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State poll funding

Topics covered:

  1. RPA related issues.

State poll funding


What to study?

For prelims and mains: State funding of elections- need, issues and feasibility, electoral reforms in general.


Context: Equating the expenditure limit on election expenses with prohibition, Congress MP Rajeev Gowda has moved a private member’s bill- Representation of the People (Amendment) Bill– in the Rajya Sabha that seeks removal of the limit and state funding of elections as part of reforms to the way polls are financed in India.


Why remove the expenditure Limit?

The limit on expenditure is seen as counter productive and only helped those with black money to bribe individual voters and crippled honest candidates.


What needs to be done- proposals made in the bill?

  1. Instead of imposing a limit, transparency should be brought in. The candidates should be allowed to legitimately raise funds.
  2. Ensure state funding– The bill proposed a National Election Fund, under which each political party could be allotted funds according to their recent electoral performance.


What is state or public funding of elections?

This means that government gives funds to political parties or candidates for contesting elections.

Its main purpose is to make it unnecessary for contestants to take money from powerful moneyed interests so that they can remain clean.


Why public funding is good?

  1. Political parties and candidates need money for their electoral campaigns, to keep contacts with their constituencies, to prepare policy decisions and to pay professional staff. Therefore, public funding is a natural and necessary cost of democracy.
  2. Public funding can limit the influence of interested money and thereby help curb corruption.
  3. Public funding can increase transparency in party and candidate finance and thereby help curb corruption.
  4. In societies where many citizens are under or just above the poverty line, they cannot be expected to donate large amounts of money to political parties or candidates. If parties and candidates receive at least a basic amount of money from the State the country could have a functioning multi-party system without people having to give up their scarce resources.


Why are some people opposed to this idea?

  • Those against this idea wonder how a Government that is grappling with deficit budgets, can provide money to political parties to contest elections.
  • They also warn that state funding would encourage every second outfit to get into the political arena merely to avail of state funds.
  • Also, given that state expenditure on key social sectors such as primary healthcare is “pitifully small”, the very idea of the Government giving away money to political parties to contest polls, is revolting.


Why it is difficult to go for public funding?

  1. The funds that a political party advances to its party candidates in an election vary from one candidate to another, and there is much variation across political parties in this regard.
  2. Assuming that there are five contending candidates in a constituency, and even if each one of them does not spend as much, but just half of their elected counterpart, an amount of about ₹15 crore will be spent in each constituency, which with about 4,215 MLAs in India works out to an about ₹13,000 crore per annum.
  3. While the legal limit that a Lok Sabha candidate can spend is ₹70 lakh, a victorious candidate on an average does not spend less than ₹10 crore for the purpose. Suppose we assume again an average of five candidates per constituency, and halving the amount to losers, about ₹30 crore will be spent in each Lok Sabha constituency, and given 543 members of the Lok Sabha, about ₹3,300 crore per annum.
  4. Then there are elections to the Upper Houses, both at the Centre and in some States, and the local governing bodies. Hence, it is argued that public funding places unnecessary burden on the exchequer.


Sources: the Hindu.