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Insights into Editorial: Private member’s bill urges state poll funding

Insights into Editorial: Private member’s bill urges state poll funding


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.

Following reports that thousands of crores have gone into campaigning during the Lok Sabha polls, recently, Bengal Chief Minister has written to Prime Minister Narendra Modi seeking thorough “electoral reforms” and State funding of elections.

She has called upon the Prime Minister to explore possibilities of public funding of elections and build up a consensus through an all-party meeting.


Previous Government reports that looked at state funding of elections:

The Indrajit Gupta Committee (1998): It endorsed state funding of elections, seeing “full justification constitutional, legal as well as on ground of public interest” in order to establish a fair playing field for parties with less money. The Committee recommended two limitations to state funding, that the:

  • State funds should be given only to national and state parties allotted a symbol and not to independent candidates.
  • Short-term state funding should only be given in kind, in the form of certain facilities to the recognised political parties and their candidates.

The 1999 Law Commission of India report concluded that total state funding of elections is “desirable” so long as political parties are prohibited from taking funds from other sources.

This report also concurred with the Indrajit Gupta Committee that only partial state funding was possible given the economic conditions of the country at that time.

Additionally, it strongly recommended that the appropriate regulatory framework be put in place with regard to political parties before state funding of elections is attempted.

The National Commission to Review the Working of the Constitution, 2001, did not endorse state funding of elections but concurred with the 1999 Law Commission report that the appropriate framework for regulation of political parties would need to be implemented before state funding is considered.

The Second Administrative Reforms Commission (2008) report of “Ethics in Governance”:

It also recommended partial state funding of elections for the purpose of reducing “illegitimate and unnecessary funding” of elections expenses.


Benefits of State Funding in Elections:

As for the question, why should the public pay for political parties, one easy answer is if we want honesty and transparency in governance, this is a small price to pay. Hypothetically, a thousand crores of public money is peanuts compared to the end result of ensuring transparency in elections.

  • Public funding of elections will lead the Government to bear the expense of contesting the elections on behalf of the political parties. Political parties have multiple sources of funding and thus accountability and transparency becomes all the more important.
  • 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.
  • Public funding can increase transparency in party and candidate finance and thereby help curb corruption.
  • 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.
  • 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.


However, the concerns that need to be addressed:

There is a serious question to notice that 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.

Indian political parties, unlike western democracies, are not mere platforms to put some people into elective public office but are like standing armies that need continuous nourishment.

Thus, there are two aspects to the financing of the democratic process: the financing of elections from the panchayat level to Parliament, and the funding of political parties that is not election-specific but is an exercise in perpetuity for reasons enunciated above.


Way Forward reforms for State Funding:

Having a regulatory authority to receive authentic reports on political funding, scrutinise them and put them in the public domain.

We should create a national election fund to which corporates and others can be asked to donate.

Business houses can make donations to the parties they are beholden to and the funds will be disbursed according to your performance.

Complete disclosure of political funding and audit of political parties’ accounts have to be the first steps towards reforming political finance.

Holding simultaneous elections to the Lok Sabha as well as the State Assemblies. Citizen activism that keeps a close watch over campaigning.

A system for partial state funding should be introduced in order to reduce the scope of illegitimate and unnecessary funding of expenditure for elections.

Political parties should lead by example by coming under the ambit of RTI, especially with respect to their funding.



There is a need for an all-party meeting with the single agenda of public funding of elections in India, with the objective of rooting out what has been called the mother of all corruption.

By providing “floor level fund” to everyone, state fund scheme can be very helpful for smaller and newer political entrants. Transparency in funding is essential to ensuring clean, democratic governance.

Public funding, if implemented properly, can strengthen lower levels of party units to a situation where they can demand democratisation. It can therefore solve the problem of concentration of power in the hands of few and creation of dynastic politics.

In recent, newspaper reports which alleged Rs 60,000 crore had been spent in this year’s parliamentary elections and maximum expenditure remains unknown and could be much higher saying such reports will not do any good to India’s reputations as a democratic country.

Fearing that this amount may surpass Rs 1 lakh crore in the next general elections, therefore the issue should be addressed immediately.