Expenditure limits in Elections – UPSC GS2

New Expenditure Limits:
  • Election Commission has raised the expenditure limit of candidates as follows:
    • Lok Sabha Elections: Rs 95 lakh up from Rs 70 lakh
    • Assembly Elections:
      • Large States: Rs 40 lakh up from Rs 28 lakh
      • Small States: Rs 28 lakh up from Rs 20 lakh
  • Such changes are made by amending the Conduct of Elections Rules.
  • Association for Democratic Reforms (ADR) in 2021 did a study analysing election expenditure statements of 538 of 543 MPs elected in 2019.
  • This showed that they had on paper spent an average amount of Rs 50.84 lakh, or 73% of the expense limit.
What is election expenditure limit? 
  • Expenditure limit refers to the amount a candidate is allowed to legally spend on election campaigning, including public meetings, rallies, advertisements, posters and banners, and vehicles.
  • All candidates are required to submit their expenditure statement to the EC within 30 days of completion of an election.
  • There is no limit on how much a political party can spend on elections, but they have to submit a statement of their expenditure to the EC within 90 days of completion of the elections.
  • The money spent on star campaigners is credited to the party’s account rather than the candidate.
What are the reasons for the revision of the election expense? 
  • Rise in number of electors: Number of total voters in the country has increased from 834 million in 2014 to 936 million now. This means that each candidate is covering a much larger group of electors.
  • Cost Inflation Index (CFI): It has increased. It is used to estimate the increase in prices of goods and assets and fall in purchasing power of money year-on-year due to inflation.
  • Harish Kumar Committee recommendations: EC had also set up a committee in 2020, comprising retired IRS officer Harish Kumar, and other senior officers of the election commission to consider the change in the expense limits.
  • Demand by Political Parties: Political parties have time and again argued that the limit on the legal expenditure of candidates is not realistic.
  • Digital campaigning due to COVID: They also wanted the election expense to be revised to cover the added expense parties had to bear due to digital campaigning on account of Covid.
What are the legal provisions regarding election expenditure? 
  • Section 77 of the Representation of the People Act (RPA), 1951 mentions that every candidate must keep an account of all expenditure incurred from the date on which they are nominated to the date of declaration of the result.
  • Section 10A of the Act also states that an incorrect account or expenditure beyond the cap can lead to disqualification of a candidate for up to three years.

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