Election campaign funding by political parties

the story So Far: With multiple assembly elections coming up, one issue may require more attention than others. Elections are fought with huge funds these days. Estimates vary, but a candidate can spend in crores in just one constituency. This important issue is neglected by the voters in the din of election campaigns, politicians, celebrities and media coverage.

Why is this issue important to the voter?

Voters vote for candidates, political parties and leaders so that they can benefit the citizens. If electoral money is obtained from other sources, the governments in power are bound to ask for more money from the voters. The government can take decisions that benefit the donors rather than the voters. Even if a wealthy candidate funds his election, the focus remains on recovering investments made in public service.

Campaign funding reform is one of the biggest issues in electoral reforms around the world. Many countries like US, EU countries and so on have a set of laws to address this issue.

Does spending in elections affect public interest?

The government never publicly announces any such scheme which is against the public interest. Even if they do, the message to the public is always that it is for them. The most dramatic example in recent times is of agricultural laws being repealed. Many other decisions on infrastructure, roads, SEZs, incentives to corporates are not known to the public. For example, the government budget reports that the loss to the government was ₹2 in 2019-20 due to incentives to companies and reduction in duties and taxes. 24 lakh crore. The voters do not know this. But just about any money needed for public spending is known. If some of the government’s lost income can be recovered, the way the government spends will change. Even schemes like MGNREGA, which many support and others oppose, had a budget allocation of less than ₹75,000 crore.

What are the remedies for this?

The subject has been studied in detail by government commissions and scholars. There is much to be learned from international experience as well. There are broadly three classes of treatment. The first is to make all election funding completely transparent so that voters know who is funding whom. The second is to prevent private interests from unduly influencing elections or governments. This is done by a set of rules limiting funding. The third is to try and have a more level playing field so that even good politicians, candidates and parties with less money get a chance to compete in elections. In the US, for example, each citizen has the option of allowing a small portion of his taxes to be used for election donations. This is done only with his consent.

What is the status of election donations in India?

This is not yet a significant issue with proper legislation. Transparency in funding has been absent since the introduction of electoral bonds. Now citizens cannot know who is funding political parties. Despite the decision of the Central Information Commission (CIC), all political parties have refused to submit themselves to the transparency that comes with the Right to Information. Funding limits are also not well defined. For example, there was a limit on how much of the profits a corporate could donate to a political party. That upper limit has been removed. There is no step towards a level playing field. As per the information available with the Election Commission and the Income Tax Department today, and as reported by political parties, 90% of the funds go to just one party. It does not allow an even playing field. Another important issue on electoral funding is that of electoral bonds. Some Public Interest Litigations (PILs) have been filed and even admitted in the Supreme Court. There is an appeal to the court that electoral bonds should be made completely transparent so that the voters know from where the political parties are getting their funds. Such information is available in all other major democracies around the world such as the US and the countries of the European Union. But the government refused to amend the law and the matter is yet to be heard in the Supreme Court. Another important issue is transparency in political parties. The decision of the CIC was ignored by all the political parties. It has now been challenged in the Supreme Court through another set of PILs. Here also the matter has been accepted but no hearing has taken place. Such transparency is there in all other countries.

What can I do as a citizen and voter?

First and foremost is voting, and just as important, making an informed choice. This means gathering all relevant information about the candidate, funding, expenses, etc. There are many such rumors floating around. Some of them are true and some are false. There is a lot of exaggeration in this. It becomes difficult to separate fact from fiction. But the official websites of political parties, the Election Commission and some non-partisan NGOs have information. It would also help if such information was shared widely with friends. Voting for any candidate or party that spends a lot should be considered very carefully. This may go against the voter’s own interest.

Another long term solution is to fund political parties or your favorite candidate with small donations of ₹10 to ₹500. If money is raised from the voters then the winner will work for the public. Experiments on such a large scale have been successful in hundreds of panchayat elections where elections were won by spending one-hundredth of other candidates.

This happened because voters gave money to the winning candidate.

Trilochan Sastri is Professor at IIM Bangalore and President of Association for Democratic Reforms