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Mains Articles

Should elections in India be state-funded? [Mains Article]

The success of state funding depends on a strong regulatory framework, stringent punishments, a quick and effective judicial system, an alert and demanding electorate, a broad consensus on political ethics—all of which we woefully lack.
By IT's Mains Articles Team
September 20, 2017

Contents

  • Why in news?
  • What is state or public funding of elections?
  • Background
  • What have various commissions and committees said about this?
  • The foreign experience
  • State funding exists in India!
  • Election Commission of India not in favour of state funding of elections. Why?
  • Arguments for state or public funding
  • Arguments against introducing state funding
  • What need to be done to make possible state-funding of elections?
  • Conclusion

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GS (M) Paper-2: “Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.”

 

Why in news?

  • Recently, Former Chief Election Commissioner (CEC) T S Krishnamurthy has pitched for state-funding of elections, and banning the use of funds by political parties for polls, as part of electoral reforms.

iastoppers T S Krishnamurthy

What is state or public funding of elections?

  • State or public funding of polls imply the government providing funds to parties and candidates to fight elections, replacing the existing system of ploughing in private or party funds for the job.
  • The idea of publicly-funded polls is designed to reduce corruption or inducements. It is also meant to reduce undue corporate influence on politicians.

Background:

  • In recent past, the Election Commission has told a parliamentary committee that it does not support state funding of elections but instead seeks “radical” reforms in the way funds are spent by political parties.

What have various commissions and committees said about this?

Some major reports on state funding include those given by the Indrajit Gupta Committee on State Funding of Elections (1998), Law Commission Report on Reform of the Electoral Laws (1999), National Commission to Review the Working of the Constitution (2001) and the Second Administrative Reforms Commission (2008).

  • Except for the 2001 report, all other recommended partial state funding only, given the economic situation of the country.
  • The 1998 report said that state funds should be given only to registered national and state parties and that it sould be given in kind only.
  • The 1999 report concurred with this but also recommended first putting a strong regulatory framework in place including internal elections, accounting procedures etc.
  • The 2001 report said that first a regulatory framework needs to be established before thinking about state funding.

The foreign experience:

  • However, experience in democracies such as France, Germany, Denmark, Israel, Italy, Finland, and Australia, among others, has shown that public funding does not necessarily reduce the expenditure of political parties.
  • The principal point against state funding in these countries is that a political party is a free association of citizens and should demonstrate its independent and financial viability.
  • Moreover, even partial funding leaves a huge scope for candidates to pump in black money to boost chances of their victory. State funding also means additional financial pressure on the state.

iastoppers State funding

State funding exists in India!

  • Already, some form of state funding exists in India, which includes free air time on public broadcasters, the provision of security, office space, utility subsidies and, the biggest advantage, the exemption of registered parties in India from paying income tax, as laid down under section 13A of the Income Tax Act.
  • But all this talk of state funding may not go down well with the EC.

iastoppers_statefunding

Election Commission of India not in favour of state funding of elections. Why?

  • The Election Commission is not in favour of state funding as it will not be able to prohibit or check candidates’ own expenditures or expenditures of others over and above that which is provided by the state (government).
  • The EC’s view is that for addressing the real issues, there have to be radical changes in the provisions regarding receipt of funds by political parties and the manner in which such funds are spent by them so as to provide for complete transparency in the matter.
  • The EC said that in view of the high cost of election campaigning in terms of media advertisements and public rallies, use of “big money” in politics is a major concern.
  • The EC also said that if wealthy individuals and the corporate pay to the political party or the candidate in order to make them listen to them, this undermines the core principles of democracy and transfers the economic inequality to political inequality.
  • The EC opined that the time was not ripe to go for state funding of elections in the country unless “radical reforms” like de-criminalisation of politics in a democracy in parties, holistic electoral finance reforms, robust transparency and audit and strict legal regime for enforcement of anti-corruption laws.

Arguments for state or public funding

  • Political parties and candidates need money for their electoral campaigns, to keep contacts with their constituencies, to prepare policy decisions and to pay professional staff. Public funding is a natural and necessary cost of democracy.
  • Public funding can limit the influence of interested money and thereby help curb corruption.
  • With public funding, the State can encourage or demand changes in for example how many women candidates a party fields.
  • Public funding can increase transparency in party and candidate finance and thereby help curb corruption.
  • If parties and candidates are financed with only private funds, economical inequalities in the society might translate into political inequalities in government.
  • Political parties and candidates need support in meeting growing costs of campaigning.
  • In societies with high levels of poverty, ordinary citizens cannot be expected to contribute much to political parties.

Should elections in India be state-funded

Arguments against introducing state funding:

  • Why should a taxpayer be forced to contribute to political parties he does not support? The question acquires even more relevance now that NOTA is an option available to a voter.
  • Is it legitimate and morally sound to give scarce resources to a miniscule class who practise the profession of politics, while denying it to other professions?
  • It is antidemocratic as, by favouring the established political parties, it protects the status quo and acts as an entry barrier for new parties. (The Indrajit Gupta Committee had recommended that funding be denied to independents).
  • The economic arguments against state funding are stronger. The main objection is—in a resource-starved country where 300 million live below the poverty line and where the average per capita income is $1 a day, is it equitable to give such humongous sums of money to an elite class? Limited resources should be utilised for the welfare of the largest number.
  • The justification for and the appropriateness of state funding depend on the economic conditions in a country and India is certainly not in a position where it can afford this luxury.
  • The experience of other, more developed countries with more effective legal systems has demonstrated that state funding neither prevents parties from raising funds from corporates, nor does it reduce election expenditure.
  • It actually makes elections more expensive because parties pocket government funds and continue to raise private funding clandestinely (further disadvantaging the relatively newer or more honest candidates)!
  • Public funding increases the distance between political elites (party leadership, candidates) and ordinary citizens (party members, supporters, voters)

What need to be done to make possible state-funding of elections?

T S Krishnamurthy mooted creation of a national election fund to which companies and individuals can contribute.

He proposes that

  • There should be a national election fund to which companies and individuals can contribute for which 100 per cent tax exemption should be given. Such funds can be used for the state-funding of elections.
  • The move would ensure that there is no nexus between corporates and political parties.
  • There can be an all party meeting who can decide how to use the fund for various elections.
  • Once a national election fund is set up, the use of funds by any political party for elections must be banned.
  • There are lot of loopholes in law as now there is a ceiling on election expenditure only for candidates, and not for political parties. That’s the reason why no party should be allowed to receive funds, except by its own members, and no party should spend money on elections.
  • An election should be conducted by the funds collected under the national election fund by the election commission.
  • There is a need for a separate law for political parties, framing proper regulation and overseeing and monitoring them including their internal elections and financial management.
  • Criminals should be disqualified if a charge sheet is framed by a court, not by police, in respect of offences punishable with five years and more of imprisonment.

Conclusion:

  • The success of state funding depends on a strong regulatory framework, stringent punishments, a quick and effective judicial system, an alert and demanding electorate, a broad consensus on political ethics—all of which we woefully lack.
[Ref: Economic Times, The Hindu, Indian Express, etc.]

 

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