Election Expenditure Limit and Monetary System in India

Without money, multi-party democracy cannot function. But there are certain risks of money power such as:

• Money creates uneven playing field and lack of fair competition
• Certain sections / parties face disadvantage and political exclusion
• Money Power results in tainted governance and undermining of rule of law

Influence of money in Indian elections is not a new phenomenon.   This was reported even during the Nehru era which is called golden era of Indian democracy. But in those times, influence of money was much limited in comparison to modern times. According to a February 2014 study carried out by Centre for Media Studies, the 2014 General Elections in India were estimated to incur an expenditure of Rs. 30,000 crore by Government, political parties and candidates, making it by far the most expensive electoral exercise in Indian history. If true, these figures would rival the USD 7 billion (approximately Rs. 42,000 crore) spent by candidates and parties in the 2012 US presidential elections.

What is NOT election expenditure?

Section 77 of the RoPA, 51 says that the expenditure incurred by leaders of a political party on account of travel by air or by any other means of transport for propagating programme of the political party is not considered to be the election expenditure. Further, any expenditure which is done for service of the Government and discharge of official duty is also not considered to be election expenditure.

The Expenditure Limit

The section 77 of RoPA 1951 mandates that every candidate at an election needs to keep a separate and correct account of all poll expenditures between the date on which he was nominated to date on which results are declared. Thus, legislation mandates for maintenance of records, but there is no such statutorily defined limit on poll expenditures. However, we have a ceiling on election expenses fixed by the Government of India. As per the current norms, the maximum limit of election expenses per candidate is as follows:

Lok Sabha Constituencies

• 70 Lakh for all States except Arunachal Pradesh, Goa and Sikkim.
• 54 Lakh for Arunachal Pradesh, Goa and Sikkim = 54.00 Lakhs
• 70 Lakh for NCT of Delhi
• 54 Lakh for other Union Territories.

Assembly Constituencies

• 28 Lakh for bigger states and NCT of Delhi
• 20 Lakh for smaller states and UTs.

These ceilings are fixed by the Union Government by order and NOT by election commission. Election commission however recommends the same to the government. The objective of these provisions is to encourage candidates to declare their poll expenses truthfully in the interest of greater transparency.

All Political parties sponsoring candidates for the elections are required to maintain day to day accounts for all election campaign expenses and submit the accounts to the Commission within 90 days of Lok Sabha Elections and 75 days of Assembly Elections.

Election Expenditure Monitoring System

The ECI has launched a robust Election Expenditure Monetary System mechanism to curb the influence of money power in elections. It was first implemented in 2010 in Bihar and subsequently taken to other states till recently in the General Elections. Some notable features of this mechanism include:

• Separate bank account by each contesting candidate for incurring all poll expenditures and incurring expenditure via cheques / DDs only.
• A complaint-monitoring cell in each district with 24X7 toll free number
• Flying Squads, Quick Response Teams, Static Surveillance Teams headed by Executive Magistrates to track illegal cash transaction or any distribution liquor or any items for bribing/ inducement of the voters.
• All airports in the State, major railway stations, hotels, farm houses, ‘hawala’ agents, financial brokers, cash couriers, pawn brokers and other suspicious agencies/persons engaged in movement of cash are to be kept under close surveillance by the Income Tax Department and necessary action to be taken as per the provisions of the Income Tax Act.
• Monitoring of suspicious cash withdrawal from any bank account during election process.
• Expenditure Observers are appointed for each district with senior officers from Income Tax Department, Customs & Central Excise Department and other finance & accounts services from outside the State to oversee the election expenditure by the candidates during election.
• Assistant Expenditure Observers are appointed for each constituency, to assist the Expenditure Observers.
• Shadow Observation Register is maintained in each constituency for each candidate to record major expenses observed during the election.
• Video Surveillance Team is constituted with camera persons and Govt. officials in each team to videograph major election campaign expenses.
• Accounting Team is constituted in each constituency to maintain Shadow Observation Register and the folder of evidence.
• Media Certification and Media Expenditure Monitoring Committee (MCMC) constituted to monitor both print and electronic media including cable network, social media etc. for election advertisement and suspected Paid News.
• Campaign for ethical voting.

The above measures have gone a long way in curbing pernicious effect of money power during the General Elections held in the last four years. But, there is still a lot of distance to be covered in this regard to eliminate the deep seated malady.