Political Parties and Electoral Democracy in India
The Indian political system is marked by an irony where political parties, key stakeholders in electoral democracy, are not explicitly mentioned in the Constitution except in the Tenth Schedule. They exist under Article 19 as "associations" furthering fundamental rights. Despite their nebulous legal status, these entities enjoy significant income tax exemptions, occasionally becoming recipients of unaccountable funds akin to 'shell' companies.
Unrecognised Political Parties and Financial Anomalies
- A BBC investigation revealed extraordinary donations to six Registered Unrecognised Political Parties (RUPPs), exposing a common yet disturbing facet of Indian politics.
- The Association for Democratic Reforms (ADR) reported a 223% increase in declared income of RUPPs for FY2022-23, with only 739 out of 2,764 RUPPs submitting financial records to the Election Commission of India (ECI).
Electoral System Cleanup Efforts
- On August 9, 2025, the ECI delisted 334 RUPPs as part of efforts to clean up the electoral system.
- T.N. Seshan, former Chief Election Commissioner, highlighted the disorder in political parties and issued guidelines for registration under the Representation of the People Act, 1951.
Donations and Financial Discrepancies
- The BJP received ₹6,088 crore in donations in 2024-25, 12 times more than Congress, raising concerns about corporate influence and anonymity in political donations.
- In FY2022-23, individual donors claimed exemptions worth ₹2,275.85 crore, far exceeding corporate claims, indicating a shift in donation patterns.
- Declared donations increased significantly from ₹714 crore in 2015-16 to ₹7,203 crore in 2023-24.
Issues with Electoral Bonds
- The electoral bonds scheme, introduced in 2018 and declared unconstitutional in 2024, remains controversial due to the opacity it introduces in political financing.
- Most RUPPs were ineligible for electoral bonds, yet questions remain about their funding sources and intentions.
Transparency and Accountability Challenges
- Political parties resist transparency measures, such as the 2013 CIC order to bring them under the Right to Information Act.
- The ECI lacks the mandate and resources to scrutinize political finances effectively, leading to compliance in form but not in spirit.
Recommendations for Reform
- A court-monitored probe is suggested to investigate electoral bonds and the financial activities of RUPPs.
- The ECI is urged to audit political party accounts through the Comptroller and Auditor General of India, impose spending limits, and establish a digital portal for financial disclosures.
- Tax exemptions should align with prescribed limits, and 'deregistering' non-compliant RUPPs should be automated.
