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Expenditure Limit in Election Campaign: Is there level playing field in Indian Democracy?

The Election Commission has identified unchecked money power as one of the biggest concerns and has been rooting for capping party and campaign expenditure to ensure a level playing field for all parties and to check the money power visible during every election. The Election commission had recommended amendments to the Representation of the People Act and Rule 90 of The Conduct of Elections Rules, 1961 to the essence that a political party should limit its spending on a candidate during election to not more than 50%, or half, of the candidate’s expenditure limit, the Election Commission has reiterated its position in a fresh communication to the law ministry. Currently, there is no cap on the amount a political party can spend in an election or on a candidate. Thus, so far, the EC has been unable to cap a political party’s expenditure in an election. In one such meeting on August 27, 2018, the BJP was conspicuous in opposing any capping. The BJP then said “political campaigns led by parties are agenda-based” and “if this is limited, it would encourage politics based on caste, and individual influence”.

The election campaigns in India are highly skewed as far as Parties’ and candidates’ wealth and campaigning expenditure are concerned. The donors to political parties seem to be interested in supporting the political parties in extremely partisan manner, which casts doubts on their intentions. Corporate funding per se is not bad, if the donors intend to support political parties in a judicious and balanced way. But as depicted above, the corporate funding is highly biased and partisan, and this certainly affects electoral outcomes. Corporate sector cannot be forced to behave in a particular manner, but it must be ensured that they do not scuttle the democratic process of elections in India. And it is sure, self regulated moral and ethical behavior is doubtful and improbable; therefore, some kind of ceiling for corporate funding to a single political party seems to be one of the possible solutions.

In the era of full time politicians, politics has become a career sort of thing with huge power rentals and other privileges; therefore, neither the political parties nor the candidates find huge expenditure in election campaign as unproductive and waste. According to an Economic Times Report (27 August, 2018), the election Commission report showed that in the Gujarat and Himachal Pradesh Elections in 2017, BJP spent Rs. 1 crore, the Congress Part Rs.51 crore and the BSP spent a meager Rs.1.2 crore. The same year in the UP assembly election the BJP spent Rs.218 crore, the BSP spent Rs.40 crore and the Aam Aadmi Party spent Rs.12 crore. The election expenditure could easily and logically be correlated with the electoral outcomes. In this situation the democratic elections of India do not offer level playing field to participating political parties and candidates. The parties and candidates supported by the rich and wealthy have more chances to win. The electoral funding has to be more democratic if at all the Indian democracy’s claim of being the largest (people’s) democracy has to be proven right. One of the dangers of big funds received from the corporate sector by the political parties is that governments may play into their hands and serve their interest while formulating policies. There are allegations that political leaders are being made “brands” to serve the interest of the business tycoons and the wealthy. It needs reforms.

Legal Provisions of election Campaign funding

There are legal provisions setting the limits for expenditure of electoral candidates in the Lok Sabha and Vidhan Sabha elections. The law prescribes that the total election expenditure shall not exceed the maximum limit prescribed under Rule 90 of the Conduct of Election Rules, 1961.  A candidate can spend upto Rs.70 lakh, depending on the state they are contesting the Lok Sabha election. Expenditure limit in the Assembly Elections is Rs. 28 lacs in bigger states.

A candidate can spend between Rs 50 lakh and Rs 70 lakh, depending on the state they are contesting the Lok Sabha election from. For all states, except Arunachal Pradesh, Goa and Sikkim, a candidate can spend a maximum of Rs 70 lakh on canvassing. The cap for Arunachal Pradesh, Goa and Sikkim is Rs 54 lakh. And, it is Rs 70 lakh for Delhi and Rs 54 lakh for other Union territories. For the assembly elections, the ceiling is between Rs 20 lakh and Rs 28 lakh. This includes the money spent by a political party or a supporter towards the candidate’s campaign. But, expenses incurred either by a party or the leader of a party for propagating the party’s programme are not covered.

Main components of the election expenditure

A limit has been fixed for all expenses such as posters, banners, vehicles, prints and electronic advertisements, public meetings, tents and all such expenses made by the candidates under legal limits of which a record is maintained in the Lok Sabha election. It is mandatory for all candidates to open an account in bank for the expenses, the payment of which will be made through cheque. Expenses which are not permissible under law – such as distribution of money, liquor or any other item and bribe for the purpose of influencing voters etc. is an offense under the Indian Penal Code and is a corrupt conduct under the Public Representation Act .

  • Expenditure on vehicles during election campaign:-34%
  • Expenditure on Campaigning equipment:- 23%
  • Expenditure on Election Rallies:- 13%
  • Expenditure on electronic and print media:- 7%
  • Expenditure on Banners, hoardings and pamphlets:- 4%
  • Expenditure on field visits:- 3%

What is the mechanism to monitor?

Candidates have to keep a separate account and file the election expenses with the poll watchdog under the law. An incorrect account or expenditure beyond the cap can lead to disqualification for up to three years under Section 10A of the Representation of the People Act, 1951. All registered political parties have to submit a statement of their election expenditure to the election commission within 90 days of the completion of the Lok Sabha elections. And all candidates are required to submit their expenditure statement to the poll panel within 30 days of the completion of the elections.

According to the latest provisions election expenses will be monitored through Central Expense Observer, Assistant Observer, Nodal Officer, video monitoring, video reviews, accounts team, flying squad team (FST), static surveillance teams (SST) and control room. The district authorities will monitor the expenses of the political parties from the date of declaration of election to the date of declaration of results through a flying squad. This expenditure will not be added to the candidate’s expenditure, however, the report of the observers with records and evidence should be given to the Chief Electoral Officer in the prescribed proforma within 45 days of the declaration of election results. In the cases in which the candidate fails to furnish the day-to-day account of election expense for inspection and if this failure persists despite being given notice, then 48 hours after the notice is served, an FIR will be lodged under Indian Penal Code and the permission for use of vehicles by the candidate for election campaign will be withdrawn. In the cases in which the candidate or his election agent fails to reply within the time limit of 48 hours after receiving the notice, then it will be considered that the hidden amount mentioned in the notice has been accepted and this amount will be added to the election expense of the candidate.

Trends in election Expenditure in India

The total government expenditure for the first three general elections was around Rs. 10 cr each. The government expenditure rose to Rs. 100 crore until the eighth general election in 1984-85. It crossed Rs. 500 crore for the first time during the 11th general election in 1996 and went beyond Rs. 1,000 crore during the 14th general election in 2004. In the 2009 Lok Sabha polls, the cost to the exchequer was Rs. 1,483. This does not include the expenses incurred for security and the amount political parties will spend. The total government expenditure for the last Lok Sabha polls in 2014 at was around Rs. 3,870 crore which was 3 times more than the expenditure incurred for the 15th general election in 2009.  It does not include expenditure of political parties.

Party-wise income and expenditure in India

Elections are an expensive affair with political parties spending crores of rupees towards campaigning. A US-based election expert has said, according to news agency PTI, that the upcoming general elections will be the most expensive in the history of India and perhaps one of the most expensive ever held in any democratic country. According to Milan Vaishnav, senior fellow and director of the South Asia Program at the Carnegie Endowment for International Peace think-tank “The combined US presidential and congressional elections in 2016 cost $6.5 billion. If the 2014 Lok Sabha elections cost an estimated $5 billion, there is little doubt the 2019 election will easily surpass that – making India’s elections the world’s most expensive.”
Centre for Media Studies reports that for the general elections of 2014, BJP spent more than Rs. 700 crore for campaigning and publicity. BJP was the biggest beneficiary of the electoral bond scheme launched by the government in 2017-18, bagging 94.5% of the bonds worth a little over Rs 210 crore. Electoral bonds worth a total of Rs 222 crore were issued in the maiden tranche of the scheme in March this year.  In keeping with the anonymity offered to donors under the electoral bond scheme, the identity of the donor/s to the BJP is not known. The contribution accounts for 20.4% of the total funds raised by the party during the year. Some political parties have severely criticized the electoral bond scheme saying that it lacks transparency, although the government has defended it saying it at least ensures funding through clean banking channels and hence checks black money and anonymous cash flow. Nonetheless, the CPM filed a petition in the SC against the scheme.  As in the previous year, the BJP breached the Rs 1,000 crore mark, as it raised Rs 1,027 crore in 2017-18 and spent Rs 758 crore. The report says that the party spent more than Rs 567 crore on ‘election/general propaganda’, Rs 22 crore on employee costs and Rs 143 crore on administrative costs.

Association for Democratic Reforms analysed the total income and expenditure incurred, all over India, by the National Parties during FY 2017-18, as declared by the parties in their IT Returns submitted to the ECI. The National Parties include Bharatiya Janata Party (BJP), Indian National Congress (INC), Bahujan Samaj Party (BSP), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India (Marxist) (CPM) and All India Trinamool Congress (AITC).According to it the income of the parties are as follows:

  • Between FY 2016-17 and 2017-18, the income of BJP decreased  by 0.67% (Rs 6.93 cr) from Rs 1034.27 cr during FY 2016-17 to Rs 1027.34 cr during FY 2017-18.
  • Between FY 2016-17 and 2017-18, the income of BSP decreased  by 235.78% (Rs 121.88 cr) from Rs 173.58 cr during FY 2016-17 to Rs 51.694 cr during FY 2017-18 while the income of NCP decreased  by 111.47% (Rs 9.085 cr) from Rs 17.235 cr during FY 2016-17 to Rs 8.15 cr during FY 2017-18.

The study has also depicted the income and expenditure of political parties in the following graph for the FY 2017-18.

The discussion, thus, makes it very clear that Indian elections are not conducted in a level playing field given the very nature and process of funding the political parties and election campaigns. Although the constitution and election commission stand ardently in favour of free and fair elections, there are many factors including campaign financing which impede further democratization of the system. India needs reforms in political party funding as well as funding of electoral campaigns.

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