State funding of elections refers to parties and candidates receiving financial support from the public exchequer/state budget instead of relying solely on private donations.

Need for State Funding

• Currently, there are no limits on campaign spending or mandatory disclosures of funds.
• Private funding allows wealthy donors and corporations to influence party policies,
• fostering cronyism and policy capture.
• Financial disparities give wealthier candidates a competitive edge, leaving those with limited resources, but good intentions, unable to conduct similar campaigns.
• Though limits exist for individual candidates (often violated), political parties are not subject to spending caps, promoting wasteful expenditures and manipulating electoral outcomes.
• Unchecked funding practices, like vote-buying, risk undermining electoral integrity and public trust.

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Challenges of State Funding

• Public funding for campaigns increases the financial burden on the state.
• There is a risk of misuse, where some candidates may not genuinely contest elections but pocket the funds, leading to wastage of public money without proper oversight.
• State funding could divert resources away from essential services, particularly in a developing country like India, where resources are needed for infrastructure and development.
• Allocation criteria could be biassed, favouring certain parties over others.
• Restrictions on private funding may infringe on the rights of political expression.
• Over-reliance on government funding could compromise a party’s independence and autonomy.

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