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BJP party gains handsomely in asset growth in 2017-18, says ADR

Reflecting the largess received through donations from businessmen, industrial houses and well wishers, assets of the Bharatiya Janata Party (BJP), increased the most among all national political parties in the country, a study conducted by Association for Democratic Rights (ADR) revealed

recently.

During 2017-18, the the ruling party’s declared assets increased 22.3 per cent to Rs 1483.3 crore from Rs 1213.13 crore in  2016-17.  The total assets of AITC during the year increased 10.8 per cent from Rs 26.25 crore  in 2016-17 to Rs 29.10 crore, while assets of the BSP and the CPM increased five per cent and 3.9 per cent respectively. On the other hand, the Congress (INC) and the NCP both suffered depreciation in wealth by disclosing decrease in their annual declared assets.

In fact the total assets of INC between 2016-17 and 2017-18 decreased by 15.3 per cent from Rs 854.75 crore to Rs 724.35 crore and that of NCP decreased 16.4 per cent from Rs 11.41 crore to Rs 9.54 crore.

National election watchdog body, ADR analysed the assets and liabilities declared by the seven national parties, viz. the BJP, INC, NCP, BSP, CPI, CPM and AITC during 2017-18. The analysis revealed that, while the BJP party registered handsome gains in assets during the year, its liabilities stood at modest Rs 20 crore. Interestingly the liabilities of the INC was Rs 476.7 crore in 2017-18.

ADR in its analysis said that, national parties failed to adhere to the ICAI guidelines that direct parties to declare details of the financial institutions, banks or agencies from whom loans were taken. The guidelines specify that the parties should state the “terms of repayment of term loans” on the basis of due date such as a year, 1-5 years or payable after five years.

The ADR is said that, details of fixed assets received as donation by the parties should be declared such as original cost of the asset, any additions or deductions, depreciation written off, cost of construction, etc. The same should also be declared of fixed assets purchased by the political parties.

To bring about transparency in the balance sheet of political parties the ADR is suggested changing of auditors every three years as  once a auditing firm is responsible for auditing of accounts of parties for long duration, there is a possibility that finances of parties could be made as opaque as possible.

“Indian laws do not permit foreign auditing firms to operate directly in India but might have a tie-up with domestic auditing firms. This becomes a worrisome factor if the domestic firm is auditing Indian parties’ accounts. By having no provision to change auditors frequently, foreign companies might have a bird’s eye view of the parties’ internal accounting,” said ADR.

The watchdog body recommended that, accounts of political parties should be audited by a qualified and practicing chartered accountant from a panel of such accountants maintained for the purpose by the Comptroller and Auditor General. This differs from the current practice where political parties choose their auditors entirely on their own.

“As the income-expenditure statements of political parties are assessed rarely  authenticity of the accounts submitted remains doubtful. When the authenticity is not verified, the auditors who might be under-reporting the accounts, remain out of purview of punishment. With online submission of IT returns, political parties do not submit details of income, expenditure and assets and liabilities as attachments. Thus, the IT department too does not have enough information on the finances of political parties. Annual scrutiny of documents submitted by political parties is necessary,” recommended ADR.

The watchdog is also asked for introduction of section 78A in the Representation of the People Act, 1951 and proposed penalties for political parties defaulting in the maintenance of accounts. Another suggestion to clean up balance sheets of political parties is to implement section 276CC of the IT Act that penalizes individuals who fail to submit their IT returns.

“Similar legal provisions should be applicable to political parties too. Supreme Court judgement in Common Cause vs. Union of India & ors. had stated that when parties default in filing their returns, prima facie they violate provision of IT Act. For both 2016-17 and 2017-18, the BJP, INC, CPI & NCP delayed the submission of their audit reports,” disclosed ADR.

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