parties, we can see
that income of TRS and YSRCP had a significant increase in 2018-19 compared to
2017-18. This could be because both the Assembly & Lok Sabha general elections
were held in these two states during this year. The assembly general elections in
Telangana took place towards the end of 2018 while in Andhra Pradesh, they were
held in April 2019.

All
these 6 political parties reported an increase in their income. As we stated in
the previous story about the national parties, this could be due to the general
elections.

In
2017-18, the income of  TRS was ₹ 27.3 crores which increased by nearly 7 times to ₹ 188.7 crores in 2018-19.  Similarly, the revenue of YSRCP for the year
2017-18 was ₹
14.2 crores, which has increased significantly in 2018-19 to ₹ 181.1 crores.

JD(S)
which contested the Karnataka assembly general elections in April 2018 showed a
revenue of ₹
38 crores in 2018-19, while it was ₹ 15.4 crores the previous year. AIADMK also doubled up
its revenue to ₹
28.1 crores in 2018-19 from ₹
12.7 crores in 2017-18.

annual audit reports_Income received by Recognized State Parties

Electoral
Bonds are the major income source in 2018-19 for TRS, YSRCP & JD(S)

TRS
received ₹
182.7 crores i.e. nearly 97% of its income is 2018-19 from ‘Voluntary Donations
and Contributions’. As per the contribution
report
submitted by TRS, ₹ 24.8 crores were received through contributions of
over ₹
20,000. Another ₹
16.5 crores were received through ‘Electoral Trusts’. However, a significant
portion of donations/contributions received by TRS is through electoral bonds
which amounted to ₹
141.5 crores in 2018-19.

As
per the
contribution report
submitted by YSRCP, approximately ₹ 53.5 crores were received through donations amounting
to more than ₹
20,000 and ₹
27 crores were received from a single electoral trust i.e. Prudent Electoral
Trust. Audit Report of YSRCP shows that ₹ 99.8 crores were received through electoral bonds in
2018-19.

Even
JD(S) has received ₹
35.3 crores of its ₹
38 crores income in 2018-19 through electoral bonds.

Meanwhile
AIADMK, reported ₹
12.2 crores as interest income along with ₹ 10.2 crores received via ‘Fee & Subscriptions’
and another ₹
5.7 crores are received through ‘Collection from issuance of forms &
application fees’. Not a single rupee is through donations or contributions.

BJD
also reported a huge increase in its income in 2018-19, mainly through
Electoral Bonds

annual audit reports_Income received by Recognized State Parties Others

Most
of the other recognized state political parties have reported an increase in
the revenue for year 2018-19 over the previous year. Biju Janata Dal (BJD) also
reported a significant increase in its revenue for 2018-19. In 2017-18 the
income of BJD was reported as ₹
14.1 crores, but in 2018-19, it has increased to ₹ 249.3 crores i.e. an increase by more than 17 times. Like
in the case of Telangana & Andhra Pradesh, Odisha also had both assembly
& Lok Sabha general elections during 2018-19. This could be the reason for
such an increase in income.

The
annual audit report states that ₹ 242.9 crores i.e. nearly 97% of the revenue was
generated through ‘Grants/Donations/Contributions’. A significant portion of
this amounting up to ₹
213.5 crores are received through Electoral Bonds. ₹ 25 crores are received from AB General Electoral
Trust.

Among
the other larger recognized State Parties, AAP has nearly doubled its income with
₹ 19.3 crores
in 2018-19 of which ₹
19.2 crores are through ‘Donations and Contributions.’ Janata Dal(United) which
reported an income of ₹
23.6 crores have received ₹
13.18 crores from donations above ₹20,000 as per their contribution
report
, of which ₹ 13 crores are from a single source through multiple
donations.

Surprisingly,
Samajwadi party has seen a dip in the income compared to 2017-18. It reported
an income of ₹
47.2 crores in 2017-18, while it is only ₹ 33.8 crores for 2018-19. The difference can be mainly
attributed to the fall in income under ‘Fees & Subscription’, through which
it earned ₹
19.6 crores in 2017-18 while it is only  ₹ 51.5 lakhs in 2018-19.

Non-submission
of financial reports an issue even with the recognized State parties

As
is the case with National
Parties
, even the recognised state parties are not complying
with the cut-off dates as far as the submission of Annual Audit Reports, Contribution
Reports and Expenditure reports are concerned. As we have seen, the number of
parties who have submitted so far is less than half the total number and the
number for the parties who submitted on time is much lower than that.

Such
delay in the submission of reports severely handicaps any analysis and
observations that can be made in respect to financial transparency.  A case in point is the Telugu Desam
party  (TDP) in the Telegu speaking
states. Both the TRS & YSRCP, the major parties in Telangana & Andhra
Pradesh reported a significant increase in their income, majority of it through
electoral bonds. Though TDP is also a major party in these states, they are yet
to submit the annual audit report which impedes any holistic understanding of
the situation.

As
indicated in the earlier
story,
 strict laws
which could lead to imposition of fines for non-compliance along with the
change in rules that would require the political parties to disclose all the
donations received including  through
electoral bonds, seem like the only way out for better transparency in
political funding.

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