The Election Commission of India, or ECI, recently decided to congregate a committee. The purpose behind this decision is to closely inspect the issues surrounding the expenditure limit for an election candidate.
Mandate of the Committee
The appointed committee has the responsibility of evaluating any changes in the number of electors across different states and union territories. They are also tasked with reviewing alterations in the Cost Inflation Index (CII). These evaluations will help gain insight into the expenditure patterns exhibited by candidates during recent elections.
The Reason Behind the Move
Political parties have suggested, particularly during feedback to the commission, that the budget for campaigning in Bihar assembly elections should be increased. This is largely due to an increase in digital campaign expenses as a result of the Covid-19 pandemic. Following these requests, the Ministry of Law and Justice released an amendment to Rule 90 of the Conduct of Elections Rules, 1961, which effectively raised the expenditure limit by 10%.
History of Revisions
Limitations for election expenditure experienced their last revision back in 2014. Subsequently, Andhra Pradesh and Telangana saw the same changes in 2018 due to bifurcation. Since then, despite an increase in the electorate from 834 million to 921 million from 2014 to 2020, and a rise in the Cost Inflation Index from 220 to 301 in the same period, there has been no increment to the expenditure cap.
Understanding the Expenditure Limit
The term “expenditure limit” pertains to the maximum amount an election candidate can lawfully spend on their campaign. This includes costs for public meetings, rallies, advertisements, posters, banners, vehicles, and more. Every candidate, as per Section 77 of the Representation of the People Act (RPA), 1951, has to keep a separate and detailed account of all expenditure incurred throughout the duration of their campaign. Failing to adhere to these guidelines or exceeding the expenditure limit can lead to the ECI disqualifying the candidate for up to three years.
The Debate on Expenditure Limits
Questions have been raised about the realism of these expenditure limits, with some arguing that candidates typically end up spending much more. A private member’s bill in December 2019 aimed to remove the cap on election spending by candidates. The reasoning provided was that having a cap actually encourages candidates to under-report their expenses. However, it’s worth noting that there is no limit on a political party’s expenditure.
State Funding of Elections
In some systems, states cover the election expenditure of political parties. This method could potentially improve transparency in the funding process by reducing the influence of ‘interested donors’ and help reduce corruption. Various committees have given their recommendations on state funding, with some for and others against the idea.
Cost Inflation Index (CII)
The CII is a tool used to estimate the increase in prices of goods and assets over time due to inflation. The Central Government specifies CII by notifying it in the official gazette. An increase in the inflation rate over time naturally leads to a rise in the prices. The CII is calculated to match prices to the inflation rate.