Electoral Reforms In India

Election Campaign Funding by Political Parties


From UPSC perspective, the following things are important :

Prelims level: Cap on election expenditure

Mains level: Use of money power in elections

With several Assembly elections coming up, the issue of campaigning is back on the track. Campaign funding reforms are one of the biggest issues in electoral reforms worldwide.

Why in news?

  • Elections are fought with huge funds nowadays.
  • Estimates vary, but a candidate may spend in crores in just one constituency.
  • This vital issue is neglected by voters in the noise of campaigns, leaders, celebrities, and media coverage.

Caps on Election Expenditure

The Election Commission of India (ECI) imposes limits on campaign expenditure incurred by a candidate and not political parties.

The ceiling on poll expenditure varies across States:

(a) Bigger states

  • With candidates in Assembly Elections in bigger states like Bihar, Uttar Pradesh, and Tamil Nadu now allowed to spend up to 40L (from ₹30.8 lakhs as against ₹28 lakhs earlier.)
  • For a candidate contesting a Lok Sabha Poll in these States, the revised ceiling on poll expenditure is now 90lakh (₹77 lakhs earlier).

(b) Smaller states

  • While the enhanced ceiling for a Lok Sabha candidate is now 75Lakh (Earlier ₹59.4 lakhs) those contesting an Assembly can spend up to 28 Lakh( earlier ₹22 lakhs.)
  • Goa, Arunachal Pradesh, Sikkim and a few Union Territories (AGMUT states) based on the size of their constituencies and population, have a lower ceiling on poll expenditure.

How are such ceilings made?

  • Such changes are made by amending the Conduct of Elections Rules.
  • The last time the expenditure ceiling was enhanced was in 2014 just ahead of the Lok Sabha polls.

What happens when expenditure exceeds the limit?

  • Contesting candidates are required to file a mandatory true account of election expenses with the EC.
  • An incorrect account or expenditure beyond the ceiling can attract disqualification for up to three years as per Section 10A of The Representation of the People Act, 1951.

What doesn’t account to Election expenditure?

  • The expenditure incurred by leaders of a political party on account of travel by air or by any other means of transport for propagating programme of the political party is not considered to be the election expenditure.
  • Any expenditure which is done for service of the Government and discharge of official duty is also not considered to be election expenditure.

Why is this issue important for the voter?

  • Voters vote for candidates, political parties and leaders so that they deliver benefits to the citizens.
  • If election funds are obtained from other sources, the Governments in power are obliged to the funders more than the voters.
  • The government may take decisions that benefit the donors rather than the voters.
  • Even if a rich candidate funds his own election, the focus is on recovering the investment made rather on public service.

Situation in India on Election Funding

  • Transparency in funding is absent after the introduction of Electoral Bonds.
  • Now citizens cannot know who is funding the political parties.

Way forward

There is also much to learn from international experience. Broadly there are three classes of remedies.

  • First is to make all election funding completely transparent so that voters know who is funding whom.
  • Second is to prevent private interests from unduly influencing elections or Governments. This is done by a set of rules on limiting funding.
  • Third is to try and have a more level playing field so that good politicians, candidates and parties with less funds also stand a chance of competing in elections.


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2 years ago

If I am Not wrong then the spending cap has been increased to 40 lakhs from 28 lakhs for big states and to 28 lakh from 20 lakh in small states.

Please Recheck OR correct me if I am wrong.


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