Registered unrecognized political parties

Context:

According to a report by Association for Democratic Reforms (ADR), the number of registered unrecognised political parties has increased two-fold from 2010 to 2019.

Probable Question:

1. What do you      mean by registered unrecognised      political parties? Why is there      a need to regulate the registration of these political parties?

Key Points:

● Unrecognised registered political parties are either newly registered or have not secured a sufficient percentage of votes in the Assembly or General Elections to become a state party. Those registered parties which have never contested in elections are also considered unrecognised parties.

● According to the Election Commission of India (ECI) notification on April 13, 2018, there are 2,099 political parties registered. About 97 per cent of registered political parties are unrecognised.

● Political parties are completely exempted from paying Income Tax as long as they file their Income Tax returns to the IT Department and submit details of donations received above Rs 20,000 to the ECI, annually.

● Even if the parties declare that they have not received any amount above Rs 20,000 from a single donor, they would still enjoy tax exemption. Thus, political parties, once registered with the ECI, irrespective of their status of recognition, can continue to collect donations and enjoy tax exemption, if they satisfy the above two conditions.

The need to regulate unrecognised parties:

● The number of these registered but unrecognised parties has increased two-fold in the last decade. From 1,112 parties in 2010, the number has increased to 2,301 in 2019.

● It is important to note that the number of such parties increases disproportionately during the year of Parliamentary elections especially.

● Only 5% of these unrecognised partiessubmitted their donation reports to the EC between 2013-14 and 2015-16.

● Such unrecognised parties enjoy certain income tax benefits but they tend to act as a channel to funnel black money into the political system.

● There is a lack of strict adherence to the reporting and accounting framework (of political funding) by the registered unrecognised political parties and the complete absence of information on the funding and expenditure of several of these parties on the state CEO websites.

● Out of 43 registered unrecognised parties that submitted details to ECI in only one registered unrecognised party was found eligible to receive donations vide electoral bonds, as per the eligibility criteria mentioned in the Electoral Bond Scheme, 2018.

Way Forward:

● The Election Commission should weed out all political parties which do not contest in any election for more than 5 years and also as a means to strengthen the registration process.

●  The website of the state Chief Election Officers should be regularly updated to provide details of the status of submission of audit reports and contribution reports by unrecognised parties.

● Regulation of registration of political parties is crucial to avoid money laundering, corrupt electoral practices and abuse of money power. Thus, the ECI should impose strict norms for the registration of an association of persons as a political party apart from taking the stringent step of de-listing those parties which fail to adhere to the rules.

● Income Tax scrutiny of unrecognised parties should be taken up, especially of those which do not contest in elections but declare voluntary contributions.