EXPLAINED National

Election campaign funding by political parties

The money behind votes: Congress MPs protesting at Parliament complex against electoral bond issue in 2019.  

The story so far: With several Assembly elections coming up, one issue may need more attention than others. Elections are fought with huge funds nowadays. Estimates vary, but a candidate may spend in crores in just one constituency. This vital issue is neglected by voters in the noise and din of campaigns, leaders, celebrities and media coverage.

THE GIST
  • Voters vote for political parties so that they deliver benefits to the citizens. If election funds are obtained from other sources, the Governments in power are obliged to the funders more than the voters.
  • For instance, the Government Budget reports that in 2019-20 the loss to the Government on account of incentives to companies and reduction in duties and taxes was ₹2. 24 lakh crore. The voters do not know this.
  • Transparency in funding is absent after the introduction of Electoral Bonds. In spite of the CIC ruling, all political parties have refused to submit themselves to the transparency that comes with Right to Information. Limits on funding are also not well defined.

Why is this issue important for the voter?

Voters vote for candidates, political parties and leaders so that they deliver benefits to the citizens. If election funds are obtained from other sources, the Governments in power are obliged to the funders more than the voters. Government may take decisions that benefit the donors rather than the voters. Even if a rich candidate funds his own election, the focus is on recovering the investment made rather on public service.

Campaign funding reforms is one of the biggest issues in electoral reforms worldwide. Several countries like the U.S., the EU countries and so on have a set of laws to address this issue.

Does spending in elections affect public interest?

Publicly the Government never announces any scheme that is against public interest. Even if they do, the message to the public is always that it is for them. In recent times the most dramatic example is that of the Farm Laws which are being repealed. Many other decisions on infrastructure, roads, SEZs, incentives to corporates are not known to the public. For instance, the Government Budget reports that in 2019-20 the loss to the Government on account of incentives to companies and reduction in duties and taxes was ₹2. 24 lakh crore. The voters do not know this. But any funds required for public spending is known. If some of the income the Government lost could be recovered, the pattern of spending by the Government would change. Even schemes like MNREGA which many support and others oppose, had a budget allocation of less than ₹75,000 crore.

What are the remedies for this?

This subject has been studied at length by Government commissions and scholars. There is also much to learn from international experience. Broadly there are three classes of remedies. First is to make all election funding completely transparent so that voters know who is funding whom. Second is to prevent private interests from unduly influencing elections or Governments. This is done by a set of rules on limiting funding. Third is to try and have a more level playing field so that good politicians, candidates and parties with less funds also stand a chance of competing in elections. In the U.S. for instance, every citizen has the option of letting a small part of his taxes be used for election funding. This is done only with his or her consent.

What is the situation in India on election funding?

It is not yet an important issue with proper legislation. Transparency in funding is absent after the introduction of Electoral Bonds. Now citizens cannot know who is funding the political parties. In spite of the Central Information Commission (CIC) ruling, all political parties have refused to submit themselves to the transparency that comes with Right to Information. Limits on funding are also not well defined. For instance, there was a cap on how much funds a corporate can donate to a political party out of the profits it earns. That upper limit has been removed. There is no move towards a level playing field. Today as per information available with the EC and the Income Tax Department, and as reported by the political parties, 90% of the funds go to just one party. This does not allow for a level 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. The appeal to the Court is to make the Electoral Bonds completely transparent so that voters know where political parties are getting their funds from. Such information is available in all other leading democracies worldwide like the U.S. and the EU countries. But the Government refuses to amend the law and the case has not yet been heard in the Supreme Court. Another important issue is transparency in political parties. The CIC ruling was ignored by all political parties. This has now been challenged through another set of PILs in the Supreme Court. Here also the case has been admitted 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 to vote, and equally important, make an informed choice. This means gathering all relevant information about the candidate, funding, spending and so on. There are so many rumours floating around. Some of them are true and some are false. There is a lot of exaggeration as well. It becomes difficult to separate fact from fiction. But official websites of political parties, the Election Commission and some nonpartisan NGOs have information. It would also help if such information is shared widely with friends. Voting for any candidate or party that spends too much should be considered very carefully. It may go against the voter’s own interest.

Another long term solution is to fund political parties or one’s favourite candidate with small donations of ₹10 to ₹500. If the money is raised from voters then the winner will work for the people. Such large scale experiments have succeeded in hundreds of panchayat elections where elections were won by spending one hundredth of the other candidates.

This was because the voters funded the winning candidate.

Trilochan Sastry is a professor at IIM Bangalore and the chairman of the Association for Democratic Reforms


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Printable version | Jan 19, 2022 8:00:53 AM | https://www.thehindu.com/news/national/election-campaign-funding-by-political-parties/article38246756.ece

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