State Funding of Elections

What is State Funding of Elections? Are there any recommendations on the State Funding of Elections? What are its benefits? Are there any issues associated with the State Funding of Elections? To answer these questions, read further.

State funding of elections means that the government provides funding to political parties or candidates to participate in elections. 

The Election Commission of India recently informed the government about its opposition to the state funding of elections. The commission believes that it would be difficult to regulate candidate spending. It goes beyond what the state already permits.

Elections that are “state-funded” are those in which the government contributes money to political parties or candidates for them to run in elections.

Giving money directly to political parties or candidates is referred to as direct funding. Subsidies and other forms of access are examples of indirect funding.

Recommendations on State Funding for Elections

Several government studies have already examined state funding of elections, including

The Indrajit Gupta Committee on State Election Funding (1998)

• To create a level playing field for parties with limited resources, the Indrajit Gupta Committee recommended state funding of elections in 1998.
• The Committee advised placing two restrictions on state funding.
• Firstly, only national and state parties with a symbol should receive state funding. Independent candidates should not.
• Secondly, only recognized political parties and their candidates should get short-term state funding in kind in the form of specific infrastructure.
• The Committee noted that at the time of the report, the nation’s economic climate was only conducive to partial, not complete, public funding of elections.

Law Commission Report on Electoral Law Reform (1999)

• According to the Law Commission of India’s 1999 report, state funding of elections is “desirable” as long as political parties are not allowed to accept money from other sources.
• Additionally, it strongly recommended that the appropriate regulatory framework should be put in place.
• The Commission agreed with the Indrajit Gupta Committee that, given the economic situation of the nation at the time, only partial public assistance was practicable.

The National Commission to Review the Working of the Constitution, 2001 

• It did not endorse state funding of elections.
• But it agreed with the 1999 Law Commission report that there is a need for an appropriate framework for the regulation of political parties.
• It needs to be implemented before the state funding is taken into consideration.

Second Administrative Reforms Commission (2008)

• The Second Administrative Reforms Commission’s “Ethics in Governance” report from 2008 advocated partial state funding of elections to cut down on “illegitimate and excessive funding” of election costs.

Benefits of the State Funding of Elections

Candidates with questionable histories often succeed despite their reputations in large parts because they can afford to do so. State funding will put an end to this practice.

Since candidates won’t be overly dependent on the party for funding, parties will become more democratic internally.

State funding ensures that some influential people or groups don’t have undue influence over electoral processes.

A level playing field can enable the promotion of healthy competition by ensuring equality between large, well-known political parties and small parties and independent candidates.

It can break up the corporate-political connection that results from the need for funding to win elections. If political parties are not financially influenced by the huge corporate sector, citizen-centric decisions will be encouraged.

Equitable funding distribution among all candidates will ensure fairness in pre-election spending.

Public funding can increase transparency in the party and thereby help curb corruption.

When elections are held fairly, the chosen candidates maintain the principles of openness, responsibility, and honesty, among other things, bringing about good governance.

It is unreasonable to expect the majority of the population in a nation with a low per capita GDP to contribute money to political parties.

The argument against State Funding of elections

The amount of money spent by the government on important goals like nutrition, education, and health is incredibly small. Funds being diverted to finance elections may hinder state welfare programs and the development of the weaker sections.

The gap between political leaders and average citizens would widen as a result of state sponsorship.

Elections funded by the state won’t stop parties from lobbying and receiving illicit additional cash from the business world. This will lessen the purpose of state funding for elections.

It will be challenging for the state to finance elections with a fiscal deficit of GDP.

Public funding may influence many people to enter politics solely to receive state subsidies rather than run for office and engage in development work.

In India, elections are held on a massive scale, and keeping track of expenses in the digital age is exceedingly difficult. Procedures for funding elections need to be drastically changed.

The time is not yet right to choose public funding of elections unless fundamental reforms like decriminalizing politics, comprehensive electoral finance reforms, robust transparency, audit, and strict legal framework for the enforcement of anti-corruption laws are appropriately implemented.

Way forward

The limit of Rs. 2000 on cash contributions presents a chance for the infiltration of illicit funds into elections. This should be completely stopped. Even payments of Rs. 2000 should be made through bonds or online.

Additionally, a yearly audit by CAG will help to eliminate black money and secure the donors’ identities.

A close examination of election expenses incurred by parties and candidates is required. For this reason, a separate regulatory body can be created.

The idea of a national election fund, as put forth by the former chief election commissioner T.S. Krishnamurthy, shall also be taken into account. This fund would allow contributions from all donors.

The money then goes to the parties according to the results of the elections or any other principle that all parties would agree upon.

To reduce “illegitimate and wasteful funding” of election costs, the 2nd ARC (2008 report) suggested partial state funding of elections.

However, the focus should be on strictly enforcing the current restrictions. And limiting the use of black money in elections to maintain free and fair elections until all aspects of State finance have been addressed.

Article written by Chetna Yadav.