Why is it in the news?

• The estimated expenditure for the S. presidential and Congressional elections in November 2024 stands at around $16 billion (₹1,36,000 crores).
• In comparison, India’s general election to the Lok Sabha in 2024 saw an expenditure of approximately ₹1,00,000 crores by various political parties, as reported by the Centre for Media Studies (CMS).

An Analysis

Spending Limits for Candidates in India

• In India, spending limits for candidates are set by the Election Commission (EC) and vary by state size. For the Lok Sabha, candidates in larger states have a limit of ₹95 lakh per constituency, while those in smaller states have a limit of ₹75 lakh.
• In Legislative Assembly elections, the spending cap is ₹40 lakh in larger states and ₹28 lakh in smaller states. However, these restrictions apply solely to individual candidates; there are no spending limits on political parties during elections.

International Standards for Election Financing

Election financing methods differ internationally:

The U.S.

• Elections are primarily funded through contributions from individuals, corporations, and political action committees (PACs). While there are caps on individual and PAC contributions to candidates, U.S. Supreme Court rulings allow unlimited spending by Super PACs.
• For the 2024 U.S. elections, it is estimated that $5.5 billion will be spent on the presidential race and $10.5 billion on Congressional races, largely due to contributions from Super PACs and organizational donors.

The U.K.

• Here, the spending rules are more restrictive. Political parties can spend up to £54,010 per constituency, totalling £35 million if all constituencies are contested.
• Additionally, candidates are limited in their spending per constituency, with an average of £46-49,000 allowed during the long campaign period (starting five months before the House of Commons term ends) and £17-20,000 in the short campaign period following election announcements.

Challenges Posed by Rising Election Costs

• The increasing cost of elections poses significant challenges for democracies worldwide. High expenditures often lead to a dependency on large donations, fostering a close relationship between donors and elected representatives, which can result in expectations of favourable treatment.
• This also discourages well-intentioned citizens from entering politics, as it creates a financial barrier to entry. In India, candidates from major political parties frequently exceed prescribed spending limits, and without caps on political party spending, overall election costs remain unchecked.
• During the 2019 election, BJP and Congress declared official spending of ₹1,264 crores and ₹820 crores, respectively; however, CMS estimates show that around ₹50,000 crores were spent by various parties.
• According to CMS, 35% of this expenditure went toward campaigns and publicity, and 25% was illegally distributed to voters. The estimated 2024 election expenditure of ₹1,00,000 crores has intensified concerns over the role of money in politics.

Potential Reforms to Address Election Spending

To counter rising election expenses, several reforms have been proposed over the years:

• The Indrajit Gupta Committee (1998) and the Law Commission report (1999) recommended State funding for elections, wherein the government would partially cover the election costs of candidates from recognized parties. However, this proposal faces challenges in feasibility and implementation.
• Another approach, the idea of simultaneous elections, is suggested as a solution to curtail rising expenditures. This concept, while potentially cost-effective, poses challenges related to federalism and would require constitutional amendments.
• Additionally, unless illegal cash distribution is curbed, simultaneous elections alone may not significantly reduce election expenses.

Practical Steps for Reform

• Implementing effective reforms requires political will and bipartisan support. Based on the EC’s 2016 report on electoral reforms, three key measures are recommended to foster a fairer electoral environment.

1) First, an amendment is needed to mandate that any financial assistance provided by a political party to its candidate should fall within the candidate’s spending limits.

2) Second, a ceiling should be introduced for political party expenditures, set as the candidate’s expenditure limit multiplied by the number of candidates from that party.

3) Finally, additional judges should be appointed in High Courts to expedite election-related cases, serving as a deterrent against rule violations.

• Swift implementation of these reforms is essential to meaningfully curb election spending and promote transparency in the electoral process.