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Insights into Editorial: Campaigning on a budget



Insights into Editorial: Campaigning on a budget 



There is a considerable body of thinking in India that political funding is the nodal centre of unaccounted and illicit money transfers, and is the primary cause of corruption of the body politic. In this context, experts have suggested to go for publicly-funded elections.



According to a recent resort to the Right to Information Act, the Association for Democratic Reforms found that the total income of all political parties in India from 2004-05 to 2014-15 was ₹11,367.34 crore. The report revealed that 69%, of the income of political parties come from unknown sources, and this segment has been steadily on the rise.

Between 2004-05 and 2014-15 the average income of all the political parties in India was just over ₹1,000 crore, and comes to about ₹2,000 crore at present annually.


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. In some countries, state funding is extended to meeting some specific forms of spending by political parties, not confined to electioneering alone. Countries keep changing laws relating to state funding depending on experience and financial condition.


Why public funding is good?

  • 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.
  • Public funding can limit the influence of interested money and thereby help curb corruption.
  • Public funding can increase transparency in party and candidate finance and thereby help curb corruption.
  • If parties and candidates are financed with only private funds, economical inequalities in the society might translate into political inequalities in government.
  • 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?

There are divergent views on the efficacy of state funding of elections. Some have been dismissive of the 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. Therefore, opponents ask the government to channelize public resources towards and not diverted from such essential services.


Why it is difficult to go for public funding?

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. In the 2014 Lok Sabha elections, 263 members of the House claimed that they received a total of ₹75.59 crore from their parties, which averages out to roughly ₹28 lakh each. However, it is believed that an MLA spends on an average about ₹5 crore to get elected. The legal limit of ₹28 lakh is far off this mark.

  • 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.
  • 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.
  • 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.


Way ahead:

The key to regulate political funding lies in bringing down election expenditure and ensuring that it provides an opportunity to get the best public men and women to participate in the institutional life of Indian democracy. One of the ways suggested for the purpose is holding simultaneous elections to the Lok Sabha as well as the State Assemblies.

In the longer run, political patronage itself needs to be reined in. This calls for not merely a decentralisation of power in more substantive ways, but also reordering the relation between the legislature and executive.



It isn’t India alone that has been struggling with the idea of state funding of political parties; other democracies too have grappled with it. Some like Finland, Italy, Israel, Norway, Canada, the US, Japan, Australia and South Korea implemented the concept with mixed results. Italy, Israel and Finland, for instance, did not see any significant reduction in state expenditures due to public funding, despite the many checks and balances. In most of these countries, the argument against state intervention has been that political parties, being a free association of citizens, are independent entities, and that they cannot be bound by financial strictures. It’s an argument that can well be applied to India by anti-state interventionists.