Funding Democracy

Changing the rules of campaign finance, one rupee at a time

01 January 2012

AS THE WORLD WATCHES the three-stage Egyptian presidential election, it is the political parties involved and the colour and splendour of their campaigns that occupy our minds. What we concentrate on during Indian elections is not all that different. During Lok Sabha or state assembly elections, the carnival-like atmosphere is in the forefront. We rarely wonder who pays for the posters, the cutouts, the party workers’ food, the cost of bring-out-the-vote volunteers, the consultants, the astrologers, the psephologists, the salaries of professional staff, the media expenses—the list goes on.

According to the interim budget that Finance Minister Pranab Mukherjee presented in the Lok Sabha in February 2009, a total of R11.2 billion was allocated for election expenses that year. Add to that accounted expenses—via political parties—as well as unaccounted expenses—via friends, the private sector and, simply, black money—and the actual costs most likely ran into two or three times that amount. For the upcoming 2014 Lok Sabha elections, expenses are predicted to reach R100 billion ($2-2.25 billion).

As costs rise, campaign finance laws have increasingly struggled to regulate spending. In 1969, Section 293A of the Companies Act 1956 disallowed corporate funding, only to have it reinstated in 1985. And, in 2011, the Maharashtra State Election Commission ruled that expenses that “major political leaders” incur on “the travelling of star campaigners” are exempt from the permissible expense limit. The Election Commission of India stipulates that campaign expenses for Lok Sabha seats in “bigger states” are to be capped at R2.5 million and for Assembly seats at R1 million. The candidates’ supporters, however, can spend “as much as they like” as long as they have the candidate’s “written permission”. Insofar as the political parties can account for their expenses, they too can spend over and above the sanctioned expenditure limit. Expenditure restrictions in elections are therefore disadvantageous for all those who seek to follow the law. Without creatively working one’s way around these restrictions, electoral campaigns stymie, desiccate and eventually shrivel into empty sloganeering for an audience of one.

Keywords: elections democracy public finance option regulation corruption public financing taxpayer funding expenses campaign finance India