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Insights into Editorials: Limited Finance Limits Democracy

Insights into Editorials: Limited Finance Limits Democracy

12 October 2015


India’s campaign finance rules are frequently violated. It is now a well known fact that candidates in Indian elections grossly overshoot spending limits imposed by the Election Commission (EC). Such violations create deeper problems for representation and democracy at large. The major Indian political parties agree that spending limits in Indian elections, and the country’s campaign finance rules in general, are unreasonable and have called for a radical rethinking of campaign finance rules.

What has the Election Commission been doing?

To keep it in line with ground realities, particularly inflation, the EC has been increasing the spending limit from time to time. In the 2014 Lok Sabha elections, each candidate was allowed to spend a maximum of Rs.70 lakh in his or her constituency, representing an increase of Rs.30 lakh over the 2009 limit. However, such moves have not reduced the number of spending violations.

Challenges being faced by the political parties:

  • Current limit of Rs.70 lakh implies a total spending of just Rs.3-4 per individual in a constituency, which is a lot less than what the EC itself spends on conducting elections.
  • In terms of the time for campaigning, the period per constituency currently stands at just a few weeks, with restrictions on the resources a candidate can deploy, such as the number of vehicles that can be used. Many of these constituencies are rural, with about 10-15 lakh individuals spread across thousands of villages. Covering these villages poses a significant challenge for candidates.

What should be done?

To reduce the number of violations, the spending limits should be closer to the actual amount candidates need to campaign effectively, and that requires an exponential increase in the spending limits.

Who prescribes the campaign finance rules and why do we need it?

  • Election commission of India prescribes such rules. The authority of the election commission comes from the Representation of People Act, which states, “the total of the said expenditure shall not exceed such amount as may be prescribed.”
  • The primary objective behind the EC’s campaign finance rules is to level the playing field.

How such restrictive campaign rules infuse corruption into day-to-day politics?

Due to the official limits, candidates rely almost completely on unaccounted cash from undisclosed donors, which essentially renders all the other transparency initiatives of the EC redundant. Once in office, the candidates must find ways to repay their debts to these donors, and often do so by favouring them through policy changes or resource allocation. Thus the restrictive campaign finance rules infuse corruption into day-to-day politics.

According to The Economist:

“Money power has proven to be the more powerful by far. The EC sets limits on both fundraising and expenditures, but they are laughably ineffective. Political parties and candidates must break the rules in order to stand a chance of winning. This drives them into the arms of the criminal underworld, especially at the local level: that is where they find the men who have ready access to the “black money” that escapes the official banking sector, and the networks to disperse it.”

How such rules are leading to lower levels of representation?

The low limits on campaign finance have a large impact on the very essence of representation. For voters to make an informed choice, it is imperative that candidates and parties get their message across to each voter. For voters to make the right choices, they need to understand and respond to the candidates’ policy positions and sometimes interact with the candidates themselves. With the current rules, a law-abiding candidate would not have the resources nor the time to make that happen. This implies lower levels of representation and consequently greater arbitrariness in voting decisions, both of which are harmful to democratic accountability and democracy at large. Politicians then turn to middlemen to mobilise votes with the all too obvious negative consequences.


Electoral corruption in India is a product of the institutions and systems that we have put in place. The limits on election spending, along with the other restrictive campaign finance rules of the EC, perpetuates a tightly-guarded socialist mindset among many Indian policymakers, which often makes them wary of individual affluence. By relaxing these rules, the Election Commission will be able to not only increase compliance, transparency and representation in Indian elections, but also help align India’s politics with its new economics.

For more Points, Please refer this Document.