Bhubaneshwar: Along with providing details of income and expenditure during a financial year, a political party is also required to declare details of their assets and liabilities as part of their audit reports, a copy of which is uploaded on the website of the Election Commission of India (ECI) for public consumption. Based on the information on Biju Janata Dal (BJD) available with Association for Democratic Reforms (ADR) between FY 2005-06 and 2015-16, it is seen that the assets of the party increased from Rs 24 lakhs during FY 2005-06 to Rs 18.77 cr during FY 2015-16 and the liabilities of BJD increased from Rs 20,000during FY 2005-06 to Rs 20.6 lakhs during FY 2015-16.
Balance sheet contains information on three main financial aspects of the entity, which is a political party in this case. i) The “Assets” of the party are resources such as cash, their bank investments, moveable and immovable properties, vehicles, etc.; ii) The “Capital” or “Reserve Fund” portion of the balance sheet is the accumulated wealth of the political party which is essentially assets minus any liabilities of the party; iii) The “Liabilities” of a political party includes borrowings from banks, unsecured loans, access to overdraft facilities, etc. The accounting standards were created keeping in mind the nature of activities of the entities, be it commercial, industrial or business. While political parties do not perform any commercial activities, the purpose of the accounting standard i.e. maintain uniformity in presentation, is kept intact by merely modifying the terminology such as “Income and Expenditure” in place of “Profit and Loss”.
Declaration of assets by the BJD – FY 2005-06 to 2015-16
Despite filing multiple RTI applications with the Income Tax department responsible for collecting audit report of BJD for FY 2006-07 to 09-10 and FY 2011-12 to 12-13 (6 years), the department has declined to provide the information in spite of the Central Information Commission (CIC) directing them to make the data available to ADR. This report is based on the IT Returns of BJD for 5 years which are available with the ECI for the 11 years between FY 2005-06 and 2015-16. Based on the information available, it is seen that BJD has declared an increase in overall assets of the party by 7,721% between FY 2005-06 and 2015-16 while declaring an overall increase in liabilities of the party by 10,200% between FY 2005-06 and 2015-16.
The assets declared by BJD fall under 6 major heads: fixed assets, loans & advances, FDR/ deposits, TDS, Investments and other assets. During FY 2005-06, BJD declared maximum assets under Other Assets which amounted to Rs 23.8 lakhs. This constituted 99% of total assets declared by the party under various heads. During FY 2015-16, the highest asset category is FDR/ Deposits under which BJD has declared holding Rs 16 cr which forms 85%of the total assets declared under various heads by the party.
It is to be noted that the party has not declared holding any assets under the categories of loans & advances, TDS and investments based on the data available in the public domain.
| Assets of BijuJanata Dal (BJD) between FY 2005-06 and 2015-16 (Rs in crores) | |||||||
| Financial Year | Fixed Assets | Loans and Advance | FDR/Deposits | TDS | Investments | Others Assets | Total Assets |
| 2005-06 | 0.003 | 0.00 | 0.00 | 0.00 | 0 | 0.238 | Rs 0.24 cr |
| 2010-11 | 0.009 | 0 | 0 | 0 | 0 | 3.163 | Rs 3.17 cr |
| 2013-14 | 0.009 | 0 | 0 | 0 | 0 | 9.25 | Rs 9.26 cr |
| 2014-15 | 0.008 | 0 | 16.00 | 0 | 0 | 1.99 | Rs 17.998 cr |
| 2015-16 | 0.007 | 0 | 16.00 | 0 | 0 | 2.76 | Rs 18.77 cr |
Declaration of liabilities by the BJD – FY 2005-06 to 2015-16
The liabilities declared by BJD fall under 2 major heads: borrowings (from banks, overdraft facilities and sundry creditors) and other liabilities. It is to be noted that BJD has declared nil liabilities under “borrowings” for all years for which data is available in public domain. During FY 2005-06, the Regional Party of Odisha declared liabilities of Rs 20,000 under “other liabilities” while during FY 2015-16, the party declared “other liabilities” of Rs 20.6 lakhs.
| Liabilities of BijuJanata Dal (BJD) between FY 2005-06 and 2015-16 (Rs in crores) | |||
| Financial Year | Borrowings (Banks, Overdraft and sundry Creditors) | Other Liabilities | Total Liabilities |
| 2005-06 | 0 | 0.002 | 0.24 |
| 2010-11 | 0 | 0.005 | 3.17 |
| 2013-14 | 0 | 0.587 | 9.26 |
| 2014-15 | 0 | 0.0064 | 17.998 |
| 2015-16 | 0 | 0.206 | 18.77 |
Capital declared by BJD – FY 2005-06 to 2015-16
The total Capital/ Reserve fund set aside by BJD during FY 2005-06was Rs 23.9 lakhs, and Rs 18.564 cr for FY 2015-16.Thus, the reserve funds of BJD, between FY 2005-06 and 2015-16 increased by 7,667%.
| General/Reserve Fund of Biju Janata Dal- BJD | |
| Financial Year | General/Reserve Fund (Rs in cr) |
| 2005-06 | 0.239 |
| 2010-11 | 3.167 |
| 2013-14 | 8.673 |
| 2014-15 | 17.992 |
| 2015-16 | 18.564 |
ASSETS CHANGE FROM FY 2005-06 TO 2015-16 of National Political Parties and Regional Party –BJD –A COMPARISION
N.B- (Asset analysis of National Parties released earlier by ADR and National Election Watch)
Recommendations of ADR
To ensure that there is financial transparency and accountability on the part of the political parties, there must be a strict mechanism with respect to reporting of financial information. The standardized procedures and reporting framework recommended by the Institute of Chartered Accounts of India (ICAI) on the request of Election Commission of India (ECI) must be followed so as to ensure that a true picture of the financial position of the political parties is revealed to the general public. ADR feels that there is a dire need for these recommendations to be implemented at the earliest.
- As the income-expenditure statements of political parties are assessed rarely (even those of National Parties), 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 by CBDT/ CAG nominated audit team of the documents submitted by political parties is recommended.
- The 170th Law Commission report recommended introduction of Section 78A in the RPA and proposed penalties for political parties defaulting in the maintenance of accounts. This needs to be introduced and implemented.
- Section 276CC of the IT Act 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.
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