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Urgent Need For Political Party Reforms

Updated: June 2, 2012 11:59 am

An RTI application unearthed the fact that only 8% of 1,196 registered political parties have submitted annual reports regarding contributions above Rs 20,000 to the Election Commission. And only 15% have submitted their audited financial statements!


Political party reforms are critical in the context of electoral reforms and need to be addressed urgently. The only reference to political parties in the Indian Constitution is in the Tenth Schedule of the Constitution incorporated by the Constitution (52nd Amendment) Act, 1985. This deals with the disqualification of a person as a member of either house of parliament or the legislative assembly/council on grounds of defection.

Framing and administering rules and regulations governing political parties comes within the juridical purview of the Election Commission of India (ECI). It is the ECI that has the ultimate power to register or deny registration to any association or body of individuals as a political party; and to accord recognition and status of political parties to “the association or body of citizens of India”.

Article 29A (1) and (2) of the Representation of People Act (RPA), 1951 makes it mandatory for any association or body of individuals of India calling itself a political party to make an application to the ECI for registration as a political party, within 30 days following the date of its formation. Article 29A (5) requires that the application be accompanied by a copy of the memorandum or rules and regulations of the association or body, wherein the association or body shall affirm true faith and allegiance to the Constitution of India. Further, sub-section (7) of Section 29A adds stringency to the above provision by stating that no association or body shall be registered as a political party under this section unless the memorandum or rules and regulations of such association or body conforms to these provisions, that is, the provisions of sub-section (5) of Section 29A. The Election Commission’s decision in this matter is final.

As regards accountability related to reporting on the regular functioning, expenditure and income of registered political parties, there are certain provisions already present that empower the ECI. First is Section 29C of the RPA that compulsorily directs all registered political parties to submit an annual report to the ECI on all contributions in excess of Rs 20,000, without which no political party is eligible for any tax relief provided to political parties under the RPA. The second important provision in the same context is Guidelines and Application Format for Registration of Political Parties, under Section 29A of the Representation of the People Act, 1951, issued by the ECI which, under Article VIII of Rule 3(i) and under Rule 3(xix), lays down clearly a mandatory requirement for all political parties to submit their audited annual financial statements to the ECI. Third is the most significant section, sub-section (6) of Section 29A of the RPA, which provides that the ECI may call for such other particulars as it deems fit from the association or body making the application for registration as a political party.

Public Interest Foundation (PIF), an NGO, sought information under the RTI Act to find out the status of compliance with various mandatory provisions under the jurisdiction of the ECI. On the compliance status under Section 29(c) of the RPA regarding submission of annual reports to the ECI of all contributions in excess of Rs 20,000, PIF received a reply from the ECI that, till now, only 98 registered political parties out of a total of 1,196 registered political parties have submitted annual reports regarding contributions above Rs 20,000. Compliance therefore is a mere 8%. Further, the ECI has not recommended any action to the income tax department against the defaulting political parties; only copies of contribution reports received from the political parties have been referred to the income tax department. Perhaps the ECI could have educated the general public in this regard so as to enable them to make an informed choice whilst casting their votes during elections.

Through another RTI application, PIF sought information specifically on compliance with the mandatory guidelines issued by the ECI under Article VIII of Rule 3(i) and Rule 3(xix) of the Guidelines and Application Format for Registration of Political Parties under Section 29A of the Representation of the People Act, 1951 which calls for the mandatory requirement of submission of annual audited financial statements by all registered political parties within six months of the end of each financial year. In a reply to the RTI application, the ECI made the shocking revelation that out of a total of 1,196 registered political parties only 174 have actually submitted an annual audited financial statement for the year 2010-2011; 85% of registered political parties had not complied with the mandatory guidelines.

The efficacy of powers granted to the ECI with regard to accountability and reporting on regular functioning, expenditure and income is seriously compromised in the absence of any provision for penalising defaulters. This routine practice, where repeated defaulters go unnoticed and unpunished, gives rise to a culture of blatant disobedience among registered political parties. The ECI, while exercising its powers to register a political party under Section 29A of the Act, acts quasi-judicially, but once a political party is registered, the ECI has no powers to review the order registering a political party for having violated provisions of the Constitution or for having breached the undertaking given to the ECI at the time of registration. The only conditions under which the commission can de-register a party are when it is found later that a party has obtained its registration through fraudulent means, or it has been declared by the government as unlawful, or when a party itself intimates the commission that it has ceased to function or has changed its party constitution, or will not function in accordance with the provisions of the law. Moreover, the sanctity of the provision is all the more diluted by the fact that parties that do not subscribe to secularism, socialism and democracy may be denied registration by the ECI, but they are still not barred from contesting elections.

Rightly aggrieved over these merely symbolic powers, the ECI sent a proposal, in July 1998, to enable it to issue orders regulating registration and de-registration of political parties. The government has yet to grant the ECI this very important power.

If governments have no laws stating what parties can and cannot do, nations risk engaging in ruthless politics with little or no public accountability. One does not have to invent a new wheel. There is a draft bill called the Political Parties (Registration and Regulation of Affairs, etc) Act, 2011, prepared by the Centre for Standards in Public Life (CSPL) under the guidance of former Chief Justice of India M N Venkatachaliah. This draft bill attempts to address a wide spectrum of issues ranging from the formation of political parties to registration, governance, accountability, regulation of political parties, functions of parties and their discipline. It compulsorily lays down the condition for maintenance and reporting on accounts and all contributions above Rs 20,000 by political parties, clearly noting that compliance with provisions of the Act and the declaration submitted by political parties at the time of registration would be legally binding on them, on a continual basis. Strict norms have been laid down for the observance of internal democracy like no nominations and periodic free and fair elections for selecting various office-bearers within a political party. Addressing the existing discrepancy where even unregistered parties can contest elections, the draft bill calls for registration with the ECI as a necessary criterion for contesting elections. Moreover the registrar, through this draft bill, is empowered to direct a special audit of the accounts of any year of a party or of any local unit. The draft bill strongly talks about penalties to be meted out to political parties in case of deviance from the provisions laid down by the bill, by way of a fine of Rs 10,000 per day of non-compliance, imprisonment of up to three years, as well as withdrawal of registration. Other significant grounds for de-registration of a political party by the registrar, according to this draft bill, is the non-contesting of more than one general election, or not securing a prescribed minimum percentage of votes polled, or not taking part in mainstream political activities.

Amongst high-level government reports on this issue, there is the Law Commission’s ‘170th Report on Electoral Reforms’ (1999), the National Commission for the Review of the Working of the Constitution report on electoral reforms (2002) and the ECI’s recommendation on electoral reforms (2004). Though these reports strongly advocate the regulation of all political parties through law, they recommend the inclusion of this law as part of the already existing RPA, rather than enacting an exclusive Act for the regulation of political parties in India.

In its ‘170th Report on Electoral Reforms’, the Law Commission suggested the inclusion of a completely new PartIIA, titled ‘Organisation of Political Parties and Matters Incidental Thereto’, to be introduced in the Representation of the People Act of 1951. This new Part-IIA, comprising Section 11A to 11I, provides for internal democracy in political parties; complete adherence of the aims and objectives or goals and ideals of political parties with that of the Constitution of India; registration with the ECI without which no political party will be permitted to contest elections; general organisation of political parties; maintenance of regular accounts of political parties—of amounts received by the party, its income and expenditure—properly audited and submitted to the ECI. Part-IIA also details the punishment to be meted out to political parties in case of non-compliance of these sections, in the form of a penalty of Rs 10,000 for each day of continued non-compliance after notice, as well as withdrawal of registration of the said political party. Additionally, the report by the Law Commission emphasises the insertion of another new Section 78A to the RPA whereby it provides for stringent punishment of political parties in case of non-compliance with the maintenance and disclosure norms regarding clear and full annual accounts of receipt and expenditure incurred by the political party.

The minimum that citizens can be promised is the provision that seeks to regulate the regular functioning of political parties in terms of maintenance of accounts and contributions, along with a clause for legal punitive action in case of non-compliance. Moreover, there should be the mandatory requirement for an appropriate authority to generate public information regarding defaults by political parties on binding disclosures so that a true public image of the political party may be constructed in the minds of the common citizenry. Can the ECI deliver this gift to the nation without waiting for major legislative changes in electoral laws?



By Nripendra Misra and Tannu Singh

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