A new report by the Association for Democratic Reforms (ADR) presents a startling picture of political funding in India. In the financial year 2024-25, Gujarat's 29 registered unrecognized political parties (RUPPs) declared a total income of ₹510.41 crore. This figure is the highest reported by any single state or Union Territory in the country.
Delhi’s 73 parties reported an income of ₹218.48 crore, while Rajasthan’s 23 parties declared ₹173.36 crore. The combined income of these three states stood at ₹902.25 crore, accounting for nearly 80.67% of the total ₹1,118.49 crore declared by 734 such parties nationwide.
Crores in Earnings, Zero Electoral Success
The most striking aspect of the report is that despite these massive revenues, the electoral performance of these parties remained extremely poor. None of the top 15 highest-earning parties in FY 2024-25 managed to win a single seat.
Between 2020-21 and 2024-25, these 15 parties contested a total of 35 seats across various elections, but their success was limited to winning just one seat overall.
Among the highest earners were Gujarat's New India United Party and Bhartiya Rashtriya Jantantrik Dal, along with Rajasthan's Bhartiya Gareeb Vikas Kalyan Party. The combined income of these three parties stood at ₹660.52 crore, making up 67.82% of the top 15 parties' total earnings (₹973.93 crore).
Lack of Transparency and Tax Exemptions
According to the ADR, these 734 parties represent only 35% of all registered unrecognized political parties in the country. The annual audit reports and donation details of the remaining 65% (around 1,330 parties) are not publicly available.
Under current tax laws, political parties enjoy income tax exemptions provided they file their Income Tax Returns (ITR) and submit details of donations exceeding ₹20,000 to the Election Commission. Interestingly, even if a party declares that it received no individual donations above ₹20,000, it remains eligible for the tax exemption.
Election Commission Crackdown
Notably, the Election Commission delisted 808 unrecognized parties in two phases across August and September 2025. These parties faced action for failing to contest any election for six consecutive years. The Commission had issued show-cause notices granting them an opportunity to present their side before taking action.
The ADR report highlights a growing trend of unrecognized political parties declaring massive incomes while maintaining a negligible presence on the ground, raising serious questions regarding political funding and financial transparency.
