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Elections are becoming expensive around the world. In the recent U.S. President election, the estimated cost reached around 1.36 lakh crore. In India, political parties spent around 1,00,000 crore in the 2024 Lok Sabha election.
The amount spent by candidates, political parties and other stakeholders during the election process includes costs related to campaigning, advertising, transportation, rallies and other election related activities.
Regulating election expenditure is important as it impacts the fairness and competitiveness of elections. High expenditure can influence voter behavior, create an uneven playing field, and potentially lead to corruption.
The cost of elections are rising. For example, according to the Centre for Media Studies (CMS), the total expenditure by various political parties for the 2024 Lok Sabha Election was around Rs 1,00,000 crores. During 2019 Lok Sabha it was around Rs 55, 000 crores.
In India, the Election Commission of India decides the expenditure limit of candidates in Lok Sabha and state Legislative Assembly elections.
The election expenditure limit for candidates in Lok Sabha is Rs 95 Lakh Per constituency in larger States and Rs 75 Lakh in smaller states. For legislative assemblies, the limits are Rs 40 Lakhs for larger and Rs 28 Lakhs for smaller states.
There are no limits on the expenditure of political parties during elections.
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How elections are funded in the United States? Election finance mainly comes from contributions by individuals, corporations and Political Action Committees (PACs), while there are limits on individual and PACs contributions to candidates. Super PACs can spend unlimited amounts. The estimated expenditure for the November 2024 election cycle is around 16 billion. |
It governs conduct of elections, outlines the procedure for elections to the Parliament and state legislatures, qualifications and disqualifications for membership, and defines the powers of the Election Commission.
Section 77 of this Act requires every candidate to keep a separate and correct account for all expenditure made from the date of nomination to the date of declaration of results.
Section 29 C of this Act mandates political parties to submit annual financial reports detailing donations above 20,000 to the Election Commission.
Political parties need to disclose contributions over ₹20,000 to income tax authorities and cannot accept donations from government companies or foreign sources.
It is an autonomous constitutional authority responsible for administering the election process under Article 324.
They issue guidelines and monitor the election expenditures of candidates and political parties. They appoint expenditure observers to ensure companies with the expenditure limits.
They enforce the Model Code of Conduct and other regulations to ensure free and fair elections. It provides comprehensive guidelines on election expenditures, its monitoring, and detailing the roles of various officials and the course for monitoring expenditures.
Under Section 293A of the Companies Act 1956, corporate contributions to political parties are limited to 5% of the company's average net profits over the last three years. This provision was designed to regulate the influence of corporate money in politics.
Under the Income Tax Act, contributions to political parties are deductible from income tax calculation. Section 13-A of the Act mandates that political parties need to submit annual audited accounts to the income tax authorities.
It prohibits political organizations from receiving foreign contributions. This law aims to prevent foreign influence in Indian elections and ensure that political funding comes from domestic sources.
Inflation increases the cost of goods and services, which directly impact campaign expenses. For example, the cost of printing material, transportation, and other logistical expenses rise with inflation.
Rising cost due to technological advancement and new mode of voter engagement, the use of online advertisements, Social media campaigns to influence Voters has also Increased the cost of overall campaigning.
The increasing competition of elections causes candidates and parties to spend more on their political campaign to target voters, which can increase their chance of winning.
Expectations of voters, they expect more engagement, better communication, and tangible benefits, and meeting these requirements requires significant financial investment in community outreach programmes, public events and direct voter engagement activities.
High election expenditure influences electoral outcomes, by allowing candidates and parties to reach a wider audience through campaign, advertising and voter outreach, this can create an uneven playing field where resourceful candidates have a direct advantage over those with low resources.
It affects the governance system; where elected representatives feel obligated to fulfill the interest of their financial supporters rather than that of the general public, this creates policy decisions that favor donors, and erodes the principle of democratic governance.
High election expenditure led to corrupt practices such as vote buying, bribery and use of black money, candidates and parties may use illegal means to fund their campaign, leading to a cycle of corruption that continues even after the elections.
Corruption and malpractices erode public trust in the electoral process and democratic institutions. When voters accept that elections are influenced by money rather than merit, it undermines the legitimacy of the elected representatives and democratic system.
High election expenditure creates a barrier to entry for capable individuals who lack the financial resources to compete. This limits the diversity of candidates and reduces the overall quality of representation in democratic institutions.
Indrajit Gupta Committee (1998) and Law Commission Report (1999) have recommended the state funding of elections, which means that the government partially bears the election expenditure of candidates nominated by recognized political parties.
Holding simultaneous elections for the Lok Sabha and state assemblies is a proposed solution based on the Kovind Committee to reduce election expenditure, however, implementing simultaneous elections requires constitutional amendments and careful consideration of federal principles. It also requires logistical coordination and political consensus.
The law must be amended to provide that financial assistance by political parties to its candidates should also be within the candidates prescribed election expenditure limit.
Introduce a cap on political party expenditure, which will control the overall spending by political parties.
Appoint additional judges in the High Court for the speedy disposal of election related cases. This would act as a deterrence against violating election expenditure norms and ensure timely justice.
The reforms related to political expenditure require bipartisan political support to be effectively implemented, therefore, political parties must come together to agree on measures that promote transparency, accountability and fairness in election financing.
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PRACTICE QUESTION Q.How does the rising cost of election campaigns impact the democratic process in India? (150 words) |
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