April , 2019
Election expenditure in India
13:35 pm

Aritra Mitra

In India, the General Election or the Lok Sabha Election is held every five years in which the representatives of the Lower House of the Parliament are elected. India is the largest democracy in the world, with 900 million voters this year. There would be approximately ten lakh polling stations this year, up by a lakh from the 2014 Election. Conducting elections in India is by no means an easy task; it requires a lot of human resources and expenses.  

Election expenses

The last Lok Sabha election of 2014 was the most expensive election in Indian history with a cost of Rs. 13,246 crore incurred by the national exchequer. This represented an increase of around 131% over the expenses incurred in the 2009 Lok Sabha election.

According to the Ministry of Law and Social Justice and the Election Commission of India, election expenditures in India since the 1984-85 elections have been steadily rising. The following table shows the election expenditure for Lok Sabha elections since 1985.

The expenditure of conducting the Lok Sabha elections is borne by the Indian government. State governments bear the costs for maintaining law and order during the Lok Sabha elections. However, there are no limits on the expenditure incurred by the political parties and large sums of money are raised and spent by them during the elections.

The demand for election expenditure in India is expanding, which combined with the growth of India’s economy, means that voter’s demands and perceptibility are also changing towards more sophisticated methods of campaigning. For example, the election manifestos might not be enough for some political parties, who look to supplement them with campaign advertisements to reach a wider audience including the disinterested voters. Dilip Cherian, a political campaign advisor and founding partner of Perfect Relations, a communications group, says, “Changing voter expectations, especially among the rising numbers of younger voters, which require a larger scale of operations in campaigns are transforming election campaigns.”

Expenditure in 2014

All registered parties have to submit a statement of election expenditure to the Election Commission of India (ECI) within 90 days of the completion of the Lok Sabha polls. Similarly, all contesting candidates have to submit their expenditure statement to the ECI within 30 days of completion of the elections.

The expenditure limit of the candidates is revised from time to time. During Lok Sabha Elections in 2014, the limit of expenditure for a parliamentary constituency in bigger states like Uttar Pradesh, Bihar, Andhra Pradesh and Madhya Pradesh was Rs. 70 lakh and the limit for a parliamentary constituency was Rs. 54 lakh for the constituencies of smaller states such as Sikkim, Arunachal Pradesh and Goa. 

Out of 342 MPs from the national parties, a total number of Rs. 7,599.82 lakh (approximately Rs. 75.59 crore) was declared by 263 MPs as received from their parties. However, the national parties declared that Rs. 5,523.53 lakh (approximately Rs. 55.23 crore) was given only to 175 MPs.

The following table shows the declaration of aid for election expenses from the party made by the MPs.

Of the regional parties, a total of 38 MPs from 15 different parties have either declared nil amounts as received or mentioned various amounts as received from their respective parties, which do not match with the expenditure statements submitted by the parties.

Expenditure by the government

A 2014 research paper by Deepa S. Vaidya and K. Kangsabapathy in the Economic and Political Weekly showed that much of the increase in the deficit ahead of the elections is because actual spending exceeds the budgeted estimates.

The following chart shows how the expenditure exceeds the estimates.

The governments in democracies might be tempted to increase spending before elections have long been recognised by political business cycle theories.

2019 general elections Milan Vaishnav, Senior Fellow and Director of the South Asia Program at the Carnegie Endowment for International Peace, a think-tank, said, “The combined US presidential and congressional elections in 2016 cost $6.5 billion. If the 2014 Lok Sabha elections cost an estimated $5 million, there is little doubt that the 2019 election will easily surpass that – making India’s elections the world’s most expensive.” 

However, it remains to be seen how this amount of governmental spending will impact the Indian economy. An expected deceleration in economic growth in major economies around the world, including China and the United States, is expected to hurt trade growth. According to Soumya Kanti Ghosh, Chief Economist at the State Bank of India, “We don’t expect that election spending will upset the growth trajectory for the next two quarters.”

Prime Minister Narendra Modi, who will be seeking a second term in elections due to be held in May, in an interim budget in February introduced populist spending measures worth Rs. 1.8 lakh crore ($25.37 billion) and a modest tax cuts in the current fiscal year ending in March 31 in an attempt to win the votes of the farmers and the urban middle class. 

Election handouts threaten India’s plan to curb budget deficits

According to a report published in The Economic Times, Narendra Modi’s government will miss fiscal targets for a second year in a row as it gives in to populist pressures before this election. Speculation is mounting of possible cash handouts to farmers and tax exemptions to shore up voter support ahead of the polls. Modi’s Bharatiya Janata Party lost control of key states in provincial elections in December.

Directives in the use of plastics in election campaigns and the creation of insoluble wastes

Responding to the suggestions from environmental groups, the Election Commission has discouraged harmful practices such as the defacing of property during poll campaigns and curbing the use of plastic and other environmentally hazardous materials. The World Wide Fund for Nature-India, in a letter to the EC in 1999, had stated that it was “very perturbed over the excessive and non-sensible use of plastic by political parties”, which not only caused “choking of drainage systems in major towns and cities” but also contaminated agricultural fields. The letter also pointed out that earlier posters and banners were made using cloth or paper, which was being increasingly replaced by thin plastic. Responding to the letter, the Commission wrote to all political parties, urging them not to use plastic for their posters and banners.

Punjab Chief Electoral Officer S. Karuna Raju has asked all the political parties to use eco-friendly material for campaigning during Lok Sabha Elections as per directions of Election Commission of India and Kerala High Court’s decision. In a statement, Raju said, “A lot of the campaigning material including posters, cut-outs, hoardings, banners, political advertisements and others are made of plastic material which becomes waste after the elections.” He added that single-use of plastic generated materials during the campaign causes choking of drainage, ingestion by stray animals and land and water pollution. 

Raju said that some of these plastics are Poly Vinyl Chloride (PVC) based, which produces emissions on burning. A number of alternates like compostable bags, natural fabrics, recycled paper and other material can be used during the campaign which has a lesser environmental impact. The sustainable and environmentally friendly management practices in the upcoming Lok Sabha elections have given an opportunity to bring a revolutionary change in the election campaign by promoting such sustainable practices.


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