MUMBAI — The Aam Aadmi Party, having shaken up the political order in India by its surprisingly strong showing in the Delhi state assembly elections last month, is also making an attempt to change the way the country’s political campaigns are financed.
When the party first began campaigning in 2012, it promised complete transparency in its finances, creating a website in which the name of the donor is listed, along with the donor’s country of residence, the date and the amount of the donation.
These efforts mark a considerable departure from the murky practices considered the norm in electoral finance in India. “It’s the first time there has been this level of transparency in fund-raising by a political party in India,” said E. Sridharan, academic director at the University of Pennsylvania Institute for the Advanced Study of India in New Delhi, who has written extensively about electoral finance.
The party says that its financial transparency is intended to differentiate Aam Aadmi from the other political parties, which often accept large donations from private enterprises and individual donors. These donors often expect a payback in the form of public sector licenses and favorable regulations.
“It was a very conscious decision on the part of the party that we are not going to resort to the usual funding techniques used by political parties, nor are we going to depend on corporates,” said Ankit Lal, social media and IT administrator for the Aam Aadmi Party.
While Indian law only requires donations above 20,000 rupees to be made public, the Aam Aadmi Party lists the names of those who give as little as 100 rupees. Also, political parties need to submit their accounts only annually to the Election Commission, but the Aam Aadmi Party has already published their reports of donations on its website.
The party has raised 49.5 million rupees, or $794,000, as of Tuesday since its victory in the Delhi state elections in early December. Before the Delhi state elections, the party received an average of 500,000 rupees a day, but currently it is drawing 1.5 million to 2 million rupees a day.
For the Delhi elections, over 70,000 individuals donated, of which 55,000 gave 10,000 rupees or less, said Mr. Lal. Nearly 60 percent of the total amount was donated online, where the party has spent much of its fund-raising efforts.
Parties can receive an unlimited amount of donations, but for the state elections in December, the party stopped accepting donations on Nov. 17, after it reached its fund-raising goal of 200 million rupees. “We set a campaign cap because we didn’t want to take more money than we needed,” said Mr. Lal.
Though the 1-year-old party has found success in fund-raising, the amounts it has received are still small compared what the more established parties have raised in the past. A study by the Association for Democratic Reforms showed that in the 2011-12 financial year, which begins in April, the Congress Party had a total reported income of 3.07 billion rupees and the Bharatiya Janata Party, or B.J.P., had 1.7 billion rupees.
However, the Aam Aadmi Party is willing to reject money if the source doesn’t meet its standards for transparency and honesty. It has turned down donations from certain companies that it deemed as having a less-than-clean track record or from donors whose nationality could not be established. Indians living abroad, also known as nonresident Indians, are allowed to donate to political campaigns in India, but foreign nationals are not.
According to the Aam Aadmi Party website, the United States has the highest number of nonresident Indian donors as of Tuesday, followed by the United Arab Emirates, Britain, Singapore and Canada. While the average Indian resident donates about 500 rupees, overseas Indians gives an average of 2,000 rupees to the campaign, said Mr. Lal.
When India’s Home Ministry ordered an inquiry into allegations of foreign donations to the party in November, the party welcomed the investigation and called on the government to look into each party’s sources of funding. (The inquiry is still pending.)
“Political parties have always received money from outside the country,” said Mr. Sridharan. “Some of this money is also being sent out and then being brought back in a round trip through Mauritius. There is money, which is corrupt money, that is taken out of the country to Swiss banks, Mauritius or the Cayman Islands, and being brought back during elections.”
In an attempt to encourage traceable contributions, political parties receive tax breaks on the condition that they file audited financial statements.
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