REGISTERED UNRECOGNISED POLITICAL PARTIES (RUPPs) IN INDIA

REGISTERED UNRECOGNISED POLITICAL PARTIES (RUPPs) IN INDIA
Why in News?
An investigation found that six Registered Unrecognised Political Parties (RUPPs) based in Gujarat received around ₹1,700 crore in donations in 2023–24, highlighting concerns over transparency, tax exemptions and regulatory oversight.
What are Registered Unrecognised Political Parties?
•    Registered Unrecognised Political Parties (RUPPs) are political parties that are registered with the Election Commission of India (ECI) but do not have the status of a recognised national or State party.
•    Political parties can be formed by citizens as an association or body of individuals and can seek registration with the ECI.
•    Section 29A of the Representation of the People Act, 1951 provides the framework for registration of political parties.
•    After examining the documents submitted by a party, the ECI registers it as a political party if the prescribed requirements are satisfied.
•    Registration gives such parties certain electoral and financial benefits, even though they have not acquired recognition as a national or State party.
What Benefits Do RUPPs Receive?
Registered parties enjoy several benefits, including:
•    Tax exemption: Donations received by eligible political parties can receive tax exemption under the relevant provisions of the Income Tax law.
•    Common symbol: RUPPs can obtain a common symbol for contesting Lok Sabha and State Assembly elections, subject to the applicable conditions.
•    Star campaigners: A registered party can have up to 20 star campaigners during an election campaign.
•    These benefits make registration valuable even for parties that have limited electoral presence or support.
What Financial Disclosure Requirements Apply?
•    RUPPs are required to maintain details of individual donors contributing more than ₹20,000 in a financial year.
•    These details have to be submitted to the ECI annually.
•    Under Section 29C of the Representation of the People Act, failure to furnish the required contribution reports can result in the loss of income-tax exemption.
•    Donations exceeding ₹2,000 are required to be received through cheque or bank transfer, rather than cash.
•    These requirements are intended to improve financial transparency and traceability of political donations.
The Scale of the RUPP Issue
•    India had more than 2,800 RUPPs as of July, according to the ECI notification referred to in the material.
•    However, only around 750 RUPPs contested the 2024 Lok Sabha elections.
•    This large gap has led to the description “letter pad parties” for parties that remain registered but have little or no meaningful electoral activity.
•    The concern is not simply the existence of small political parties, but whether some entities use political-party registration primarily to access tax exemptions and other benefits without meaningful political participation.
Why are “Letter Pad Parties” a Concern?
•    A large number of registered parties do not regularly contest elections or demonstrate significant electoral activity.
•    Weak compliance with reporting requirements can make it difficult to assess their financial activities and sources of funding.
•    According to the ADR report cited in the material, annual reports of only 26% of RUPPs were available in the public domain for the period analysed.
•    Such limited public disclosure can create opportunities for political-party registration to be misused as an opaque channel for financial transactions.
•    It is possible that a few of these entities could potentially be used for tax evasion or money laundering.
Why Can't the ECI Simply De-register Them?
•    The Representation of the People Act does not explicitly give the ECI a general power to de-register a political party merely because it fails to contest elections, does not conduct inner-party elections or fails to file required returns.
•    In Indian National Congress v. Institute of Social Welfare & Others (2002), the Supreme Court held that the ECI does not possess a general power of de-registration under the RP Act.
•    The Court recognised only exceptional circumstances in which de-registration could take place.
•    These include situations such as registration obtained through fraud, a party ceasing to have allegiance to the Constitution, or the party being declared unlawful by the government.
•    Therefore, the ECI cannot simply remove every inactive RUPP from the register because it has stopped contesting elections.
What has the ECI Done?
•    The ECI periodically publishes lists of de-listed RUPPs.
•    The October 2025 notification referred to in the material contained more than 800 such parties.
•    However, the six Gujarat-based parties highlighted in the investigation remained on the list of active RUPPs.
•    They remained active because they had collectively fielded 15 candidates in the 2024 Lok Sabha elections.
•    This illustrates a regulatory difficulty: merely contesting an election may allow a party to retain its registered status even if its broader political activity is limited.
The Six Gujarat-Based RUPPs in the News
The six parties identified in the investigation were:
•    Aam Janmat Party
•    Bharatiya National Janata Dal
•    Garib Kalyan Party
•    New India United Party
•    Satyawadi Rakshak Party
•    Swatantrata Abhivyakti Party
Together, they reportedly received around ₹1,700 crore in donations during 2023–24, highlighting the scale of financial activity that can exist even among parties without national or State recognition.
What Reforms Have Been Suggested?
Law Commission
•    The Law Commission's 255th Report recommended allowing de-registration of a political party if it fails to contest elections for ten consecutive years.
Election Commission
•    The ECI's 2016 memorandum on electoral reforms also recommended amending the Representation of the People Act to give it the power to de-register political parties in appropriate circumstances.
Financial Monitoring
•    Income Tax authorities and other enforcement agencies can use digital financial records and transaction monitoring to identify suspicious financial activity.
•    Strict action against wrongdoing could create a deterrent against misuse of political-party exemptions.