2024 Elections: A Deep Dive into Poll Spending and Electoral Finance

“I don’t have money to contest a Lok Sabha election”

 Finance minister Nirmala Seetharaman’s statement may be a tongue in cheek one, but it does throw the spotlight on a most contentious subject. Poll Funding in our country.

Who funds polls? How much money goes into funding of polls?

Some estimate the 2024 Lok Sabha elections to be the most expensive poll ever. Some calculations put a number in excess of 14 billion dollars to fund the polling exercise in world’s largest democracy.

During the last Winter Session of Parliament, Union Finance Minister Nirmala Sitharaman presented the initial batch of supplementary demand for grants for the fiscal year 2023-24 in the Lok Sabha. Among these allocations was an additional Rs 3,147.92 crore for election-related expenditure and Rs 73.67 crore for the administration of the Election Commission (EC).

With the scale of general elections expanding to accommodate a burgeoning electorate, an increasing number of parties, candidates, polling booths, and constituencies, the costs associated with the electoral process continue to soar.

Let’s break down the Estimated Expense per Lok Sabha Election:

Cost of organizing Lok Sabha elections has undergone a significant increase over the years.

Starting from Rs 10.5 crore in 1951, the cost surged to Rs 3,870.3 crore by 2014. Concurrently, India's electorate has expanded substantially, multiplying over five times from 17.32 crore in 1952 to 91.2 crore eligible voters in 2019. This staggering growth in the size of the electorate solidifies India's position as the world's largest democracy.

Excluding the 1957 general elections, the cost of conducting Lok Sabha elections has witnessed a consistent increase with each subsequent poll. Between the 2009 and 2014 Lok Sabha elections, the expenditure more than tripled, going up from Rs 1,114.4 crore to Rs 3,870.3 crore.

In the forthcoming elections, candidates are bound by expenditure limits ranging from Rs. 70 lakh to Rs. 95 lakh, contingent upon the state from which they are contesting. This ceiling encompasses a myriad of campaign-related expenses, including but not limited to public meetings, rallies, advertisements, posters, banners, vehicles, and promotional activities. Despite these stipulated limits, actual expenditure often surpasses the prescribed boundaries, reflecting the competitive nature of electoral battles.

Unfolding of the Poll Funding Process:

The expenses for elections are covered by the Central government, encompassing various aspects such as the administrative costs of the Election Commission (EC), which include deploying poll workers and armed security personnel, establishing polling booths, procuring electronic voting machines, conducting awareness programs, and issuing voter ID cards. However, the Election Commission has not yet disclosed the cost incurred for the 2019 Lok Sabha polls.

The process of poll funding unfolds through a series of strategic maneuvers adopted by political parties.

Election Commission's Guidelines on Maximum Election Expenses for each candidate

In the forthcoming 2024 Lok Sabha elections, candidates are mandated to adhere to precise spending limits meticulously outlined by the Election Commission of India (ECI). These guidelines aim to foster transparency and fairness in the electoral process while curbing excessive expenditure. 

Here's a comprehensive breakdown of the maximum amounts candidates can allocate towards their campaigning endeavors:

For Most States (Except Arunachal Pradesh, Goa, and Sikkim):

Lok Sabha Constituency: Candidates are permitted to expend up to Rs. 95 lakh per candidate.

Assembly Constituency (Andhra Pradesh): The spending limit stands at Rs. 40 lakh per candidate.

For Arunachal Pradesh, Goa, and Sikkim

Lok Sabha Constituency: Candidates are restricted to a maximum expenditure of Rs. 75 lakh per candidate.

Union Territories

Delhi, Jammu and Kashmir: Candidates can spend up to Rs. 95 lakh per candidate.

Other Union Territories: The spending ceiling is set at Rs. 75 lakh per candidate.

Cost of Electronic Voting Machines

The expenditure associated with procuring the much talked about Electronic Voting Machines (EVMs) has been on a steady rise since the conclusion of the 2019 Lok Sabha polls. EVMs have been utilized in every constituency during general elections since 2004. Notably, in the 2023-24 Budget, there was a substantial allocation towards procuring and maintaining EVMs. Initially, in the budget immediately following the election, the Centre earmarked Rs 25 crore for EVMs. However, in the latest budget, an allocation of Rs 1,891.8 crore was initially made for EVMs, with Finance Minister Sitharaman presenting an additional demand for grants of Rs 611.27 crore during the ongoing Winter Session of the House.

Although the annual Budget allocates funding directly to the Election Commission (EC), certain election-related expenses, such as those for Electronic Voting Machines (EVMs), are accounted for within the Ministry of Law and Justice’s Budget. 

Cost of Election Commission’s Administration:

The Election Commission's (EC) administrative expenses have exhibited a consistent upward trajectory over the years. Notably, the EC's budget has increased from Rs 236.6 crore in the year preceding the 2019 general elections to Rs 340 crore in the 2023-24 budget. During the Winter Session, Finance Minister Sitharaman presented a supplementary demand for grants totaling Rs 73.7 crore for the agency in anticipation of the forthcoming parliamentary polls. According to budget documents, the staff strength of the EC is projected to increase from 591 personnel in 2022 to 855 in 2024.

So, there are two clear verticals under which poll funding takes place. One is the cost ascribed by the central government towards administration management of polls and then there is the cost incurred by parties and candidates. It’s here where the much talked about electoral bonds scheme comes into play. A total sum of 16, 200 crores donated by private parties towards poll funding via electoral bonds. There is a raging debate already about companies first facing the ire of investigating agencies and then going to buy electoral bonds to donate either to the party in power in their state or at the centre.

Ultimately, post the death of the electoral bonds, cash will be back in the system. To imagine a digital India funding our poll expenses would really be fooling one’s own self.