Public Funding Of Elections

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.

Why public funding is good? 

1. 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.
2.  Public funding can limit the influence of interested money and thereby help curb corruption.
3.  Public funding can increase transparency in party and candidate finance and thereby help curb corruption.
4.  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?

• 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.

Why it is difficult to go for public funding?

1.  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.
2. 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.
3. 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.
4.  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.

Various committees:

State funding of elections has been suggested in the past in response to the high cost of elections. A few government reports have looked at state funding of elections in the past, including:

• Indrajit Gupta Committee on State Funding of Elections (1998)
• Law Commission Report on Reform of the Electoral Laws (1999)
• National Commission to Review the Working of the Constitution (2001)
• Second Administrative Reforms Commission (2008)

The Indrajit Gupta Committee (1998) 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. Firstly, that state funds should  be given only to national and state parties allotted a symbol and not to independent candidates. Secondly, that in the 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 Committee noted that at the time of the report the economic situation of the country only suited partial and not full state funding of elections.

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. The Commission 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 (provisions ensuring internal  democracy,  internal structures and maintenance of accounts, their auditing and submission to Election Commission) before state funding of elections is attempted. “Ethics in Governance”, a report of the Second Administrative Reforms Commission (2008) also recommended partial state funding of elections for the purpose of reducing “illegitimate and unnecessary funding” of elections expenses.

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.