ECI raises election expenditure limit

• Election Commission of India has raised the expenditure limit for candidates contesting elections.
• Expenditure limit for candidates of Lok Sabha constituencies increased from Rs 54 lakh-70 lakh to Rs 70 lakh-95 lakh.
• Spending limit for Assembly constituencies hiked from Rs 20 -28 lakh to Rs 28 -40 lakh.

New guidelines:

• The enhanced amount of Rs 40 lakh would apply in Uttar Pradesh, Uttarakhand and Punjab and ₹28 lakh in Goa and Manipur.
• Except a 10% increase in 2020 due to Covid-19 pandemic, last major revision in spending limits for candidates was carried out in 2014.
• ECI had formed a committee in 2020 to study the election spending limit in 2020.
• The committee found that there has been an increase in the number of electors and Cost Inflation Index since 2014 substantially.

Election Expenditure Limit:

• Maximum amount that an election candidate can legally spend for their election campaign which includes expenses on public meetings, rallies, advertisements, posters, banners, vehicles and advertisements.
• Section 77 of the Representation of the People Act (RPA), 1951, every candidate shall keep a separate & transparent account of all expenditure incurred between date on which they have been nominated and date of declaration of result.
• All candidates need to submit their expenditure statement to ECI within 30 days of completion of the elections.
• False account or expenditure beyond the cap can lead to disqualification of candidate by ECI for up to three years, under Section 10A of RPA, 1951.
• It has often been stipulated that these limits are unrealistic as actual expenditure incurred by candidate is much higher.
• December 2019 - a private member’s bill was introduced in the Parliament which intended to do away with the cap on election spending by candidates as ceiling on election expenses ends up being counterproductive by encouraging candidates to under-report their expenditure.
• Also, there is no limit on a political party’s expenditure, which is often exploited by candidates of the party.
• Registered political parties have to submit a statement of their election expenditure to the ECI within 90 days of the completion of the elections.
• Need for cap :To provide a level-playing field for everyone contesting elections whether rich or poor.

Related Committees and Commissions:

• Election Commission of India- 2004 report on “Proposed Electoral Reforms”.
• Goswami Committee on Electoral Reforms in 1990.
• Vohra Committee Report in 1993.
• Law Commission of India- 170th Report on “Reform of the Electoral Laws” in 1999.
• Indrajeet Gupta Committee on State Funding of Elections - 1998.
• National Commission to Review Working of Constitution in 2001.
• Second Administrative Reforms Commission in 2008.
• 255th report of Law Commission made several recommendations like:
• Limits on political contribution and party candidate expenditure.
• Disclosure norms and requirements.
• State funding of elections.
• Not yet accepted by Government.