Overview

Election expenditure has become a pressing issue in modern democracies, with growing concerns about its implications for political integrity and fair competition. In India, the skyrocketing costs of elections—both in terms of candidate spending and political party expenditure—pose significant challenges to electoral transparency, governance, and equity.

Current State of Election Expenditure in India

The total expenditure on elections in India has risen dramatically in recent years. For the 2024 Lok Sabha elections, the total expenditure by various political parties is estimated to reach around ?1,00,000 crores. This is a significant jump from the ?9,000 crores spent in the 1998 general elections. The expenditure per vote has also risen substantially, from ?25,000 in 1951 to ?1,400 in 2024.

The election expenditure limits for individual candidates are capped by the Election Commission of India (ECI):

• ?95 lakh for larger states (Lok Sabha constituencies)
• ?75 lakh for smaller states
• ?40 lakh for legislative assembly elections in larger states
• ?28 lakh for smaller states

However, these caps apply only to individual candidates. Political parties are not subject to any expenditure limits, allowing them to spend unlimited amounts during campaigns. This discrepancy leads to considerable financial disparities between well-funded national parties and regional or smaller parties, undermining the principle of equitable competition.

Global Comparisons: Election Financing and Spending Limits

Election financing varies widely across democracies, with countries like the United States and the United Kingdom adopting specific limits and regulations to curb excessive spending.

• United States: U.S. elections are financed largely through contributions from individuals, corporations, and Political Action Committees (PACs). Notably, Super PACs—which can raise and spend unlimited funds—have exacerbated concerns over money's influence on political outcomes. The 2024 U.S. presidential election is expected to cost around $16 billion (approximately ?1,36,000 crores).
• United Kingdom: Political parties are subject to strict expenditure limits. Each political party is allowed to spend £54,010 for each constituency, with an overall cap of £35 million for contests across all constituencies. This is aimed at ensuring that elections are not swayed by wealth alone and that smaller parties have a fighting chance.

Despite these measures, the United States still faces issues with unlimited corporate donations and the growing influence of wealthy donors, highlighting the complexities in curbing money in politics.

Challenges Posed by Rising Election Expenditure

The rising costs of elections present multiple challenges in India, exacerbating corruption, unfair competition, and political inequality.

a) Political Corruption and Influence

Large election expenditures are often funded by corporate donations and other private entities, creating a nexus between politicians and donors. This can lead to a quid-pro-quo relationship, where politicians may prioritize the interests of their donors over public welfare. This undermines public trust in the political system.

b) Unaccounted Money and Illegal Practices

A significant portion of the election expenditure is unaccounted for. The Centre for Media Studies (CMS) reports that in the 2019 general elections, around 25% of the total expenditure was spent on illegally distributing cash to voters. This practice, coupled with the absence of strict regulations on third-party campaigners, enables the use of black money in elections, further skewing the electoral process.

c) Uneven Playing Field

The absence of limits on party spending creates a situation where well-funded national parties have an inherent advantage over smaller regional parties and independent candidates. This financial inequality reduces the ability of under-funded candidates to compete based on ideas and merit rather than financial muscle. Furthermore, the growing influence of digital advertising and media campaigns has further widened this gap, with larger parties investing heavily in digital platforms like Google and Facebook, marginalizing those without the resources to do so.

Proposed Reforms to Address Election Expenditure Issues

To address these challenges, several reforms have been suggested by experts, committees, and the Election Commission. These reforms aim to curb excessive spending, ensure fairness, and increase accountability in the electoral process.

a) Capping Expenditure by Political Parties

There is a pressing need to introduce expenditure ceilings for political parties, in addition to those imposed on individual candidates. According to the 2016 Electoral Reforms Report by the Election Commission, political party spending should be capped at a level not exceeding the total expenditure limit for all candidates fielded by the party. This would level the playing field, ensuring that the influence of money is curtailed during elections.

b) State Funding of Elections

Recommendations for state funding of elections have been made by the Indrajit Gupta Committee (1998) and the Law Commission Report (1999). The state could partially finance the campaigns of recognized political parties, ensuring that candidates are not solely reliant on private donations. However, this reform faces challenges in terms of feasibility and implementation, especially regarding the mechanism for allocation of funds.

c) Regulation of Third-Party Campaigners

India should follow the example of countries like Australia, where third-party campaigners are formally registered and required to disclose their funding sources. This would help in tracking illegal contributions and ensure that election spending is transparent.

d) Ban on Government Advertisements During Election Periods

The use of government advertisements by the ruling party during the run-up to elections often leads to an uneven playing field. A ban on government-funded ads during the six months before elections would ensure that the ruling party does not gain an unfair advantage through public resources.

e) Strengthening Electoral Oversight

An independent electoral oversight body could be established to oversee campaign financing and ensure that all parties comply with spending limits. This would include measures to audit party finances, track donations, and verify spending claims, making it more difficult for parties to evade rules or use black money.

Conclusion: The Need for Comprehensive Electoral Reforms

The rising costs of elections in India present significant challenges to the democratic process. While expenditure limits for candidates exist, the lack of restrictions on party spending creates financial inequalities that undermine fair competition. The increasing role of corporate donations, illegal cash distribution, and unregulated third-party spending further complicates the situation.

To ensure fair elections, it is crucial that India adopts reforms such as capping political party expenditures, state funding of elections, and stronger oversight mechanisms. These steps, coupled with bipartisan political will, could help create a more equitable, transparent, and accountable electoral system, fostering greater public trust in the democratic process.

By addressing these challenges head-on, India can work toward an election system that encourages political participation based on ideas and policies rather than financial clout, ultimately strengthening the foundations of democracy.