State funding of elections aims to eliminate candidates’ reliance on vested interests, ensuring clean and fair elections. Various government reports have recommended partial state funding to promote transparency and reduce the influence of money in politics. As the world’s largest democracy, India needs a fair electoral funding system to maintain the integrity of its democratic process.
State Funding of Elections in India
Objectives, Historical Context, and Regulatory Framework
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- Definition: Using state resources to financially support political parties, ensuring a level playing field.
- Objective: To eliminate the need for candidates to rely on vested interests, ensuring clean elections.
- Goal: Promote fair and transparent electoral funding to maintain integrity in the democratic process.
- Historical Recommendations: Various government reports have explored state funding of elections:
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- Indrajit Gupta Committee (1998): Recommended partial state funding.
- Law Commission Report (1999): Supported partial state funding.
- National Commission to Review the Working of the Constitution (2001): No recommendation for state funding.
- Second Administrative Reforms Commission (2008): Advocated for partial state funding.
- Electoral Funding in India
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- Largest Democracy: India conducts the largest elections globally, necessitating a fair electoral funding system.
- Current Funding Mechanism: Electoral Bond Scheme (2018) was recently struck down by the Supreme Court for lack of transparency.
- Supreme Court Verdict (2024): Restored the pre-electoral bonds funding system, highlighting the need for alternative funding methods.
- Current Provisions: Tax exemptions under section 13A of the Income Tax Act and free airtime for national and state parties on public broadcasters.
- Regulatory Framework: The regulatory framework governing election funding includes laws such as the Representation of the People Act, 1951, and the Income Tax Act, 1961.
Benefits of the State Funding of Elections
| Reduces Corruption and Influences of Peddling |
- By State funding it helps to diminish the impact of money in politics which mitigates the risk of corruption and at the same time undue influence by wealthy individuals or interest groups.
- Therefore, the candidates who are relying on public funds have to engage less in quid pro quo arrangements with donors.
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| Equality and Fairness |
- It provides financial support to all eligible candidates which creates a level playing field.
- It reduces the influence of wealth and ensures that individuals with diverse backgrounds and ideas have an equal opportunity to participate in the political process.
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| Transparency |
- Due to disclosure requirements and transparency measures, it enhances accountability by ensuring that the public is informed about the sources of campaign funding and how it is spent.
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| Increased Civic Participation |
- It encourages more individuals to participate in the electoral process which may lead to a more diverse pool of candidates and increased representation of different perspectives.
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| Public Confidence and Trust |
- By this system it creates public trust in the political process.
- It makes the voter’s minds to perceive that elections are conducted fairly and their candidates are not unduly influenced by special interests, which ultimately enhances confidence in the democratic system.
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| More Focus is on Issues Rather than Fundraising |
- It helps the Publicly funded candidates to spend their time and effort on discussing and addressing important issues rather than constantly engaging in fundraising activities which will lead to a more informed and substantive political discourse.
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| Cost Savings for Candidates |
- It can help candidates by alleviating the financial burden associated with running for office, reducing the need for extensive personal wealth or reliance on private donors.
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| Accessibility for New Candidates |
- It makes it easier for new and emerging candidates to enter the political arena and can foster political competition as well as prevent the entrenchment of a political elite.
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Issues of State Funding Elections
| Allocation of Resources |
- Due to the ways of allocation for public funds can be a contentious issue. Questions may arise
- About the criteria for eligibility.
- The amount of funding provided to each candidate.
- The overall budget for the electoral process.
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| Concerns related to Free Speech |
- It may infringe on the principle of free speech, as it could involve restricting the ability of individuals or organisations to spend their money to support or oppose candidates and causes.
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| Impact on Political Parties |
- It could weaken the party influence and can lead to the rise of independent candidates who may not be as accountable to a party platform.
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| Risk of Bureaucracy |
- It may introduce administrative complexities and bureaucratic challenges.
- As the process of determining eligibility, distributing funds, and ensuring compliance can be resource-intensive and subject to errors.
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| Limited Funding and Competitive Disadvantage |
- If any candidate relies heavily on public funding then he will be at a competitive disadvantage compared to those who rely on private contributions, which deters qualified students from running for office.
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| Political Manipulation |
- If the process is not transparent and unaccountable, it may undermine the perceived fairness of the electoral system due to political manipulation or favouritism.
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| Dynamic Nature of Campaign Finance |
- The new form of campaigning such as new technologies, evolving campaign strategies, and emerging forms of political communication can challenge the effectiveness of traditional funding models.
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| Insufficient Impact on Corruption |
- It aims to reduce the influence of private money, it may not eliminate the potential for corruption entirely.
- Unscrupulous candidates could still find ways to exploit loopholes or engage in unethical behaviour.
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| Public Perception and Support |
- If voters perceive the system as flawed or unfair, it may undermine trust in the electoral process.
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| Diversity of Political Perspectives |
- It may not have a diverse representation of political perspectives and the criteria for eligibility and the rules governing the distribution of funds could inadvertently favour certain ideologies or types of candidates.
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Key Reports and Committees
| Dinesh Goswami Committee (1990) |
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- This committee on Electoral Reforms highlighted the need for transparency in election funding.
- It recommended that
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- The government should contribute to the funding of elections,
- Private donations should be made transparent.
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| Indrajit Gupta Committee (1998) |
- This Committee on State Funding of Elections recommended that
- Partial state funding of elections to reduce the influence of money power.
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| Finance Acts (2016 and 2017) |
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- The amendments were made to the Finance Acts in 2016 and 2017 and the changes made were
- The changes in the funding of political parties.
- Introduction of electoral bonds.
- The Electoral Bond Scheme(2018) was introduced to address concerns about transparency in political funding.
- However, it has also faced criticism for potential anonymity of donors.
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| Law Commission Report on Electoral Reforms (2018) |
- The Law Commission’s report recommended measures
- To regulate election expenditure.
- Address the use of black money.
- Enhance transparency in political funding.
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Suggestions
- Need of annual auditing: The CAG should conduct yearly auditing which will help to eliminate black money and secure the donors identities.
- Implementation of 2nd ARC Report: To reduce “illegitimate and wasteful funding” of election costs, this report suggested partial state funding of elections.
- Demand of Regulatory body: The election expenditure incurred by the parties and candidates should be examined by the proper regulatory body.
- Changes should be made in mode of contributions: 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.
- Creation of National Election Fund: The idea of a National Election Fund, had been given by former chief election commissioner T.S. Krishnamurthy, which shall also be taken into account, which allows contributions from all donors.
Conclusion
The state funding for elections is a complex and dynamic aspect of electoral systems, and it is subject to ongoing scrutiny and reforms to maintain the integrity of democratic processes.
- The regulations aim to strike a balance between allowing political participation and preventing corruption or undue influence in the electoral process.
- Limiting the use of black money in elections helps to conduct free and fair elections until all aspects of State finance have been addressed.
