State Funding of Elections in India: Objectives, Benefits & Key Challenges

State Funding of Elections in India: A Deep Dive into Objectives, Benefits, and Challenges

The health of any democracy is intricately linked to the fairness and transparency of its electoral process. In India, the world's largest democracy, the issue of election financing has been a subject of intense debate and scrutiny for decades. The enormous expenditure involved in contesting elections, coupled with concerns about the influence of money power and lack of transparency in political funding, has brought the concept of state funding of elections to the forefront of discussions on electoral reforms. This blog post aims to provide a comprehensive analysis of state funding of elections in India, exploring its foundational concepts, objectives, potential benefits, inherent challenges, historical context, constitutional and legal dimensions, relevant judicial pronouncements, and contemporary relevance.

Table of Contents:

1. Introduction: Understanding State Funding of Elections
2. Foundational Concepts: What Does State Funding Entail?
   • Direct vs. Indirect Funding
   • Full vs. Partial Funding
3. Objectives of State Funding of Elections
4. Potential Benefits of State Funding
5. Challenges and Concerns Associated with State Funding
6. Historical Background and Committee Recommendations
   • Dinesh Goswami Committee (1990)
   • Indrajit Gupta Committee (1998)
   • Law Commission of India Report (1999)
   • National Commission to Review the Working of the Constitution (NCRWC) (2001)
   • Second Administrative Reforms Commission (ARC) (2008)
   • Law Commission Report on Electoral Reforms (2015)
7. Constitutional and Legal Framework
   • Relevant Constitutional Provisions
   • Representation of the People Act, 1951
   • Income Tax Act, 1961
   • Foreign Contribution (Regulation) Act, 2010
8. Landmark Judgments and Case Laws
   • Common Cause v. Union of India (1996)
   • Association for Democratic Reforms v. Union of India (2024) - The Electoral Bonds Case
9. Current Relevance and Evolving Interpretations
   • The Electoral Bonds Scheme and its aftermath
   • The Election Commission of India's Stance
10. Comparison with Global Systems (Brief Overview)
11. Conclusion: The Path Forward
12. Interactive Q&A / Practice Exercises

1. Introduction: Understanding State Funding of Elections

State funding of elections, in its simplest terms, refers to a system where the government provides financial assistance to political parties and/or candidates to cover their election-related expenditures. The core idea is to reduce the reliance of political actors on private donations, which are often seen as a source of corruption, undue influence, and an uneven playing field in the electoral arena. The overarching goal is to enhance transparency, accountability, and fairness in the democratic process.

The debate around state funding in India is not new. It has been a recurring theme in discussions on electoral reforms for several decades, with various committees and commissions examining its feasibility and desirability. The astronomical costs of contesting elections in India, often running into crores of rupees even for a single constituency, have made the issue even more pertinent. This high cost of elections creates a significant barrier to entry for individuals and parties with limited financial resources, potentially skewing the political landscape in favour of the wealthy and well-connected.

2. Foundational Concepts: What Does State Funding Entail?

State funding of elections can take various forms, broadly categorized as direct or indirect, and full or partial.

• Direct Funding: This involves the government providing monetary assistance directly to political parties or candidates. This could be in the form of grants, subsidies, or reimbursement of certain expenses.

• Indirect Funding: This refers to non-monetary support provided by the state. Examples include:

  • Free or subsidized airtime on public broadcasters (like Doordarshan and All India Radio) for election campaigns.
  • Free supply of copies of electoral rolls.
  • Provision of office space, utility subsidies, and security for recognized national parties.
  • Tax exemptions for registered political parties under Section 13A of the Income Tax Act, 1961.

• Full Funding: In a system of full state funding, the government would bear all legitimate election expenses of political parties and candidates, and private funding would ideally be completely prohibited or severely restricted. The Law Commission of India (1999) considered total state funding desirable, provided political parties refrained from accepting funds from other sources.

• Partial Funding: This involves the government covering a portion of the election expenses, with political parties and candidates still permitted to raise funds from private sources, albeit under stricter regulations and transparency norms. Most committees in India have leaned towards recommending partial state funding, at least initially, citing the country's economic conditions and the complexities of implementing a full funding model.

Figure 1: Types of State Funding of Elections

graph TD
    A[State Funding of Elections] --> B{Funding Mechanism};
    B --> C[Direct Funding (Monetary Assistance)];
    B --> D[Indirect Funding (Non-Monetary Support)];
    A --> E{Scope of Funding};
    E --> F[Full State Funding];
    E --> G[Partial State Funding];

    C --> C1[Grants to Parties/Candidates];
    C --> C2[Subsidies for Campaign Activities];
    C --> C3[Reimbursement of Expenses];

    D --> D1[Free/Subsidized Media Access];
    D --> D2[Free Electoral Rolls];
    D --> D3[Office Space/Utility Subsidies];
    D --> D4[Tax Exemptions];

Explanation of Figure 1: This flowchart illustrates the primary ways state funding can be categorized. It distinguishes between direct monetary aid and indirect support in kind, and also between systems where the state covers all election costs (full funding) versus a portion of them (partial funding). Understanding these distinctions is crucial for evaluating different proposals for state funding.

3. Objectives of State Funding of Elections

The proponents of state funding argue that it can achieve several critical objectives aimed at strengthening the democratic fabric:

• Enhancing Transparency and Accountability: By making the state the primary financier, or a significant one, it is argued that the sources and utilization of election funds would become more transparent and subject to public scrutiny.
• Curbing Corruption and the Influence of Black Money: A major objective is to reduce the dependence of political parties on large, often undisclosed, private and corporate donations, which can lead to quid pro quo arrangements, policy capture, and the infusion of illicit wealth ("black money") into the electoral process.
• Creating a Level Playing Field: State funding aims to provide a more equitable contest where parties and candidates can compete based on their ideologies, policies, and public support, rather than on their financial muscle. This could potentially empower smaller parties and candidates from less privileged backgrounds.
• Reducing Reliance on Private Donors: This can free elected representatives to focus on public interest rather than catering to the interests of their financial backers.
• Strengthening Political Parties: Stable public funding could allow parties to focus on long-term policy development and organizational strengthening rather than perpetual fundraising.
• Promoting Fair Competition: Ensures that no undue advantage is gained solely due to superior financial resources.
• Encouraging Democratic Practices within Parties: With reduced dependence on a few large donors, internal party democracy might be strengthened.

4. Potential Benefits of State Funding

The introduction of a well-designed system of state funding could yield several significant benefits:

• Increased Transparency in Political Finance: Public funds come with inherent accountability mechanisms, making it easier to track how money is being spent in elections.
• Reduced Political Corruption: By diminishing the role of private donations, especially large anonymous ones, the scope for corruption and crony capitalism could be significantly curtailed.
• Fairer Electoral Competition: It could help democratize the electoral process by enabling parties and individuals with genuine public support but limited financial means to compete effectively.
• Greater Focus on Issues and Policies: Candidates and parties might spend more time and resources on articulating their vision and policies rather than solely on fundraising.
• Enhanced Voter Confidence: A cleaner, more transparent funding system could boost public trust in the electoral process and democratic institutions.
• Curbing the Black Economy: By providing legitimate sources of funding, it can help reduce the circulation of black money during elections.
• Improved Governance: If elected officials are less beholden to private financiers, they may be more inclined to make decisions in the broader public interest.

5. Challenges and Concerns Associated with State Funding

Despite its potential advantages, implementing state funding of elections in a country as vast and diverse as India is fraught with challenges:

• Defining "Legitimate" Expenses: Determining which election expenses should be covered by the state and preventing misuse of funds can be a complex task.
• Burden on Taxpayers/Public Exchequer: Funding elections through public money would place an additional burden on the state's finances, which could be substantial given the scale of Indian elections. This money might be diverted from other essential welfare programs.
• Potential for Misuse of Funds: There are concerns that state funds could be misused or diverted by political parties and candidates if robust oversight mechanisms are not in place.
• Risk of Dependency and Reduced Grassroots Engagement: Parties might become overly reliant on state funds and neglect grassroots fundraising and mobilization efforts, potentially weakening their connection with the electorate.
• Determining Eligibility and Allocation Criteria: Devising fair and objective criteria for allocating funds to various political parties (national, state, registered, new entrants) and independent candidates is a major hurdle. How much funding should each receive? Should it be based on past performance, number of candidates fielded, or some other metric?
• Inability to Eliminate Private Funding Completely: Even with state funding, parties and candidates might still seek and receive private donations, potentially through illicit channels, thereby negating the intended benefits. The Election Commission of India (ECI) has expressed concerns that it would be difficult to prohibit or check candidates' own expenditure over and above state provisions.
• Proliferation of Non-Serious Candidates/Parties: State funding could incentivize the formation of frivolous parties or the entry of non-serious candidates solely to access public funds.
• Implementation and Monitoring Challenges: Ensuring that funds are used for their intended purpose and monitoring compliance across thousands of candidates and numerous parties in a country of India's size would require a massive and efficient administrative machinery.
• Lack of Political Consensus: Achieving a broad political consensus on the modalities of state funding can be difficult, as different parties may have conflicting interests.
• Need for Accompanying Reforms: State funding alone cannot be a panacea. It needs to be part of a broader package of electoral reforms, including stricter regulations on political party finances, internal democracy within parties, and robust enforcement mechanisms.

Figure 2: State Funding of Elections - A Balancing Act

graph TD
    subgraph Benefits
        B1[Transparency]
        B2[Reduced Corruption]
        B3[Level Playing Field]
        B4[Focus on Issues]
        B5[Curb Black Money]
    end

    subgraph Challenges
        C1[Burden on Exchequer]
        C2[Misuse of Funds]
        C3[Defining Criteria]
        C4[Non-Serious Candidates]
        C5[Enforcement & Monitoring]
    end

    SF[State Funding of Elections] --> Benefits;
    SF --> Challenges;

Explanation of Figure 2: This diagram visually represents the dual nature of state funding. While it offers significant potential benefits for democratic health, it also presents considerable challenges in its design and implementation. Effective policy must strive to maximize the benefits while mitigating the challenges.

6. Historical Background and Committee Recommendations

The idea of state funding of elections in India has been deliberated upon by several committees and commissions over the years. Their recommendations provide valuable insights into the evolution of this concept.

• Dinesh Goswami Committee on Electoral Reforms (1990): This committee was among the early proponents of state funding. It recommended limited state support in kind, such as vehicle fuel, hire charges for microphones, and copies of electoral rolls.

• Indrajit Gupta Committee on State Funding of Elections (1998): This committee strongly endorsed the idea of state funding, citing constitutional, legal, and public interest reasons. Key recommendations included:

  • Partial state funding in kind, in the form of specific facilities and materials.
  • State funds to be provided only to recognized national and state parties, and not to independent candidates.
  • Creation of a separate Election Fund with contributions from the Central and State governments.
  • The committee acknowledged that given the economic situation then, only partial funding was feasible initially.

• Law Commission of India Report on Reform of Electoral Laws (1999): The Law Commission, in its 170th report, concluded that total state funding is desirable, provided political parties are prohibited from accepting funds from other sources. However, it concurred with the Indrajit Gupta Committee that, given the economic conditions, only partial state funding was practicable in the short term. It also strongly recommended establishing an appropriate regulatory framework for political parties, including provisions for internal democracy, maintenance of accounts, and auditing, before attempting state funding.

• National Commission to Review the Working of the Constitution (NCRWC) (2001) (Venkatachaliah Commission): This commission did not endorse state funding of elections in the absence of a robust regulatory framework for political parties and their financing. It agreed with the Law Commission that such a framework, including internal democracy and financial transparency for parties, was a prerequisite.

• Second Administrative Reforms Commission (ARC) – "Ethics in Governance" Report (2008): This commission advocated partial state funding of elections to curb "illegitimate and unnecessary funding" of election expenses.

• Law Commission of India Report on Electoral Reforms (2015): In its 255th report, the Law Commission reiterated the need for electoral reforms. While it acknowledged the arguments for state funding, it advised against full state funding unless other crucial reforms, such as enhanced transparency in donations and expenses, were enforced. It suggested that the existing system of indirect in-kind subsidies should continue.

Table 1: Key Committee Recommendations on State Funding

7. Constitutional and Legal Framework

While the Constitution of India does not explicitly provide for state funding of elections, several provisions relate to the conduct of free and fair elections and the regulation of political parties. The legal framework governing election funding is primarily derived from various statutes.

• Relevant Constitutional Provisions:

  • Article 324: Vests the superintendence, direction, and control of elections in the Election Commission of India. This broad power allows the ECI to take measures to ensure free and fair elections, which indirectly relates to regulating money power.
  • Article 19(1)(a) - Freedom of Speech and Expression: The Supreme Court has interpreted this to include the citizen's right to know, which extends to information about candidates and, by extension, the funding of political parties. This was a cornerstone of the judgment striking down the Electoral Bonds Scheme.
  • Preamble: The democratic principles enshrined in the Preamble underscore the need for elections free from undue influence.

• Representation of the People Act, 1951 (RPA, 1951): This is the primary legislation governing the conduct of elections.

  • Section 29B: Allows political parties to accept voluntary contributions from any person or company, other than a government company.
  • Section 29C: Mandates political parties to report contributions received in excess of ₹20,000 from any individual or company to the Election Commission. However, amendments introduced by the Finance Act, 2017 (related to electoral bonds) had exempted parties from disclosing contributions received via electoral bonds in these reports, a provision later struck down by the Supreme Court.
  • Section 77: Requires every candidate to keep a separate and correct account of all election expenditures incurred between their nomination and the declaration of results.
  • Section 78: Obliges candidates to submit their expenditure accounts to the District Election Officer within 30 days of the election.
  • Section 10A: Provides for disqualification of a candidate for up to three years for failure to lodge an account of election expenses or for lodging an incorrect account or exceeding the expenditure cap.

• Income Tax Act, 1961:

  • Section 13A: Provides tax exemption to registered political parties for income from house property, other sources, capital gains, and voluntary contributions, subject to certain conditions like maintaining books of accounts and getting them audited. It also limits anonymous cash donations to ₹2,000.
  • Section 80GGB: Allows Indian companies to claim deductions for contributions made to registered political parties.
  • Section 80GGC: Allows any person (other than a local authority and an artificial juridical person wholly or partly funded by the Government) to claim deductions for contributions made to registered political parties.

• Companies Act, 2013:

  • Section 182: Governs corporate funding to political parties. It permits Indian companies (that are more than three years old) to contribute any amount to political parties, provided it's approved by the Board of Directors and made through non-cash means (cheque, bank draft, or electronic means, or electoral bonds before they were struck down). The 2017 amendment removed the earlier cap of 7.5% of the average net profits of the preceding three financial years, raising concerns about transparency and potential for quid pro quo. Companies are required to disclose the total amount contributed in their profit and loss accounts, but after the 2017 amendment, they were no longer required to specify which party they donated to, a measure that significantly reduced transparency until the Supreme Court's intervention on electoral bonds.

• Foreign Contribution (Regulation) Act, 2010 (FCRA): This Act generally bars political parties from receiving foreign contributions. However, amendments have been made which critics argue could potentially open avenues for foreign influence.

Figure 3: Legal Framework for Election Funding in India

graph TD
    A[Legal Framework for Election Funding] --> B[Constitution of India (Implied Principles)];
    B --> B1[Art. 324: Free & Fair Elections];
    B --> B2[Art. 19(1)(a): Right to Know];

    A --> C[Representation of the People Act, 1951];
    C --> C1[Sec 29B: Acceptance of Contributions];
    C --> C2[Sec 29C: Disclosure of Contributions > ₹20,000];
    C --> C3[Sec 77 & 78: Candidate Expenditure Limits & Reporting];

    A --> D[Income Tax Act, 1961];
    D --> D1[Sec 13A: Tax Exemption for Parties, Cap on Anonymous Cash Donations (₹2,000)];
    D --> D2[Sec 80GGB/GGC: Tax Deductions for Donors];

    A --> E[Companies Act, 2013];
    E --> E1[Sec 182: Corporate Donations (Disclosure in P&L, No Cap)];

    A --> F[Foreign Contribution (Regulation) Act, 2010];
    F --> F1[Restrictions on Foreign Funding for Parties];

Explanation of Figure 3: This organogram outlines the key constitutional articles and statutes that govern how elections are funded in India and how political parties can raise and report funds. It highlights the multifaceted legal environment that any proposal for state funding would need to integrate with or modify.

8. Landmark Judgments and Case Laws

The Indian judiciary, particularly the Supreme Court, has played a crucial role in shaping the discourse on electoral reforms and transparency in political funding.

• Common Cause (A Registered Society) v. Union of India (1996): In this significant case, the Supreme Court highlighted the need for transparency in political funding. It directed political parties to maintain audited accounts and disclose sources of donations above a certain threshold (which later found its way into Section 29C of the RPA, 1951 for contributions above ₹20,000). This judgment underscored the judiciary's concern about the influence of money power in elections.

• Association for Democratic Reforms v. Union of India (2024) - The Electoral Bonds Case: This is arguably one of the most impactful judgments concerning electoral funding in recent times. On February 15, 2024, a five-judge Constitution Bench of the Supreme Court unanimously struck down the Electoral Bonds Scheme, 2018, and the related amendments made to the Representation of the People Act, 1951, the Companies Act, 2013, and the Income Tax Act, 1961, as unconstitutional.

  • Key Rulings and Observations:
    • The scheme violated the citizen's fundamental right to information under Article 19(1)(a) of the Constitution, as it allowed for anonymous donations, thereby depriving voters of crucial information about political funding.
    • The Court emphasized that transparency in political funding is essential for free and fair elections and to curb corruption and quid pro quo arrangements.
    • It held that the non-disclosure of information about funding of political parties was not justified and that the argument of protecting donor privacy did not outweigh the public's right to know.
    • The Court found that unlimited and anonymous corporate funding could unduly influence Indian elections and policy-making, tilting the level playing field.
    • It directed the State Bank of India (the sole authorized issuer of electoral bonds) to disclose details of electoral bonds purchased and redeemed, including the purchasers and the recipient political parties.
  • Significance: This landmark judgment has brought the issue of transparency in political funding to the forefront once again. While it dismantled a system of anonymous funding, it also reignited the debate on finding more transparent and equitable mechanisms for financing elections, including the potential role of state funding.

9. Current Relevance and Evolving Interpretations

The debate on state funding of elections remains highly relevant in contemporary India, especially in the wake of the Supreme Court's verdict on electoral bonds.

• The Electoral Bonds Scheme and its Aftermath: The striking down of the Electoral Bonds Scheme has created a vacuum and an urgent need to rethink the framework of political funding in India. While the scheme was criticized for its opacity, its proponents had argued it was an attempt to bring more funds into the formal banking system. With its annulment, the discussion on viable alternatives, including state funding, has gained momentum.

• The Election Commission of India's Stance: The Election Commission of India (ECI) has historically expressed reservations about full state funding. In 2020, the ECI informed the government that it was not in favour of state funding of elections, primarily because it believed it would not be able to prohibit or check candidates' own expenditures or spending by others over and above what the state provides. The ECI has emphasized the need for radical changes in how political parties receive and spend funds to ensure complete transparency. However, the ECI has been open to certain forms of indirect state support and has played a role in implementing them (like free airtime).

• Need for Comprehensive Reforms: Experts and civil society organizations widely believe that state funding, if introduced, must be part of a comprehensive package of electoral reforms. This includes:

  • Strengthening regulations on political party finances and their internal democratic functioning.
  • Ensuring stricter audits and public disclosure of all income and expenditure by political parties.
  • Effectively enforcing expenditure limits for both candidates and political parties.
  • Bringing political parties under the ambit of the Right to Information (RTI) Act to enhance transparency (a long-pending demand).

10. Comparison with Global Systems (Brief Overview)

Many democracies around the world have systems of public funding for political parties and/or elections, with varying models and degrees of success.

• United States: Has a system of public funding for presidential elections, where candidates who opt-in agree to spending limits. However, private funding, including through Super PACs, still plays a dominant role.
• United Kingdom: Provides some public funds to opposition parties (Short Money and Cranborne Money) for their parliamentary work and also for policy development. There are also grants for electoral registration. Campaign finance is regulated with spending limits.
• Germany: Has a system of public funding for political parties based on their electoral success (votes received) and private donations raised. There are strict transparency and disclosure requirements.
• France: Provides public funding to political parties for their regular activities and reimburses campaign expenses for candidates who secure a certain percentage of votes, subject to spending limits and transparency in accounts.
• Canada: Provides an annual allowance to registered political parties based on votes received in the last general election and reimburses a portion of election expenses to candidates and parties.
• Brazil: Has experimented with state funding, particularly after corruption scandals linked to private campaign finance. However, challenges related to proper use and transparency remain.
• Russia: Has state funding, but some analyses suggest it has been used in a way that stifles political competition.

Key Learnings from Global Experiences:

• No single model is universally applicable; systems must be tailored to the specific socio-political context.
• Public funding is often most effective when combined with strict regulations on private donations, expenditure limits, and robust transparency and enforcement mechanisms.
• The design of the allocation formula is crucial to ensure fairness and prevent the entrenchment of established parties or the mushrooming of frivolous ones.
• Even with public funding, vigilance against misuse and the continued influence of private money is necessary.

11. Conclusion: The Path Forward

State funding of elections in India is a complex proposition with compelling arguments both for and against it. The primary objectives – to enhance transparency, curb corruption, and create a level playing field – are undoubtedly crucial for the health of Indian democracy. The recent striking down of the Electoral Bonds Scheme has further amplified the need for a more transparent and equitable system of election financing.

However, the challenges associated with designing and implementing a viable state funding mechanism are substantial. Concerns about the burden on the public exchequer, potential misuse of funds, difficulties in establishing fair allocation criteria, and the inability to completely eliminate private funding need careful consideration.

The consensus among various committees and experts seems to lean towards a cautious and phased approach, possibly starting with partial state funding in kind, alongside comprehensive reforms. These reforms must include:

• Strengthening the regulatory framework for political parties, including mandatory internal democracy, transparent accounting, and auditing practices.
• Enhancing the powers and resources of the Election Commission of India to effectively monitor and enforce campaign finance laws.
• Revisiting and rationalizing expenditure limits for candidates and introducing effective limits for political parties.
• Promoting greater financial transparency by possibly bringing political parties under the RTI Act or similar disclosure norms.
• Building political consensus on the need for and modalities of state funding.

Ultimately, state funding cannot be viewed as a magic bullet. Its success will depend on a holistic approach that addresses the systemic issues plaguing election financing in India. It requires meticulous planning, robust legal and institutional frameworks, and unwavering political will to foster a cleaner, more transparent, and genuinely democratic electoral process. The journey towards reforming electoral finance in India is ongoing, and the debate on state funding will continue to be a critical part of this democratic evolution.

12. Interactive Q&A / Practice Exercises

Multiple-Choice Questions (MCQs)

1. Which of the following committees strongly endorsed partial state funding of elections in kind for recognized national and state parties in India? (a) Sarkaria Commission (b) Indrajit Gupta Committee (c) Punchhi Commission (d) Balwant Rai Mehta Committee

   Answer: (b) Indrajit Gupta Committee Explanation: The Indrajit Gupta Committee (1998) recommended partial state funding in kind, such as providing certain facilities and materials to recognized political parties and their candidates.

2. Section 13A of the Income Tax Act, 1961, provides for: (a) Ceiling on election expenditure by candidates (b) Tax exemption for income of registered political parties (c) Regulation of corporate donations to political parties (d) Powers of the Election Commission to disqualify candidates

   Answer: (b) Tax exemption for income of registered political parties Explanation: Section 13A of the Income Tax Act, 1961, grants tax exemption to registered political parties on their income from specified sources, provided they fulfill certain conditions like maintaining audited accounts. It also limits anonymous cash donations to ₹2,000.

3. The Supreme Court's landmark judgment in Association for Democratic Reforms v. Union of India (2024) primarily dealt with: (a) The extent of the Election Commission's powers (b) The constitutionality of the Electoral Bonds Scheme (c) Delimitation of constituencies (d) The use of Electronic Voting Machines (EVMs)

   Answer: (b) The constitutionality of the Electoral Bonds Scheme Explanation: The Supreme Court, in its judgment on February 15, 2024, struck down the Electoral Bonds Scheme as unconstitutional, primarily on the grounds that it violated the citizen's right to information under Article 19(1)(a).

4. One of the main objectives of state funding of elections is to: (a) Increase the duration of election campaigns (b) Reduce the number of political parties (c) Curb the influence of money power and enhance transparency (d) Make elections more expensive

   Answer: (c) Curb the influence of money power and enhance transparency Explanation: Key objectives of state funding include reducing reliance on private, often unaccounted for, donations, thereby curbing corruption and making election financing more transparent and equitable.

5. Which of the following is an example of indirect state funding of elections? (a) Direct cash grants to political parties (b) Government reimbursement of a candidate's travel expenses (c) Free airtime on public broadcasters for election campaigns (d) Government payment for printing party manifestos

   Answer: (c) Free airtime on public broadcasters for election campaigns Explanation: Indirect state funding involves non-monetary support. Free or subsidized access to media, provision of electoral rolls, and office space are common examples.

Scenario-Based Questions

1. Scenario: A new political party, "Jan Vikas Morcha," is formed with strong grassroots support but lacks significant financial backing from large corporations or wealthy individuals. They find it challenging to compete with established, well-funded parties in terms of campaign visibility (advertisements, rallies, etc.). Question: How could a system of partial state funding potentially address the challenges faced by Jan Vikas Morcha and promote a more level playing field? What safeguards would be necessary to ensure such funding isn't misused or doesn't lead to the proliferation of non-serious parties?

   Answer Explanation: Partial state funding could provide Jan Vikas Morcha with essential resources (e.g., funds for basic campaign materials, subsidized media access) based on criteria like the number of candidates fielded or a minimum threshold of public support demonstrated (perhaps through signatures or performance in previous local elections, if applicable). This would help them communicate their message to voters more effectively, somewhat countering the financial dominance of richer parties. Safeguards needed:

   • Strict Eligibility Criteria: Funding only for parties demonstrating a certain level of seriousness (e.g., minimum vote share in past elections, a significant number of active members, robust internal democratic structures).
   • Caps on Overall Expenditure: Even with state funding, overall expenditure limits for parties and candidates must be enforced to prevent an arms race.
   • Transparency and Audits: Mandatory, transparent accounting of how state funds (and any private funds) are utilized, subject to independent audits by bodies like the CAG or ECI-empanelled auditors.
   • In-Kind Support Focus: Prioritizing in-kind support (like media time, fuel, printing of basic materials) over direct cash grants initially can reduce misuse.
   • Performance-Based Tranches: Linking subsequent tranches of funding to achieving certain milestones or vote percentages could deter non-serious players.
   • Strong Penalties for Misuse: Severe penalties, including disqualification and recovery of funds, for any misuse.

2. Scenario: The Parliament is considering a bill for comprehensive state funding of Lok Sabha elections. However, there's a debate on whether independent candidates should also receive state funding. Question: What are the arguments for and against providing state funding to independent candidates? What did the Indrajit Gupta Committee recommend in this regard?

   Answer Explanation: Arguments for funding independent candidates:

   • Fairness and Equity: Independents are also legitimate participants in a democracy and may represent constituencies or views not covered by parties. Denying them funds while funding parties could be seen as discriminatory.
   • Encouraging Citizen Participation: Funding could enable individuals without party backing but with genuine public service intent to contest. Arguments against funding independent candidates:
   • Proliferation of Non-Serious Candidates: Risks encouraging a large number of frivolous candidates contesting solely for funds, making ballots unwieldy and confusing voters.
   • Administrative Burden: Tracking and disbursing funds to potentially thousands of independents would be a huge administrative challenge.
   • Defining Eligibility: Difficult to set fair and objective eligibility criteria for independents without relying on past electoral performance, which new independents wouldn't have. Indrajit Gupta Committee Recommendation: The Indrajit Gupta Committee (1998) recommended that state funds should be given only to recognized national and state parties allotted a symbol and not to independent candidates. This was likely to prevent the proliferation of non-serious candidates and to focus resources on established political entities.

Match the Following

Answers: 1-C, 2-D, 3-A, 4-B, 5-E

Chronological Order Exercise

Arrange the following reports/events related to electoral funding in chronological order of their occurrence/submission:

1. Second Administrative Reforms Commission Report (Ethics in Governance)
2. Supreme Court Judgment on Electoral Bonds
3. Indrajit Gupta Committee Report
4. Law Commission of India Report (170th Report on Reform of Electoral Laws)
5. Dinesh Goswami Committee Report

Answer:

1. Dinesh Goswami Committee Report (1990)
2. Indrajit Gupta Committee Report (1998)
3. Law Commission of India Report (170th Report on Reform of Electoral Laws) (1999)
4. Second Administrative Reforms Commission Report (Ethics in Governance) (2008)
5. Supreme Court Judgment on Electoral Bonds (2024)

Diagram-Based Question

Analyze the following hypothetical model for allocating state funds to political parties for Lok Sabha elections:

graph LR
    A[Total State Election Fund Pool: ₹1000 Crore] --> B{Allocation Criteria};
    B --> C[50% Equally Among Recognized National Parties];
    B --> D[30% Based on Percentage of Votes Secured in Previous Lok Sabha Election (to parties securing >2% national vote share)];
    B --> E[20% Based on Number of Candidates Fielded (min. 50 candidates, with a per-candidate grant up to a party cap)];

Question: Identify two potential strengths and two potential weaknesses of this proposed allocation model.

Answer Explanation:

• Potential Strengths:

  1. Provides a Basic Support Level: The 50% equal allocation to national parties ensures a minimum level of funding for established players, aiding their core activities.
  2. Rewards Past Performance & Encourages Broad Basing: Allocating funds based on past vote share (30%) incentivizes parties to maintain and expand their electoral support. The portion based on candidates fielded (20%) encourages parties to have a wider national presence, though the "min. 50 candidates" clause needs careful consideration to not unduly favour only very large parties or encourage token candidatures.

• Potential Weaknesses:

  1. May Disadvantage New/Smaller/State Parties: The significant equal share for only national parties might put emerging or strong state parties (that aren't national parties) at a disadvantage. The 2% national vote share threshold for performance-based funding might also exclude many smaller but significant regional players from that component.
  2. Complexity and Potential for Manipulation in "Candidates Fielded" Criteria: The criteria for funding based on the number of candidates could be complex to administer fairly and might incentivize parties to field non-serious candidates just to access more funds, unless the "per-candidate grant" is very small and overall party caps are strictly enforced. It doesn't necessarily reflect actual support.

Recommended Books

You can explore these highly recommended resources for a deeper understanding.

• Indian Polity (English) by M Laxmikanth for UPSC CSE 2025 | 7th edition (latest) | Civil Services Exam - Prelims, Mains and Interview | State PSCs exams/ PCS exams - by M Laxmikanth
• Oswaal NCERT One For All Book for UPSC & State PSCs | Indian Polity Classes 6-12 - by Oswaal Editorial Board
• Bharat Ki Rajvyavastha (भारत की राजव्यवस्था) - M Laxmikanth for UPSC CSE