Nripendra Misra & Tannu Singh: How to reform campaign finance - I

Last Updated: Sat, Dec 29, 2012 18:40 hrs

In a parliamentary democracy citizens have the political rights — constitutionally ensured — to make all-important choices in government formation by participating in the election process. The role of political parties is critical, as they mobilise public support on their ideology, programmes and promises. The scale of support is manifested through the election process. Political parties also perform the important function of informing and educating citizens about the performance of the government, including their shortcomings.

The Representation of People Act (RPA), 1951 makes it mandatory for any association or body of individuals calling itself a political party to make an application to the Election Commission of India (ECI) for its registration. The sole reference to political parties in the Constitution of India features in the Tenth Schedule, which deals with the disqualification of a person from being a member of either House of Parliament or the Legislative Assembly/Council on grounds of defection. The RPA is the primary law regulating elections in the country. It is important to make appropriate provision in our Constitution and the RPA to facilitate effective regulation of parties by the ECI. We may perhaps refer to the German law which recognises the role of political parties in the formation of the political will of the people and requires internal democracy within the party and transparency in accounting assets and expenditure concerning party activity.

Political funding is crucial to sustain the activities of any political party. The expenditure relating purely to elections is campaign finance. Campaign funding is needed for conducting a competitive election campaign and to finance various election-related activities in a time-frame prescribed by the ECI. Campaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in the electoral contest.

Political parties raise funds from both private and public sources. The candidates in the electoral fray also raise funds, sometimes through questionable means like undisclosed corporate groups, organised mafia and other nefarious entities. Donations to political parties and candidates are often in the expectation of a quid pro quo, which invariably is not in the national interest. The obvious hazard is the unsavoury role of black money.

State funding of election campaigns is often dismissed with the argument that it will only be a drop in the ocean of corruption. But to allow this limitation to discourage any proposal on the subject might hamper the larger cause of democracy in the long run. Funding of election campaigns may not right away dismantle the already established nexus between political parties and their “donors”, but in the long term a step in this direction will surely have a role to play in snapping the ties of allegiance between these formidable forces pumping black money into the system.

State support to campaign funding has generated strong views in India, both for and against. Almost all the government committees formed on the issue of electoral reforms have deliberated on the issue of campaign funding but fell short of coming to any concrete policy consensus which could then be tested in terms of ground reality, through execution. There have been significant proposals on the subject from civil society members who have pro-actively advocated election funding.

The Public Interest Foundation (PIF), through in-house research, supplemented with discussions with like-minded NGOs and think tanks, has evolved a feasible minimalistic framework of campaign funding for adoption and expeditious implementation. The scheme, in tabular form, will be presented in part II of this article.

In accordance with the scheme, the administration of campaign funding will be entrusted to the ECI, which would operate the earmarked funds through an account designated for the purpose. The funds would be non-lapsable. The fund would be created through transfers from the Union government. The decision of the ECI on the subject of campaign funding will be final. The Commission needs to be delegated powers to frame rules under the RPA for the purpose. The pattern will be the same for Lok Sabha and Assembly elections. However, it would be advisable to implement the scheme on a pilot basis in next Lok Sabha elections.

Campaign funding, restricted to the elections only, will be disbursed by the ECI in two stages: The first disbursement, to the political party, immediately after the notification of the election date; and the second, to the candidates, in two installments — immediately after the acceptance of a valid nomination form and then after the election results.

The first disbursement of the fund to political parties will be restricted to recognised national and state parties. It will be regulated on a scale of payment of Rs 10 against each vote polled in favour of those party candidates whose deposit was not forfeited in the previous election. The total amount received by the political party as campaign funding would then be distributed to the prospective candidates who have been given the official symbol.

Next, all candidates whose nomination form has been found valid after scrutiny and withdrawal will receive their first installment, an entitlement based on the size of the total electorate in the constituency, assigning Rs 10 per voter in the electoral list. Each candidate would be given one per cent of the total value as the first installment. For the second installment the eligibility for reimbursement would be that it will be restricted to candidates who have secured at least one-sixth of the valid votes polled in the present elections. The payment to all such eligible candidates would be on the basis of Rs 10 per valid votes polled in favour of the candidate.

(The second part of this series will appear next week)
Misra is a former head of Trai and now at the Public Interest Foundation. Singh is also at the Foundation

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