At a meeting of its state and central level leaders this week, the Congress finalised plans for a 40-day mass outreach programme to seek donations for the party. The party believes that by doing this it is going back to its old system of resource mobilisation, when crowd-funding was an important source of financing election expenses. The move, however, is as likely to be a result of the drying up of corporate funding as it is of a rediscovered enthusiasm for grass-roots fund mobilisation.
Election and political party watchdog Association for Democratic Reforms (ADR) last month released its report on donations received by 31 regional parties in 2016-17. Earlier this year, it released details of donations received by national parties for the same year. A comparison of these reports highlights the difficulty the Congress has been facing in raising funds after it lost power to the Bharatiya Janata Party (BJP) in the 2014 Lok Sabha elections. The Congress has received less in donations than the Shiv Sena (SHS) and the Aam Aadmi Party (AAP), two regional parties, collectively received in both 2015-16 and 2016-17. (See chart 1)
ADR’s website www.myneta.info has details of donations received and incomes of political parties since 2001-02. HT has scraped this information to make long-term comparisons of these figures. The BJP and the Congress were almost equally placed in terms of donations received between 2004-05 and 2008-09, when the first United Progressive Alliance (UPA) government was in power. Donations to the BJP were more than twice what the Congress got during the years when UPA II was in power. In the first three years of the Narendra Modi government (ADR only has data till 2016-17), donations to the BJP have risen to more than five times what the Congress got.
In fact, the Congress’s overall share in total donations received by all political parties fell to an all-time low in 2015-16 and even more in 2016-17. (See chart 2)
To be sure, the ADR database has information for a small number of regional parties in the earlier period. However, this database is the only consolidated and publicly available source of donations received by political parties in India.
It needs to be underlined that donations are not the only source of income for political parties. In fact, it is hazardous to draw a one-to-one relation between donations received by a political party and its total income. While total donations received by the Congress in 2016-17 were less than what the Shiv Sena and the AAP got together, its total income was more than 3.5 times the income of these two regional parties. Even among the regional parties, the Samajwadi Party reported the highest income in 2016-17, even though it was ranked fourth in terms of donations received.
The Congress retaining second position in terms of income does not tell us anything about the widening of the gap between its incomes and the BJP’s. Between 2013-14 and 2016-17, the BJP has quadrupled its lead over the Congress in terms of income. The Congress’s share in total income of all political parties went below 30% for the first time in 2014-15 and has been falling continuously since then. (See chart 3)
Bloomberg in May 2018 reported that the Congress had stopped sending funds to maintain its party offices in various states due to a shortage of funds. With elections getting more expensive in India, a cash crunch is bound to have an adverse impact on the Congress’s ability to challenge the BJP in the 2019 elections. To be sure, election spending and poll performance need not have a one-to-one relationship. According to the expenditure reports submitted to the Election Commission by the two parties, the BJP spent only about 1.5 times more money than the Congress during the 2014 Lok Sabha elections, yet it won 6.4 times more seats.