Registered Unrecognised Political Parties (RUPPs)

GS-II – Polity | Electoral Reforms

• Donations received by RUPPs: An investigation by ‘BBC News Hindi’ found that six RUPPs, all located in Gujarat, saw donations of close to ₹1,700 crores in 2023-24.
• Comparison: During the same period, five nationally recognised political parties — all except the BJP – had received a total of ₹1,480 crores.

What are registered parties?

• Nature: Political parties are a truly formed association or body of citizens. Section 29A of the RP Act provides Registration of a Political Party with Election Commission (EC).
• Registration of a RUPP: Following scrutiny and if satisfied with the papers filed, you are registered as a RUPP.
•  Benefits to RUPPs — exemption from tax for receiving donations under Section 12 of the income Tax Act, 2025; a single symbol when contesting general elections to the Lok Sabha/State Assemblies and up to 20 star campaigners during an election campaign.
•  Donor details:The particulars of individual donors donating above ₹20,000 in a financial year must be preserved by the RUPPs and reported to the poll body every year.
• Failure to furnish details: As per Section 29C of the Representation of the People Act, failure to furnish these details will result in losing income tax exemption.
•  Mode of donations: As part of the 2025 Income Tax Act, no RUPPS can receive in-kind or cash donations over ₹2,000. Instead, such entities are required to only accept cheque and bank transfer payments for all amounts above this threshold.

Issues

• Letter pad parties: While the EC had more than 2,800 RUPPs, till July this year target for mega scam was curbed with only about 750 contesting general elections to be held in 2024. Hence the name — ‘letter pad parties’ for the remaining RUPPs.
• Less EC power: The RP Act does not give the EC an express power to deregister a political party failing to either contest elections or conduct inner-party elections, lodge necessary returns.
• SC ruling : The Supreme Court had, in Indian National Congress vs Institute of Social Welfare & Ors (2002), ruled that for the purposes of deregistering political parties under the RP Act no power was conferred on the EC.
•   Exceptional de-registration: Only in rare circumstances could the EC cancel a registration, for example where the registration had reportedly been obtained by fraud, where the political party no longer professed faith in the Constitution or if it was declared unlawful under an Act passed by the government.
•    De-listed RUPPs: The EC periodically publishes the list of de-listed RUPPs. The October 2025 notification contains over 800 such parties.
•  Reason: These six parties managed to field a total of 15 candidates during the 2024 Lok Sabha elections.
•   Lack of transparency: Only 26% of annual reports of RUPPs are publicly available according to a July 2025 report by the Association for Democratic Reforms based on analysis of the 2022-23 annual reports of these outfits which it referred to as registered unrecognised political parties (RUPPs).
•    Risk of abuse: Poor adherence to statutory norms, with little transparency makes these ‘letter pad’ parties vulnerable for tax evasion and money laundering by operating as a non-transparent conduit.

What needs to be done?

•   Law Commission recommendation: In the 255th report of the Law Commission, de-registration of a political party after it does not contest elections for ten years on a continuous basis was recommended.
• EC recommendation: In the memorandum to bring in an electoral reform (2016), EC had recommended amendment of RP Act that would allow it to de-register a party
•   Long-pending reforms: These reforms need to be carried out to empower the EC to act against non-serious parties, some of which are merely a façade for illegal financial transactions.
• Avoid token participation: Merely fielding candidates should not be enough to retain all benefits if the party has no meaningful electoral presence.
•  Transaction monitoring: In 2023 Digital India world, keeping a record of such parties’ transactions is not a problem for the Income Tax Department and other enforcement agencies, and if needed, they take legal action against the offenders.
• Deterrence: This would send a strong message and deter misuse of the benefits/exemptions available to political parties.
•  Concern over proposal: This can be viewed as an undemocratic and extreme measure, as there are parties that consistently contest elections without electoral success.
•  Other threshold: Like the 1% vote barrier for granting common symbols to RUPPs, a vote percentage threshold (to be determined by law) could also determine whether RUPPs can qualify for tax breaks in donations received.

Mains Question

Q. “Spate of Registered Unrecognised Political Parties is a cause of concern for electoral transparency, regulatory framework and the misuse of benefits given to political parties. Identify problems related to RUPPs and recommend accountability measures.