Rs 1,500 cr in donations, 15 candidates: The curious case of six Gujarat parties

Six registered but unrecognised political parties, all headquartered in Gujarat, received more than Rs 1,500 crore in donations in 2022-23, exceeding the combined donations received by all national parties except the BJP, according to an investigation by BBC Hindi.

The six parties — Satyavadi Rakshak Party, Aam Janmat Party, Gareeb Kalyan Party, Swatantrata Avivyakti Party, Bharatiya National Janata Dal and New India United Party — are headquartered in Gujarat, five in Ahmedabad and one in Anand.

The BBC investigation by Shubhangi Mishra found that all six parties had fielded a combined 15 candidates in the 2024 Lok Sabha elections, despite receiving donations ranging from Rs 138 crore to Rs 620 crore in 2022-23.

The Aam Janmat Party was the biggest recipient, receiving Rs 620 crore, while the Gareeb Kalyan Party received the least among the six, at Rs 138 crore. The Satyavadi Rakshak Party received Rs 330 crore and the New India United Party Rs 200 crore.

The law allows registered political parties to receive donations, with contributions eligible for tax exemptions for both donors and political parties. The BBC investigation does not allege any illegality in the donations. It does, however, report that the income tax department has examined some of the contributions and recovered part of the money as tax from some donors.

Chartered accountants told the BBC that one possible mechanism involves donors obtaining donation certificates to claim income-tax relief and subsequently receiving much of the money back from the political parties after deductions described as ‘service charges’.

The investigation found little evidence of substantial activity at the registered offices of the six parties. The BBC team traced their official addresses to residential flats and shops in commercial complexes, many of which were found shut.

Swati Ben, president of the Satyavadi Rakshak Party, who lives in another flat in the same residential complex in Anand as the party’s registered office, told the BBC that the party had spent its donations on charity but kept no records of the expenditure.

The investigation does not establish whether donations to the parties dried up after 2022-23. If so, their continued existence on paper could raise questions about whether another round of substantial donations could emerge ahead of the next electoral cycle.

Parties with little electoral footprint

The Satyavadi Rakshak Party, according to the report, fielded just one candidate in the 2024 Lok Sabha election and claimed to have spent Rs 8 crore on campaigning. The party had received Rs 330 crore in donations the previous year and claimed to have spent Rs 316 crore on charity.

There are around 2,800 political parties registered with the Election Commission of India (ECI), but only 73 are recognised by the poll panel. Six are recognised as national parties — the BJP, Congress, AAP, BSP, CPI(M) and NPP — while the rest are recognised as state parties.

All registered parties are required to have their accounts audited and file annual returns with the ECI, including details of donors who contribute more than Rs 20,000.

The BBC investigation focused on the six unrecognised parties that received the highest donations in 2022-23.

The ECI has deregistered more than 800 unrecognised parties for failing to contest elections or field a single candidate. The six Gujarat-based parties, which collectively fielded 15 candidates in the 2024 Lok Sabha polls, therefore had an electoral presence despite their limited political footprint.