Election Expenditure in India

Election Expenditure in India | Trends and Challenges

By: Staff Reporter
Economy Politics

The last Lok Sabha election of 2014 was the most expensive election in the history of Indian democracy with a cost of Rs 3,426 crores incurred by the national exchequer. This represented an increase by 131 per cent over the expenses incurred in the 2009 Lok Sabha election; in the 2009 election, a cost of Rs 1,483 crores was incurred by the national exchequer (The Hindu, 2016).

According to the Ministry of Law and Social Justice and the Election Commission of India, election expenditures in India since the 1984-85 Lok Sabha elections have been steadily rising after each election although the numbers can be provisional (Table 1).

Table 1: Election expenditure for Lok Sabha elections between the 1984-85 elections to the 2004 election.

Year of Lok Sabha Election Expenditure in Rupees (crores)
1984-85 81.51
1989 154.22
1991-92 359.1
1996 597.34
1998 666.22
1999 947.68
2004 1,113.88

Source: Press Information Bureau, 2014

The expenditure of conducting the Lok Sabha elections is borne by the government of India. State Governments bear the expenditure costs for maintaining law and order during the Lok Sabha elections (PIB, 2014). However, there are no limits on the expenditure incurred by the political parties and large sums of money are raised and spent by them during their election campaigns.

The demand for election expenditure in India is expanding, which combined with the growth of India’s economy, means that voters’ demands and perceptibility are changing to become more sophisticated. They are demanding more sophisticated methods of attracting votes. For example, the election manifestos might not be enough for some political parties, who look to supplement them with campaign advertisements to reach a wider audience including the disinterested voters.

Bhowmick (2014) argues that while part of this steady increase in election expenditure in India could be due to inflation, it could also imply a change in election dynamics. Changing voter expectations, especially among the rising numbers of younger voters, which require a larger scale of operations in campaigns are transforming election campaigns, says Dilip Cherian – a political campaign advisor and founding partner of Perfect Relations, a communications group. Political parties and candidates, in election campaigns that are becoming more and more visible, are required to upgrade even smaller details like seating arrangements at rallies to meet the demands of an increasingly digitized and mediated age, one where communication technologies are expanding opportunities for raising voters’ perception at leaps and bounds.

Another important and related factor that could be contributing to the steady rise in election expenditure in India is rapid economic growth in the Indian economy since 1991. There is greater pressure on politics to deliver and perform, which has shifted the locus of elections from being hugely determined by vote banks and traditional voting habits to one that is also greatly influenced by the performance of parties in power. Contesting candidates with a better record in delivering developmental activities thus stand a better chance of being judged positively during elections. Although vote banks can remain highly influential, the demand for performance along with the increased public scrutiny of contesting candidates frequently drives election campaigns.

The tools utilized by political parties in disseminating propaganda are also advancing with the development of new technologies. Propaganda messages are not fed chiefly into localities, but occupy mass communication as well, which can act to raise costs related to election expenditure in India. Mediated communication being in election propaganda can have a wider reach in terms of reception along with greater costs than merely displaying a poster or using loudspeakers in localities. Often political parties enter into competition defining their presence and credibility to voters through propaganda with newer and better technological means which can also act to increase election expenditure in India. Moreover, the electoral propaganda does not remain limited or purely unique to the respective constituencies.

Issues in Election Expenditure in India

A proper account of election expenditure is required to be provided by political parties and contesting candidates to the Election Commission of India (ECI) after the conclusion of the Lok Sabha Elections i. e., within 90 days after the completion of the Lok Sabha elections, all registered political parties have to submit before the ECI a statement of election expenditure. Similarly within 30 days after the conclusion of the Lok Sabha elections, all contesting candidates are required to produce an expenditure statement before the ECI. Political parties are supposed to provide details of lump sum amounts provided to contesting candidates; they are also required to provide details on amounts received to the ECI.

The Association for Democratic Reforms (ADR, 2015) compared and analyzed information on lump sum amounts granted by political parties and received by contesting candidates after the 2014 Lok Sabha election in India based on declarations made by political parties and Member of Parliaments (MPs) to the ECI. Complete information was available for 539 MPs out of 543 in ADR’s analysis and out of remaining 4 MPs, one passed away and 3 were independent candidates. The ADR found certain inconsistencies in the accounts declared by parties and contesting candidates. For example, ADR found that 263 MPs out of 342 MPs from national parties declared a total sum of Rs 75.59 crores as received from their respective parties whereas the national parties declared to the ECI that 175 MPs received a total sum of Rs 55.23 crores. A similar mismatch was observed by the ADR for candidates from regional parties with 38 MPs from 15 distinct parties declaring the amount received from their respective parties as nil.

Pandey (2017) reports that national and regional parties had a total income of Rs 11,367 crores between 2004-05 and 2014-15. However, out of the total income of these parties, about 69 per cent was found to be from unknown sources according to data from the ADR. During the aforementioned decade, the income for national parties from unknown sources increased by 313 per cent while for regional parties the proportion increased by 652 per cent. Donor details were available to the tune of only Rs 1,835.63 crores while income from other known sources such as from membership fees, the sale of assets, the sale of publications, bank interest, party levy, and so on made up for about 15 per cent of the total.

There are also issues of black money being utilised in elections. According to S. Y. Quraishi – a former Election Commissioner, although accounting for public funding of elections is a difficult task, monitoring the funding of political parties would help in checking levels of corruption in elections. Others, such as Yogendra Yadav, an activist and psephologist, however, argues for a more holistic solution of public, or state funding of election expenditures in India. Accordingly, instead of monitoring the flow of black money in election expenses, efforts must also be made to infuse legitimate white money into the election process ensuring a level playing field (The Hindu, 2017). It can be that both monitoring of corruption in election campaigns along with the infusion of white money therein are necessary for introducing transparency and equity in election expenditure in India considering that funding of election campaigns can be a gigantic task in the world’s largest democracy.

It seems that while developed countries such as Japan and Germany have state financed elections, India is an emerging economy that is making a transition to carrying out elections with greater and greater expenditure by contesting candidates and political parties. Imposing limits on spending in elections in a scenario associated with increased competition between political parties and contesting candidates for garnering maximum votes can have adverse impacts on the circulation of white money in election campaigns. Solutions are needed that can generate a fund whereby sufficient white money can be present for use by the political parties and contesting candidates in election campaigns that streamline electoral competition in a healthy manner.

The government recently introduced the electoral bond scheme during the 2017 Budget aiming to account for donations made to political parties. In this scheme, electoral bonds of specified amounts are issued by specified branches of the State Bank of India (SBI) whereby donors can donate bonds to the party of their choice that are cashed in by the verified account of the party. Donor details are classified. The issue of disclosure of donations collected by six national parties through electoral bonds however, faced some difficulties following the ECI’s recent order that political parties are outside the purview of Right to Information (RTI) (Bhatnagar, 2018). The ECI’s decision raises some grey areas over the transparency of the system of electoral bonds, which are not completely determined by India’s electoral machinery. Although electoral bonds can be one suggestion in ensuring the transparency of election expenditure in India, the country must gradually move towards state financed elections to ensure a more transparent election process.

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