Nripendra Misra & Tannu Singh: Reforming campaign finance - II

Last Updated: Sat, Jan 05, 2013 18:41 hrs

To assess the likely burden of state funding on the central exchequer, an empirical exercise taking the 2009 Lok Sabha elections as the reference point was undertaken. The stage one disbursement to recognised national and state political parties at the rate of Rs 10 against each vote polled in their favour (excluding the candidates whose deposits were forfeited in the previous election, i.e., the 2004 Lok Sabha elections), has been observed to be approximately Rs 364 crore. Based on the information, the disbursement to various recognised national and state parties ranged between Rs 103 crore (Indian National Congress) and Rs 5.4 crore (CPI). The second stage of payment in the scheme is in two parts. Candidates with valid nominations would have received an average of Rs 1.3 lakh and the total cost has been estimated at Rs 107 crore. The second instalment of the payment due to all candidates securing more than one-sixth of the valid votes has been estimated at Rs 418 crores for the whole country. Translated into average disbursement, it came to Rs 34 lakhs per candidate, except in a few constituencies, where the total electorate is very small. It is estimated that candidates of recognised national and state parties thus benefit by an average of about Rs 35-40 lakhs through the scheme, in addition to other existing privileges like free electoral sheet and a free time slot in Doordarshan for propagating party manifestos.

If any proposal on campaign funding is to avoid becoming another breeding ground for more unaccounted money flowing into the electoral process, it is critical to enforce the existing provision on contributions and disclosure, and strengthen them to adequately ensure that they are less susceptible to corrupt practices. Sections 77 and 78 of the Representation of the People Act (RPA), combined with section 10A, state the compulsory provisions for the maintenance and time-bound filing of election expenses by every candidate, failing which the candidate would be disqualified from contesting elections for a period of three years. It is also proposed that the scrutiny by the Election Commission of the correctness of accounts filed should be completed in 120 days, so as to minimise any form of uncertainty and political instability.

These provisions for disclosure of election expenses as detailed by the RPA (Sections 77, 78 and 10A) for individual candidates seem comprehensive, but the fact that it does not provide for a similar practice to be followed by political parties should be considered a major lacuna. Given that in our proposal a significant amount of the first stage of campaign funding will be made available through the political party organisation, stringent legal provisions necessitating disclosure on election expenses by party organisations are needed.

Under section 29C of the RPA, all registered political parties are legally bound to file an annual report with the Commission on all contributions received in excess of Rs 20,000. A similar legal requirement from individual candidates will further strengthen the cause of transparency on contributions. Moreover, the contribution limit requiring compulsory reporting by both individual candidates as well as political parties should be brought down to Rs 500, in order to facilitate additional contributions coming within the purview of accounted money. Thus, all contributions over Rs 500 may be accepted by cheque only. Contributions below Rs 500 may be accepted in cash, but all donations must provide details of the donor in a format that may be prescribed by the Commission. Parties which do not submit annual audited statements may be de-recognised and de-registered or both, as the case may be.

Additionally, every candidate should disclose his/her income and assets along with those of his/her family members as defined at the time of nomination. Every registered political party will be required to submit an annual audited financial statement. This is necessary and binding on them under Rule 3(xix)) of Article VIII of the Guidelines and Application Format for Registration of Political Parties under Section 29A of the RPA. Moreover, there shall be compulsory annual disclosure of income and assets of elected legislators.

The compulsory auditing of these accounts should be entrusted to auditors recommended by the Comptroller and Auditor General of India. In addition, all these accounts on election expenditure, contributions, assets as well as annual financial statements filed by both candidates and political parties submitted to the Election Commission should be put in the public domain within six months.

The ceiling on election expenditure is another important feature which deserves review. The election expenditure for a Lok Sabha election is Rs 1 crore to Rs 5 crore, as revealed informally by contesting candidates. Therefore, any ceiling on election expenditure will be theoretical and the elected representative begins his stint with a heap of lies. If ceilings on election expenditure are not officially regulated, the candidate may furnish information that is close to the truth. Earlier, a ceiling was considered necessary to discourage the role of black money and electoral rigging. It has not served the purpose. Therefore, the ceiling may be dispensed with. Once we have stricter norms for disclosure of expenditure and effective scrutiny of accounts, the objective will be met in a fair and transparent manner.

Misra is a former head of Trai and now at the Public Interest Foundation. Singh is also at the Foundation

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