Rise in Election Expenses Limit

January 8, 2022

Election Commission of India (ECI) has enhanced election expenditure ceiling for candidates in assembly constituencies, ahead of assembly elections across five states.

Key Points

ECI enhanced election expenditure from the existing Rs 20 lakh to Rs 28 lakh and from Rs 28 lakh to Rs 40 lakh, in respective states and Union territories.
In case of parliamentary constituencies, limit has been increased from the current Rs 54 lakh to Rs 75 lakh, and from Rs 70 lakh to Rs 95 lakh.
These new figures will be applicable in all the upcoming elections.

Committee to study cost factors

Election Commission of India (ECI) had set up a committee to study the cost factors, and Cost Inflation Index 2014. Committee also factored into changing modes of campaigning, which has gradually shifted to virtual campaign.
Committee also recommended to:

Increase the expenditure limit after considering factors like demand from political parties
Increase in number of electors from 2014 to 2021 (up by 12.23 per cent) and
Increase in Cost Inflation Index from 2021 to 2022 (up by 32.07 per cent).

Background

ECI had done the last major revision in expenditure limit in 2014. The limit was further increased by 10 per cent in 2020.

What does rulebook say on expenditure?

Candidate are free to spend between Rs 50 lakh and Rs 70 lakh, depending on the state they are contesting Lok Sabha election from.
For all states, except Arunachal Pradesh, Sikkim and Goa, candidate can spend up to Rs 70 lakh on canvassing. Limit in these three states is Rs 54 lakh.
In Delhi, the limit is Rs 70 lakh while for other Union Territories, limit is Rs 54 lakh.

What is the need for a ceiling on expenditures?

Limits on campaign expenditure seeks to provide a level-playing field for candidates contesting the elections. It ensures that, winning probability of a candidate is independent of financial conditions. The 255th Report of the Law Commission on electoral reforms also is of the view that, unregulated or under-regulated election financing might lead to “lobbying and capture” in the elections.

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