Election Expenditure in India

India, the world’s largest democracy, faces substantial election expenditures that continue to grow with each electoral cycle. According to the Centre for Media Studies (CMS), political parties collectively spent nearly Rs 1,00,000 crores on the 2024 Lok Sabha elections alone. This article provides an in-depth look into India’s election expenditure, examining candidate limits, sources of funding, international comparisons, and potential reforms.

Rising Election Expenditures and Current Status

Election spending in India has grown tremendously since independence, reflecting increased campaign intensity and digital outreach. In the 1951-52 elections, candidates spent an average of Rs 25,000 each. Today, candidates in larger states can spend up to Rs 95 lakh for Lok Sabha seats and Rs 40 lakh for Assembly seats. Meanwhile, candidates in smaller states face limits of Rs 75 lakh for Lok Sabha and Rs 28 lakh for Assembly seats. Notably, political parties are not subject to any spending limits, allowing unrestricted expenditure on advertisements, campaigns, and digital outreach.

Government Advertising: Election periods often see increased government advertising expenditures, which indirectly benefit the ruling party. For instance, from 2018-19 to 2022-23, the government spent Rs 3,020 crores on advertisements, with election years reflecting higher allocations—Rs 1,179 crores in 2018-19 compared to Rs 408 crores in 2022-23.

Cost Per Vote: The 2024 elections saw the average cost per vote rise to around Rs 1,400, underscoring the heavy financial demands of campaigning across India’s vast constituencies.

Election Expenditure in Other Democracies

India’s approach to election expenditure contrasts with established democracies, where spending is tightly regulated:

• United States: Campaign financing is structured through regulated contributions from individuals, corporations, and Political Action Committees (PACs). The Supreme Court has permitted Super PACs to spend unlimited amounts on campaigns, creating transparency but also raising issues around large financial influences.
• United Kingdom: Parties face strict expenditure limits. For instance, each party contesting all constituencies can spend a maximum of £35 million, with candidate spending further divided into long and short campaign phases. These caps help to level the electoral playing field and prevent disproportionate spending advantages.

Legal Framework Governing Election Expenditure in India

India’s legal provisions guide campaign financing but do not extend to party expenditure limits, resulting in significant disparities. Key regulations include:

• Representation of the People Act (RPA), 1951: Section 77 mandates that candidates maintain detailed campaign expenditure records from nomination to election day, while Section 78 requires expense submission to the District Election Officer within 30 days of result declaration.
• Companies Act, 2013: Companies operational for at least three years can contribute up to 7.5% of their average net profits from the past three years to political parties, creating substantial funding avenues.
• Foreign Contribution (Regulation) Act (FCRA), 2010: This act prohibits political entities from accepting foreign funds, gifts, or donations, safeguarding elections from external influences.

Challenges in Election Expenditure Management

India’s election financing system encounters several issues that threaten electoral integrity and equity:

• Absence of Political Party Spending Limits: Unlike 65 other countries, India does not impose spending limits on political parties. This unrestricted spending often disadvantages smaller parties and independent candidates, skewing competition in favor of wealthier national parties.
• Media and Digital Advertising Dominance: National and state-level parties allocate substantial funds to media advertisements and digital platforms like Google and Meta (Facebook), surpassing expenditures on traditional campaigning. This trend amplifies visibility disparities, particularly for financially limited candidates.
• Unregulated Third-Party Campaigning: Third-party campaigners operate outside regulatory oversight, raising concerns about unaccounted funds entering the election cycle. Such funds often carry implicit quid pro quo expectations, potentially compromising policymaking.

Proposed Reforms for Transparent and Fair Election Expenditure

To address these challenges, experts have proposed several reforms, including expenditure ceilings, enhanced oversight, and alternative funding mechanisms:

• Expenditure Ceilings for Political Parties: According to the Election Commission of India’s (ECI) 2016 report on electoral reforms, establishing spending limits for parties would create a more equitable election environment, reducing dependency on financial might over campaign ideas.
• Third-Party Campaigner Regulation: Similar to Australia, where third-party campaigners must register and disclose expenses, India could introduce formal oversight to curb unregulated election spending.
• State Funding of Elections: The Indrajit Gupta Committee (1998) and Law Commission (1999) recommended partial state funding for elections to reduce financial disparities, wherein the government would assist recognized political parties with certain campaign costs.
• Ban on Government Advertisements Near Elections: A pre-election advertising ban would prevent misuse of public funds for partisan gains, fostering a fairer competitive landscape among candidates.
• Transparent Financial Assistance: To prevent circumvention of spending limits, legislation could stipulate that political parties’ financial support to candidates count within individual expenditure ceilings.

Significant Electoral Reforms in India’s History

India’s electoral system has undergone continuous reforms, each enhancing transparency and credibility in the election process:

• Lowering the Voting Age: The 61st Constitutional Amendment (1989) reduced the voting age from 21 to 18 years, empowering India’s youth and promoting broader political engagement.
• Electronic Voting Machines (EVMs): Introduced experimentally in 1998, EVMs were fully implemented in Goa’s 1999 Assembly elections. They are manufactured indigenously by Bharat Electronics Ltd. and Electronics Corporation of India Ltd. to ensure efficiency and minimize electoral fraud.
• Model Code of Conduct (MCC): Under T.N. Seshan’s tenure as Chief Election Commissioner, the MCC was enforced rigorously, guiding candidate and party behavior to prevent undue influence by ruling parties.
• Voter-Verifiable Paper Audit Trail (VVPAT): Introduced in 2013, the VVPAT system provides verifiable paper records of votes, enhancing transparency and ensuring voters’ confidence in the electoral system.
• Appointment of Election Commissioners: The recent CEC and Other ECs (Appointment, Conditions of Service and Term of Office) Act, 2023 mandates appointments by the President based on recommendations from a Selection Committee comprising the Prime Minister, a Union Cabinet Minister, and the Leader of the Opposition.

Committees on Electoral Reform

Several committees have reviewed and recommended electoral reforms to enhance fairness and reduce corruption:

• Dinesh Goswami Committee (1990): Focused on improving electoral laws and curbing political malpractice.
• Vohra Committee (1993): Examined the nexus between crime and politics.
• Indrajit Gupta Committee (1998): Proposed state funding for candidates representing recognized political parties.
• Second Administrative Reforms Commission (2007): Addressed ethics in governance under Veerappa Moily’s chairmanship.

As India’s elections continue to grow in scale and cost, ensuring transparent and equitable electoral financing is critical to preserving democracy. Reforms, from capping party expenditures to regulating third-party campaigns, will be vital in ensuring fair competition and reducing the influence of financial power.