JMM seeks probe into donations to unrecognised parties

Ranchi: Jharkhand Mukti Morcha (JMM) leader Vinod Kumar Pandey has called for an investigation into large donations received by registered but unrecognised political parties, citing a recent BBC investigation that examined the finances and political activity of six such parties.

Pandey questioned the Election Commission, Income Tax Department and central investigation agencies over what he described as a lack of scrutiny of political parties that receive hundreds of crores of rupees in donations despite limited electoral activity.

The BBC investigation, published on September 4, examined six registered unrecognised political parties (RUPPs) that received more than ₹100 crore each in donations during 2023-24. The investigation found that the six parties together fielded only 15 candidates in the 2024 Lok Sabha election.

The investigation also reported questions over transparency in the parties’ financial and political activities, while noting that it did not allege that the individuals interviewed were involved in any financial crime.

JMM questions large donations to parties with limited electoral activity

Pandey said the findings raised questions about why parties with little visible political activity were receiving large sums of money.

He referred to the number of registered political parties in India and said most were registered but unrecognised.

According to the BBC investigation, more than 2,800 political parties are registered in India, while 73 have national or state party recognition. The remaining parties fall under the registered unrecognised political party category.

Pandey questioned how parties that contest relatively few elections could receive donations running into hundreds of crores.

The BBC reported that Aam Janmat Party received ₹620 crore in donations in 2023-24, after receiving ₹216 crore in 2022-23. It fielded one candidate in the 2024 Lok Sabha election.

The BBC also reported that Garib Kalyan Party received ₹138 crore and fielded three candidates, while the six parties examined together fielded only 15 candidates in the Lok Sabha election.

Questions over tax benefits and financial transparency

Pandey asked why the Election Commission and Income Tax Department had not taken cognisance of the issue and why agencies such as the Enforcement Directorate and Central Bureau of Investigation had not investigated the matter.

The BBC investigation reported that political parties receive tax exemptions under Indian law and that individual taxpayers can claim tax benefits on eligible donations to political parties. It also cited tax officials who said some RUPPs may not operate like conventional political organisations.

The investigation found that four of the six parties examined had registered offices in the same area of Ahmedabad, while the remaining two were also located in Gujarat.

It also reported that some party representatives described arrangements involving chartered accountants and donors, raising questions about who controlled or managed some of the financial operations.

Pandey raises money laundering concerns

Pandey asked whether the large donations could be linked to money laundering and questioned whether the funds could be used for purposes beyond conventional electoral politics.

He also questioned whether such money could potentially be used in political horse-trading involving elected representatives.

These were questions raised by Pandey and were not established as facts by the BBC investigation.

The BBC investigation itself said its findings and expert analysis raised questions about the functioning and transparency of the parties but did not allege that the individuals it spoke to were involved in financial crimes.

Pandey said the Election Commission, Income Tax Department and investigation agencies should examine the financial transactions, donors and expenditure records of such parties.

The larger question

The issue goes beyond the political allegations raised by the JMM.

The BBC investigation raises a broader question about the relationship between a political party’s electoral activity and the scale of funds it receives.

For example, the six RUPPs examined by the BBC received substantial donations in 2023-24 but together fielded only 15 candidates in the 2024 Lok Sabha election. Their combined income was also higher than that of five of the six national parties, excluding the BJP.

The question now is whether the existing regulatory framework provides sufficient transparency and scrutiny for registered but unrecognised political parties receiving large donations.

Pandey said the relevant authorities must examine the matter and establish where the money came from, how it was spent and whether the transactions complied with the law.