739 of 2,764: Should the Election Commission Turn Its Scrutiny From Voters to Parties?

A Real Problem, the Wrong Tool: Why Party Finance Needs Law, Not Improvisation

The paradox. Political parties are the principal players in Indian democracy, yet the Constitution mentions them only in the Tenth Schedule. Their registration is governed by Section 29A of the Representation of the People Act.

Once registered, they can accept donations under Section 29B and claim tax exemption under Section 13A of the Income-tax Act. What no law clearly provides is a way to remove a registered party that exists mainly on paper. The numbers.

• Of 2,764 registered unrecognised parties studied by the Association for Democratic Reforms, only 739 filed financial records for 2022-23.
• Declared income of such parties rose 223% that year.
• A BBC investigation has now pointed to unusually large donations to six of them. The question. Should the Election Commission act hard against them or wait for the law?

The case for the Commission acting hard The strongest argument for action is that the Commission already has more power than it uses.

• The Supreme Court in Kanhiya Lal Omar v. R.K. Trivedi (1985) described Article 324 as a reservoir of power for areas where laws are silent.
• In 1994, then-CEC T.N. Seshan put every party on notice, declaring the Commission would not be a mute spectator.
• Registration guidelines require parties to commit to contesting elections, with removal from the list if they do not contest for six years.
• In August 2025 the ECI delisted 334 parties. Former Election Commissioner Ashok Lavasa, author of the column, argues that the Commission's energy belongs here, on shell parties and opaque money, rather than on voters.

The case for caution The strongest argument against improvisation is that the Commission's legal footing is thin.

• Delisting is not deregistration.
• The Supreme Court held in 2002 that the ECI can deregister a party only in narrow circumstances, such as registration obtained by fraud.
• A delisted party may still receive contributions. An aggressive campaign without statutory backing could be struck down in court. Worse, it could be used selectively against small or new parties, which are often the most fragile vehicles of political dissent. An election body that improvises penalties for parties is exercising exactly the kind of discretion that should worry democrats.

Where this leaves us TAN's position is that Parliament should legislate an explicit power to deregister non-compliant parties, backed by mandatory, independent audits of party accounts.

The Commission should not stretch its existing powers. Why this weighing. The problem is serious and documented, so doing nothing is not an option. But the remedy must survive court challenge and apply to every party equally.

Only a law can provide that. It should set clear criteria: failure to contest for a fixed period, failure to file audited accounts and loss of tax exemption on deregistration. What would change our view. If Parliament keeps refusing to act, as it has since the 2013 CIC order on transparency was sidelined, stronger use of Article 324 becomes more defensible as a second-best option.