State Funding of Elections in India
- State funding of elections has been suggested in the past in response to the high cost of elections and as a measure against corruption in the electoral process.
- Many of the government panels on electoral reforms have expressed their ideas on the issue
What is state funding of elections:
- This means that government gives funds to political parties or candidates for contesting elections.
- to make it unnecessary for contestants to take money from powerful moneyed interests so that they can remain clean
What is the status in India?
- While the political parties, on Commission and various body Election Commission and various bodies remain committed to state funding of elections, there has been little progress on this.
- Current state funding measures include provision of free time on public broadcasters for national parties in general elections and for registered state parties in state legislature elections.
- Besides this, national parties are provided some benefits like security, office space, utility subsidies etc.
- Another form of indirect state funding available in India is that registered political parties do not have to pay income tax, as laid down in S.13A of theIncome Tax
The key reports on state funding of elections are as follows:
- Indrajit Gupta Committee on State Funding of Elections (1998) Law Commission Report on Reform of the Electoral Laws (1999) National Commission to Review the Working of the Constitution (2001) Second Administrative Reforms Commission (2008) Law Commission of India Report on Electoral Reforms (2015)
Key Issues and Arguments Indrajit Gupta Committee on State Funding of Elections (1998)
- This committee endorsed Partial state funding of elections with some limitations given below.
- State funds should be given only to national and state parties allotted a symbol and not to independent candidates.
- In the short-term state funding should only be given in kind, in the form of certain facilities to the recognised political parties and their candidates.
- The state funding depends upon the economic condition of the country.
- At the time of report (1998) the economic situation of the country only suited partial and not full state funding of elections. Thus, as per this committee, only partial state funding was possible given the economic conditions of the country at that time.
- The Indrajit Gupta Committee had envisaged a phased introduction of public funding, given the economic conditions of the country in 1998, beginning with in-kind state subsidies (and no cash) such as rent-free office space, free telephone facilities, electoral rolls’ copies, loudspeakers, specified quantities of fuel, food packets, and airtime (both on state and private media).
- Gradually, the Committee envisioned a transition to full state funding, along with monetary provision via the creation of a central-governed Election Fund, whose funding would be provided by the Centre and the states together.
- However, the Committee excluded independent candidates from the benefits of state funding and required parties to submit audited accounts and tax returns to avail the benefits.
Law Commission Report on Reform of the Electoral Laws (1999)
- Total state funding of elections is “desirable” so long as political parties are prohibited from taking funds from other sources.
- The Commission concurred with the Indrajit Gupta Committee’s stand on partial funding.
- Appropriate regulatory framework be put in place with regard to political parties (provisions ensuring internal democracy, internal structures and maintenance of accounts, their auditing and submission to Election Commission) before state funding of elections is attempted
Arguments for public funding
- Public funding is a natural and necessary cost of democracy
- Public funding can limit the influence of interested money and thereby help curb corruption
- With public funding the State can encourage or demand changes in for example how many women candidates a party fields
- If parties and candidates are financed with only private funds, economical inequalities in the society might translate into political inequalities in government
- State funding may succeed only when it is total and not partial, because there is no guarantee that even after it was introduced, rich parties and candidates would not pump black money into campaigns to boost their chances of victory.
- Partial funding leaves scope for the party to use its funds for campaigns of individual candidates would fail to prevent the use of black money.
- Without favorable economy and without key reforms in other areas such as decriminalization of politics; introduction of inner party democracy; electoral finance reform; transparency and audit mechanisms; and stricter implementation of anti-corruption laws, there is no point moving towards state funding of elections.
- It would even encourage the mushrooming growth of parties as such grants would be a great incentive for even non-serious and frivolous organizations to call themselves as political outfits.
- It would mount expenditure on the Central and State Governments, State funding would be an additional financial burden on them.
- Some countries like Finland, Italy, Israel, Norway, Canada, the US, Japan, Australia and South Korea implemented the concept with mixed results. Italy, Israel and Finland, for instance, did not see any significant reduction in state expenditures due to public funding, despite the many checks and balances.
- In most of these countries, the argument against state intervention has been that political parties, being a free association of citizens, are independent entities, and that they cannot be bound by financial strictures. It’s an argument that can well be applied to India by anti-state interventionists
What is needed:
- According to Tarkunde committee certain facilities be made available to every constituency at government expense like giving printed cards with the registered number of voters and the polling booths where they may cast their vote, making available school rooms and halls for meetings, sending one communication to each voter free of postage and so on.
- State Funding and Inner Party Democracy State funding of elections makes little sense as long as inner-party democracy is missing in key political parties.
- A strong Lokpal has to be in place to ensure that corruption is reported and redressed. This will instil fear among prospective candidates who will no longer see their election as a money-making opportunity.