Registered Unrecognised Political Parties (RUPPs): Regulation and Transparency

What are RUPPs?

• Political parties registered with the Election Commission of India (ECI) but not recognised as a National or State Party.
• Registration is governed by Section 29A of the Representation of the People Act, 1951 (RPA).
• After verifying the required documents, the ECI registers the political party.
• Benefits available to RUPPs: RUPPs enjoy certain statutory benefits, including:
  
• Income-tax exemption on eligible donations under Section 12 of the Income Tax Act, 2025.
• Common election symbol for elections to Lok Sabha/State Assemblies, subject to applicable conditions.
• 20-star campaigners during election campaigns.
• RUPPs must:

         Maintain details of individual donors contributing above ₹20,000 in a financial year.
         Submit these details to the EC every year.
         Accept donations above ₹2,000 only through cheque or bank transfer.

What are the implications of weak regulation? 

Structural factors

• Weak de-registration powers: EC cannot readily remove non-serious parties from the register.
  
• India had more than 2,800 RUPPs as of July, but only around 750 contested the 2024 general elections.
• This leaves a large number of registered parties that do not meaningfully participate in elections.
• The EC does not have explicit statutory power to de-register a political party merely because it does not contest elections.
• Tax-exemption vulnerability: Parties that merely fulfil statutory requirements could continue receiving tax benefits.
• Transparency deficit: Limited availability of annual reports reduces public scrutiny of political funding.
• Risk of misuse: RUPPs could potentially become channels for illegal financial transactions.
• Institutional mismatch: EC is responsible for regulating political parties but lacks adequate statutory powers to enforce continued electoral activity.

Cyclical factors 

• Election-period activity: Some RUPPs contest elections with very limited participation.
• Financial flows around elections: Large donations to parties with little electoral activity raise questions about the purpose and transparency of such funding.
• Repeated non-compliance: Weak annual-report compliance can persist because the EC lacks adequate de-registration powers.
  
• The EC periodically publishes the list of delisted RUPPs.
• The October 2025 notification contained over 800 such parties.
• EC reports also indicate weak compliance:
• Poor compliance + continued registration + tax exemptions can create an opaque channel for financial transactions which might be misused for tax evasion and money laundering.

How can RUPPs be regulated better? 

Incremental measures 

• Give the Election Commission explicit statutory power to de-register parties that fail to contest elections for a prescribed period.
  
• The Law Commission of India, in its 255th Report, recommended empowering the ECI to de-register a political party if it fails to contest elections for 10 consecutive years.
• The ECI's 2016 Memorandum on Electoral Reforms also recommended amending the Representation of People’s Act (RPA) to provide the ECI with such de-registration powers.
• Strengthen monitoring of annual reports, donation disclosures, and financial transactions. 
• Improve public disclosure of RUPP financial information.
• Enable stronger coordination between the EC and Income Tax authorities to detect suspicious transactions.
• Enforce existing compliance requirements more strictly.

Disruptive measures

• Link tax exemptions with genuine electoral participation 
  
• The ECI has suggested that tax exemptions should be provided only to political parties that win seats in the Lok Sabha or State Legislative Assemblies.
• However, this could disadvantage smaller parties that contest elections without winning seats.
• A more proportionate alternative is a minimum vote-share threshold, similar to the 1% vote threshold used for allotment of common symbols to RUPPs.
• Create a clearer statutory framework distinguishing active political parties from non-serious or inactive entities.

Conclusion:

RUPP regulation must balance freedom of political association with financial transparency. Stronger EC oversight, meaningful electoral participation requirements and targeted tax-exemption rules can reduce misuse without restricting legitimate political activity.