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    Sunday, 27 May 2018

    Is India's Congress party really running out of cash ?

    India’s main opposition Congress party is facing a financial crisis that could undermine its ability to wrest power from Prime Minister Narendra Modi’s wealthy Bharatiya Janata Party in 2019.
    For the past five months, Congress leadership has stopped sending the funds required to run its offices in various states, party officials with knowledge of the matter said, asking not to be identified as they were not authorized to speak to the media. To overcome the crisis, Congress has urged members to step up contributions and asked officials to cut expenses, they said.Led by Rahul Gandhi, the party’s steady flow of money from industrialists has all but dried up, leaving a cash crunch so serious that it’s been forced to crowd-fund for a candidate.

    “We don’t have money," said Divya Spandana, who leads the Congress Party’s social media department. Compared with the BJP, she said her party is not getting much funding via electoral bonds -- a new method for cash donation to political parties -- which may force Congress to opt for more online crowd sourcing to raise money.

    Modi’s string of electoral wins engineered along with his key aide and party president Amit Shah have decimated the space once occupied by the Congress Party. At last count, BJP rules with its allies in 20 states, several of them wrested from the grand old party, and Modi remains the most popular leader ahead of next year’s federal elections.
    India’s oldest political party, the Congress - which has ruled the country for 49 of its 71 years as an independent nation - has made a public appeal for funds on Twitter, perhaps for the first time in its 133-year history.
    That is surprising for India’s main opposition party. Founded in 1885 by elite intellectuals to challenge British colonial rule, it eventually morphed into a political movement with massive grassroots support and seemingly limitless coffers.
    The party’s official twitter handle invited people on Thursday to make a “small contribution”. The tweet received mixed reactions. Many obliged and then retweeted the appeal. But several others seemed either outraged or amused at the request. They found it hard to believe that India’s “grand old party” was short of funds.
    So is this is an attempt by the party to position itself as a transparent organisation funded by supporters, or it it truly facing a financial crunch?
    How much money does the Congress have?
    “We don’t have money,” Divya Spandana, the head of Congress’ social media presence, is quoted as saying in Bloomberg.
    According to election watchdog Association For Democratic Reforms (ADR), the Congress had an income of $33m (£24.7m) in 2017.
    While this may not seem like a small amount, it’s far lesser than what was declared by the ruling Bharatiya Janata Party (BJP), which is the richest with an income of $151.5m.
    The Congress is still India’s second richest party, but its income in 2017 shows a decrease by $5.3m. The BJP’s income, on the other hand, had more than doubled from what it earned in 2016.
    The income declared by the parties is drawn from donations, fees paid by party members as well as interest earned on savings and others financial schemes. But the question is, do they have other sources of income?
    Although political parties are required to declare their income, their finances are far from transparent.
    A 2017 report by ADR had found that a whopping 69% of parties’ income still came from unknown sources. Then there is the money that does not make it to any official record - elections in India are routinely accompanied by allegations of “illicit money” or “black money”, which takes the form of unaccounted cash.
    So how would a party “go broke”?
    Elections in India are expensive. Candidates in the 2014 election spent a total of $5bn, according to one estimate. Compare this to the US election in 2012 which is believed to have cost around $6bn.
    So, the longer a party stays out of power, the fewer the opportunities to raise money. And analysts believe that the Congress’ finances reflect its political fortunes.
    It won less than 20% of the popular vote in the 2014 parliamentary election, securing just 44 - or 8% - of the 543 parliamentary seats in its worst poll performance ever. The Congress is now in power in only two big states - Karnataka and Punjab - and two smaller ones.
    The BJP and its allies are in power in 22 of India’s 29 states.
    Will this hurt the Congress in upcoming national election?
    “A good public stunt,” is how Vipul Mudgal, a trustee at ADR, described the Congress’ appeal for donations.
    He says its a “smart move” by the Congress to cast itself as a clean party that is not receiving sufficient contributions from corporate companies and other rich donors. The Congress government was accused in a series of high-profile scams 
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