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How Political Parties Manage the Election Expenditure

Posted by Admin on October 1, 2014 | Comment

From the day a candidate’s name is announced, the ball of poll expenditure starts rolling as fighting elections is an expensive affair. Sheer display of money power has been the trademark of Indian elections. The more the merrier. It takes years of experience and skills to manage the election expenditure on the part of political parties.

How Political Parties Manage the Election Expenditure

Rules as per the Election Commission for Election Expenditure

The recent amendment to the Rule 90 of the Conduct of Election Rules has increased the upper limit of expenses as applicable to candidates for Lok Sabha and Vidhan Sabha (Legislative Assembly) elections. According to the Election Commission (EC), each candidate is entitled to spend a maximum of Rs 70 lakh for Lok Sabha and Rs 28 lakh for the state elections. It’s mandatory for the candidate contesting in Lok Sabha elections to pay a security deposit of Rs 25,000. If the candidate fails to get one-sixth of the total votes polled, this amount gets forfeited.

The EC has also made it mandatory for the contesting candidates to file daily expenses.  Moreover, as per the EC’s mandate, candidates are required to open separate accounts for their poll expenses. While EC has set strict legal limits on the money a candidate can spend during the election campaign, the Supreme Court has imposed accountability on the political parties in a bid to cut down on extravagant campaigning.

Major Components of Poll Expenditure

When it comes to poll expenditure, the candidate’s financial commitment doesn’t end by paying security deposit. Rather, it starts from that point of time. The daily campaign expenses that a party has to bear include the cost of banners, pamphlets, and other promotional material. Apart from publicity items, the fuel expenses and vehicle rentals take up a major chunk of poll expenditure.

It requires money to hire manpower & resources, “bring crowd to the rallies”, and staff the polling booths on the day of the elections. Above all these, running ad campaigns is also a major component of poll expenditure. According to senior politicians, it’s “difficult to earmark a particular percentage of Rs 70 lakh under a specific category” since expenses vary based on several factors. One of them being the rival party’s ability to spend. In case the opponent decides to display the money power, the candidate on the other side can’t maintain a low profile.

Poll Expenditure Exceeds the Set Limit

It’s an open secret that most political parties exceed the poll expenditure limit set by the EC. The candidates admit that they spend more than Rs 2 crore in some cases to take care of all aspects of the campaigning. Stating that booth management is a very expensive affair, the politicians agree that offering money to the party cadres at the polling booths consume a large share of the budget.

Political observers are of the opinion that campaign expenditure for a national leader is always higher as compared to the other candidates. From making accommodation arrangements to security and transportation, parties incur huge expenditure to ensure that the event is a success. Another reason why Rs 70 lakh falls short of the demand is the rising trend of hiring people to attend campaigns and rallies. Moreover, meals are also arranged for the attendees.

It is not ruled out that the candidates give away money to community leaders or influential members of a constituency who have the capability to swing votes in their favour. However, all these expenses are deliberately hidden and not shown in the book of accounts. Since the election candidates violate the prescribed spending limits, most of their spending is not included in the expense statements submitted to EC.

They follow a unique practice to escape the attention of the election commission. While filing returns, the candidates disclose only those expenses that are within the comfort zone of the EC. The money spent on polling booth agents is hardly ever disclosed.  While the actual expenditure of public meetings goes beyond crores, the political parties downplay it by mentioning the expenses in lakhs.