Thinking Together

Successive reports of the Association for Democratic Reforms, an NGO, on funding of political parties shows that the bulk of the contributions to the national parties, including the CPI(M), are from unknown sources. If this is true, why is it that the CPI(M) is not providing information about its various sources of fund?


Bhaskar Ghosh, Kolkata


The Association for Democratic Reforms (ADR) is bringing out a report annually about the finances of political parties based on the data collected from the Election Commission of India.  This is the same data contained in the audited accounts which is submitted to the Income Tax Department by the parties, which is mandatory.

Coming to the question of CPI(M)’s “unknown sources” of contributions, this stems from a misunderstanding of the nature of the contributions and the sources of finances for the Party.  As per the law, in the income tax returns, details of any donation of Rs 20,000 and above should be provided.  This will include the name, address and PAN of the person or company concerned. In the case of the CPI(M), donations of individual contributions above Rs 20,000 constitutes only a tiny part of its total income.  For instance, in 2014-15, the CPI(M) had received only Rs 3.42 crores as contributions above Rs 20,000.  This constituted only 6 percent of the total income of Rs 123.92 crores.  In the year 2015-16, the Party had received 61 donations above Rs 20,000 amounting to a total of Rs 1.81 crores. 

The bulk of the income of the CPI(M) is from three sources: (1) Membership fee and levy from its members (2) Donations from individuals whose names and addresses are  recorded and receipts issued (3) Amounts received through mass collections by hundis, buckets and boxes.

A unique source of income of the CPI(M), unlike other parties, is the monthly levy paid by Party members.  There are more than 10.6 million Party members. Every Party member has to pay a fixed percentage of his/her income as levy to the Party. This constitutes, on an average, 40 percent of the total income of the Party. All the amounts received as levy is receipted and accounted for by the concerned Party committees.  Since these details cannot be made public, it cannot be construed that this is income from “unknown sources”. 

More than 50 percent of the income of the Party comes from voluntary contributions from Party sympathizers and the people.  Most of the people who contribute to the CPI(M) come from the working class and poorer sections who can donate only small sums which are generally below Rs 1,000.  Such contributions are done on the basis of receipts/vouchers and records are maintained at different levels of Party committees. 

The other source is the bucket and hundi collections.  Here individual contributors cannot be recorded but the collections made at the branch or local committee level is recorded and accounts maintained. 

To state, therefore, that the bulk of the finances of the CPI(M) are from “unknown sources” is totally misleading and wrong. 

The real issue is the money which is used by political parties which will not come into the formal accounting system.  It is this illegal money which needs to be curbed and stringent measures taken to stop the use of black money during elections.  

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