Context
Recently, concerns have arisen over opaque funding and poor statutory compliance by Registered Unrecognised Political Parties (RUPPs), with reports of unusually large donations to some such parties. This has renewed debate over strengthening the Election Commission of India’s (ECI) powers and linking tax benefits to electoral performance.
Explanation
- Political parties are registered with the ECI under Section 29A of the Representation of the People Act, 1951.
- RUPPs are registered parties that have not fulfilled the electoral-performance criteria for recognition as a State or National Party.
- Registration provides benefits such as income-tax exemption, acceptance of political contributions and access to a common election symbol, subject to applicable conditions.
- RUPPs must comply with requirements relating to annual audited accounts, contribution reports and election-expenditure statements.
- The ECI has limited statutory power to deregister parties merely for non-contestation or non-compliance; exceptional grounds include fraudulent registration.
- Reforms proposed include stronger ECI deregistration powers, stricter financial disclosure and linking tax exemptions to a reasonable vote-share/electoral-performance threshold.
- Such measures can curb shell parties, tax evasion and money laundering while improving electoral transparency.
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