BJP filled coffers with Gujarat aid

Do political parties actually disburse to victims the large sums of money they collect in the name of calamity relief? Bharatiya Janata Party’s (BJP’s) balance sheets for 2001-06 suggest such public donations end up in party coffers.

The right wing party’s income certificates show it collected Rs2.68 crore as Gujarat Relief Fund. But not even a single paisa was disbursed for the cause. More scandalous is the fact that this escaped the notice of income-tax authorities. Whether or not this is an accounting or printing error or there’s more to it, is a matter for the relevant government authorities to examine.

The BJP is the second richest political party after Congress with a net worth of Rs 102.70 crore in the year 2005-06. The size of the party’s balance sheet in the same year is close to Rs112 crore.

In the name of Gujarat Relief Fund, the party collected Rs1.98 crore in  2001-02, followed by Rs 2,938 in the next financial year. There were no donations shown under this head in 2003-04. In 2004-05 the party again collected Rs43.86 lakh and Rs26.03 lakh in 2005-06.

Such income as received for relief work is disbursed in expenditure certificates under heads like Aid, Relief, donations to other organisations, or any other similar head. Though these donations have been collected for a specific cause and should have been disbursed for that cause only, BJP’s balance sheets, do not even show any expenditure, on heads like donations or aids to others.

Take the Congress party for example. It has shown income in relief funds to the tune of Rs 55.25 lakh from 2001-06. But the party has disbursed Rs 50.31 crore under “aid to others” and another Rs5.04 crore under the head “relief expenses” in their expenditure statements for the same period. The pattern is similar to all other parties.

The tax authorities, which are more concerned with the liability, have not taken any notice of this glaring anomaly in the party’s balance sheets.

What the tax sleuths have taken note off are the losses that the BJP has shown that it incurred every year on sale of its publications. The party was sent a notice in June 2006 to produce its complete books of accounts.

The BJP is the only party, which, as per the Income-Tax Act, is doing “business”. Political parties have exemption for all incomes except Profits Gains from Business and Profession (PGBP), salary (which is not applicable to political parties) and Capital Gains (income under this head is also exempt if the party purchases some listed bonds like the Nabard Capital Gain Bond).

The party has provided internal subsidy to its publications. In spite of subsidy, the party in its ITR of 2001-02 has shown that it incurred a loss of Rs77.73 lakh on account of sale of publications. The next year it shows a loss of Rs86.67 Lakh. In 2003-04, there is further loss of Rs94.59 Lakh. In 2004-05, the party has shown it incurred a loss of Rs2.62 crore and another Rs2.38 crore in 2005-06.

As far as voluntary donations are concerned the BJP is the biggest grosser. The party has collected an amount over Rs269 crore between 2001-02 and 2005-06, as reflected in the Income Tax returns filed by the right wing party. This figure also includes donations of Rs17.43 crore received by the party’s under its Aajiwan Sahayog Nidhi – a scheme for transparent funding, which was launched by the party in the wake of the Hawala scandal in 1997 and reinvigorated after the Tehelka expose. The idea behind the opening of this scheme was “decentralisation of political funding” in order to reduce dependence on big money.

A cursory look at the donations of BJP would reveal that the party’s total donations are much higher than any other political party. The Congress in the same period has declared a collection of Rs81 crore. The Samajwadi Party has declared a collection of Rs90.62 crore. The Communist Party of India (Marxist) has collected Rs84.84 crore as voluntary contributions and contributions for election fund.

BJP’s voluntary donations affidavits submitted to the Election Commission (for four years 2003-04 to 2006-07) shows the biggest funders for the party as the Sterlite Group, Adani, Videocon, Tatas and Birlas, which contributed Rs23.13 crore.

In 2003-04 BJP declared Rs11.69 crore (in donations above Rs20,000) to ECI. The actual donations received by the party that year were Rs72.06 crore. It means the party has collected nearly Rs60.37 crore in donations below Rs20,000.

Similarly, party’s disclosures to ECI in 2004-05 were Rs34.15 crore. Add to this an amount of Rs62.56 crore that the party received in donations below Rs20,000 in the same year.

In 2005-06 the party declared Rs3.61 crore to ECI as voluntary donations. In the same year the party collected Rs26.44 crore in donations below Rs20,000.

As far as income is concerned, 2004-05 was the most productive for the party in which it got Rs104.12 crore. Surprisingly, the next year 2005-06 was the least productive of the five years as the income plummeted to Rs38.33 crore.