Cap on Election Expenditures by Parties

Why in news?

At a recent all-party meeting called by the Election Commission (EC), demand for a cap on election expenditure by parties was made.

What is the demand?

• All major parties, barring the BJP, pushed for a cap on election-related expenses by parties.
• Parties felt this could provide a level-playing field for everyone contesting elections.
• It ensures that a candidate cannot win only because he/she is rich.
• The BJP argued against, saying, all parties now mandatorily file their income and expenditure accounts with the EC.
• And so, there is no need for a ceiling on expenses during elections.
• The Law Commission also noted the ill-effects of unregulated or under-regulated election financing.
• It said this could lead to lobbying and capture, with mutual exchanges between big donors and political parties.

What is the current ceiling?

• The EC imposes limits on campaign expenditure incurred by a candidate, and not political parties.
• Expenditure by a Lok Sabha candidate is capped between Rs 50 lakh and Rs 70 lakh.
• This is depending on the state he/she is fighting from.
• In Assembly elections, the ceiling is between Rs 20 lakh and Rs 28 lakh.
• This includes money spent by a political party or a supporter towards the candidate’s campaign.
• However, it does not cover expenses incurred either by a party or the leader of a party for propagating the party’s programme.
• Also, candidates must mandatorily file a true account of election expenses with the EC.
• An incorrect account, or expenditure beyond the ceiling can attract disqualification for up to three years.
• This is as per Section 10A of The Representation of the People Act, 1951.

Are the ceiling limits effective?

• Candidates often complain that the EC’s limits are too low and unrealistic.
• But as many as 176 MPs (33%) had declared election expenses that were only less than 50% of the limit.
• This is as per an analysis of expenses in 2014 Lok Sabha elections.
• This clearly indicates that candidates may not be providing true accounts of their poll expenses to the EC.
• Evidently, candidates may be spending beyond their ceilings.

What is the EC's view?

• The EC has asked the government to amend the Representation of the People Act.
• It also demands amendment to Rule 90 of The Conduct of Elections Rules, 1961.
• This is to introduce a ceiling on campaign expenditure by political parties in the Lok Sabha and Assembly polls.
• EC considers that the limit would ensure a level playing field for all political parties.
• It would also curb the menace of unaccounted money in elections.
• It could significantly control the money power used by political parties and their allies.

Source: Indian Express