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Analysis of Funds Collected and Expenditure Incurred by Political Parties: Karnataka Assembly Election, 2018

· Political parties are required to submit a statement of election expenditure to the Election Commission within 75 days of completion of Assembly Elections.

· The expenditure statement contains details of the total amount received as funds in the form of cash, cheques and demand drafts and the total amount spent under various heads.

· The expenditure statement contains information on the amount spent on the following heads at the central, state, district andconstituency levels by the party:

o Publicity

o Travel expenses

o Other expenses

o Expenditure towards candidates

· Political parties submit these statements providing information of funds collected and spent between announcement and completion of elections. This period could be between 3 weeks to 3 months based on the notification issued by the Election Commission.

· This report analyses the funds received and expenditure incurred by recognized political parties, during the state Assembly election to Karnataka, held in the month of May, 2018.

· 6 National Parties and 7 Regional Parties have been considered for analysis in this report.

· Election expenditure statements of JD(S), SHS, and JD(U) for Karnataka Assembly Election are unavailable on the website of the ECI.

Details provided in the Election Expenditure Statement

Funds Collected and Expenditure incurred by political parties

· Total funds collected by 8 political parties during Karnataka Assembly Election held in 2018 was Rs 356.04 cr and total expenditure incurred was Rs 170.16 cr.

· BSP and AIFB had not declared any funds collected at the Central Headquarters and State Units during Karnataka Assembly Election, 2018.

· Funds collected by the parties at the Central Headquarters was Rs 269.94 cr and expenditure was Rs 112.144 cr. Karnataka State Unitsspent Rs 58.014 cr.

Graph: Total funds collected and expenditure incurred by political parties during Karnataka Assembly Election, 2018

Graph: Funds collected and expenditure incurred by political parties (less JDS) from Central Headquarters and State Units during Karnataka Assembly Election, 2018

Expenditure incurred by political parties under various heads

· Political parties declare their expenditure under the heads of Publicity, Travel Expenses, Other/ Miscellaneous expenses andLumpsum amount paid to their contesting candidates.

· Political Parties that contested in Karnataka Assembly Election, 2018, spent the highest, Rs 129.72 cr on Publicity, followed by Rs 30.06 cr on travel expenses, Rs 17.84 cr on Lumpsum amount paid to candidates and Rs 9.63 cr on Other/Miscellaneous expenses.

· Expenditure on publicity is 69.28% of the overall expenditure declared under various heads.

· Expenditure on travel expenses is 16.05% of the overall expenditure declared under various heads.

Graph Expenditure incurred by political parties (less JDS) under various heads during Karnataka Assembly Election, 2018

Expenditure on Travel by political parties

· The ‘Travel’ head is segregated into travel expenses incurred specifically on star campaigners and that of the party leaders.

· Political parties spent 92.68% of their total travel expenses or Rs 27.86 cr on their star campaigners and the remaining 7.32% or Rs 2.20 cr on travel of their party leaders.

· Travel expenses from Central Headquarters by itself was Rs 17.52 cr or 58.28%, which was higher than Rs 12.54 cr or 41.72% spent fromKarnataka State Units.

Graph: Expenditure incurred on Travel by political parties during Karnataka Assembly Election, 2018

Observations of ADR

· The election expenditure statement of JDS is not yet available in the public domain despite contesting in Karnataka Assembly Election 2018 and emerging as the ruling party in the state.

· AIFB has not mentioned any funds collected and expenditure incurred from it Central Headquarter and State Unit in spite of contesting elections. NCP and AIADMK collected funds from the Central Headquarters and State Units respectively but have not shown any expenditure incurred in their statements.

· The expenditure statement of CPI does not provide any information about the breakup of general party propaganda expenses incurred by party headquarter.

Recommendations of ADR

· It must be made mandatory for all political parties to submit their statements of expenditure in the format given by the ECI, within the prescribed time limit. Political parties not submitting on time or in the prescribed format should be heavily penalized.

· The details of all donors who contribute to national and regional parties exclusively for their election campaigns must be declared in the public domain irrespective of the amount donated.

· A format similar to the donations report along with the date of donations, submitted to the ECI on an annual basis, has to be prescribed for the expenditure statement so as to bring in more transparency in the finances of the political parties especially during elections when it is said that black money plays a major role.

· Where possible, the expenditure must be limited to transactions via cheque/DD/RTGS so as to reduce the use of black money in elections, as per the transparency guidelines issued by the ECI.

· Similar to the shadow observers of the ECI for monitoring expenditure of candidates, there must also be observers for monitoring the expenditure of political parties.