The Election Commission of India (ECI) has recently increased the expenditure limit for Lok Sabha and Assembly constituencies candidates. This follows the formation of a committee in 2020 which studied election spending limits, and found a substantial increase in both the number of electors and the Cost Inflation Index (CII) since 2014.
Increase in Expenditure Limit
The ECI’s recent change sees the expenditure limit for Lok Sabha constituency candidates increased from Rs 54 lakh-Rs 70 lakh to Rs 70 lakh-Rs 95 lakh. Likewise, Assembly constituency candidates will see their spending limit raised from Rs 20 lakh-Rs 28 lakh to Rs 28 lakh- Rs 40 lakh. Notably, an enhanced amount of Rs 40 lakh would apply in Uttar Pradesh, Uttarakhand, and Punjab, while Goa and Manipur will follow the Rs 28 lakh limit.
Previously, the last significant revision in spending limits occurred in 2014. However, a slight 10% increase was also introduced in 2020 due to the Covid-19 pandemic.
Understanding The Cost Inflation Index (CII)
The CII is utilised to estimate yearly price increases of goods and assets due to inflation. The CII calculation aims at aligning the prices with the inflation rate, indicating that a rise in the inflation rate over time will result in price increases. The Central Government specifies CII through an official gazette notification.
Election Expenditure Limit: Defined and Regulated
The election expenditure limit represents the maximum amount a candidate can legally spend on their election campaign. Included expenses encompass public meetings, rallies, advertisements, posters, banners, vehicles and further advertisements.
The Representation of the People Act (RPA), 1951, mandates every candidate to maintain a separate and accurate account of all expenditure incurred from their nomination to the declaration of result. Candidates are required to submit their expenditure statement to the ECI within 30 days of the election completion.
Candidates who submit an incorrect account or exceed the expenditure cap can be disqualified by the ECI for up to three years under Section 10A of RPA, 1951. Further, there is no cap on a political party’s expenditure, but all registered political parties must submit a statement of their election expenditure to the ECI within 90 days of the election completion.
Debate On Election Spending Limits
The prescribed limit by the ECI often faces criticism as it is viewed as unrealistic compared to the actual expenditure incurred by candidates. In December 2019, a private member’s bill was introduced in Parliament with intentions to eliminate the cap on election spending by candidates. The proposal argued that the ceiling limits prompt candidates to under-report their expenditure, leading to counterproductivity.
Recommendations on State Funding
The 1998 Indrajit Gupta Committee suggested state funding would ensure a level playing field for poorer political parties and recommended that state funds should only be given to recognised national and state parties. Meanwhile, the 1999 Law Commission Report stated that state funding of elections is ‘desirable’ if political parties are banned from taking funds from other sources.
The National Commission to Review the Working of the Constitution (2000) did not support this idea but noted the need for an appropriate framework governing political parties before considering state funding.
Way Forward
State Funding of Elections could be the way forward – a system where the states bear the election expenditure of political parties contesting the Election. This approach could bring transparency to the funding process, limiting the influence of interested donors’ money, and potentially curb corruption.
