The Association for Democratic Reforms (ADR) on Thursday said the union budget failed to address the issues of transparency, disclosure and penalties of political parties.
It also claimed the proposals on political funding reforms fell short of the recommendations by the Election Commission and the Law Commission.
Commenting on the budget presented by Finance Minister Arun Jaitley, the ADR also found flaws in the proposal of lowering the limit for anonymous cash donations from Rs 20,000 to Rs 2,000.
"The budget, while promising transparency and accountability in political funding, does not answer questions on how it would be implemented at the ground level nor has it promised implementation of related reforms proposed by the Election Commission and the Law Commission of India," said the ADR.
"While this is the first union budget to raise the issue of transparency in political funding, it is unfortunate to note that complete transparency in the finances of political parties has still not been adopted in the budget of 2017-18 and the proposed reforms are inconsequential as the political funding will continue to remain opaque," it said.
It said the proposal to limit cash donations to Rs 2,000 was flawed on three counts of accountability, disclosure and political will.
"Unless scrutiny of accounts of political parties is taken up by a body approved by Comptroller and Auditor General or the Election Commission, the parties' declared income is unlikely to reflect their true income," the ADR said, pointing to the budget not promising scrutiny of income declared by political parties from various sources.
"The budget does not propose that the details of all donors who donate above Rs 2,000 be made available to the Income Tax department and/or an external body auditing the accounts of political parties," it said.
"Unless complete information is available for audit scrutiny, the sources of donations below Rs 20,000 to political parties will continue to stay hidden," it contended.
Referring to the budget proposals of political parties entitled to receive donations in cheque or digital mode as also the mandate to file their return of income within the prescribed time, the ADR said legal provision to the effect, were already in place.
"The legal provisions were already in place, re-iterating an already existing rule of law does not add anything new to the proposed electoral reforms.
"This only shows a lack of political will," said the organisation which aims at bringing transparency and accountability in Indian politics.
The ADR also said the ruling Bharatiya Janata Party (BJP) topped the chart in defaulting in submitting its audit reports to the poll panel.
Between 2010-11 and 2014-15, BJP defaulted in the submission of its audit report with the Election Commission by an average of 182 days while the Congress defaulted by 166 days on average.
The Nationalist Congress Party (NCP) defaulted in filing its audit report for an average of 87 days while the Samajwadi Party defaulted by 42 days, it said.
"For complete transparency, apart from digitisation of donations, the Government should also take immediate steps to implement other electoral and political reforms proposed by the Election Commission and the Law Commission," said ADR, adding the parties must also provide all information on their finances under the Right to Information Act.