Increase of Poll Expenditure Ceiling by the Indian Government

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The law ministry has increased the ceiling on poll expenditure by 10% for Lok Sabha and Assembly elections following a recommendation by the ECI.

The proposal by ECI

Over a month, the law ministry sources said they had received a proposal from the Election Commission of India (ECI) regarding an amendment to the Conduct of Election Rules, 1961. In which the ECI had proposed to amend Rule- 90 of the said statute to increase the campaign expenditure limit by 10% for all future elections due to restrictions imposed to control the spread of coronavirus.

According to government sources, the ECI has argued that campaign activities during a pandemic will be a challenging one. By following imposed restrictions, conducting election campaigns will lead to hikes in spending.

The proposal came after feedback was submitted by the BJP and other political parties to the poll panel. In which they suggested increasing the expenditure limit to accommodate spending on PPEs, thermal screening, and other measures. They also added that such expenditure should be added to the party’s account and not the candidates.

The ECI, after receiving this suggestion, formed a committee of officers on this subject. And after analysing, recommended a 10% increase in the expenditure limit for candidates contesting Lok Sabha and Assembly elections. Which then was approved by the Government of India. The Ministry of law and Justice notified us of the amendment on 19th October 2020.

Amendment of Rule 90 of the Conduct of Election Rules, 1961

The said amendment will help the candidates contesting the Bihar poll as well as the polls to 1 Lok Sabha and 59 Assembly seats.

The election commission indicated that this hike in expenditure is due to Covid-19. And also mentioned that this amendment would stand effective during the pandemic. But, in the official gazette, this specific condition was not included, whereas it said, “until further notification” this amendment to Rule- 90 of the Conduct of Election Rules, 1961 will be in effect.

As per reports, this increase in expenditure limits applies to expenditure towards the use of vehicles in campaigns, on campaigning equipment, at election rallies, in electronic and print media, on banners, pamphlets, and field visits. The biggest expenditure areas are social media platforms and publicity.

The ECI has instructed political parties to submit their social media accounts and their total spending for advertising, campaigns, and wages paid to a team of workers related to account maintenance.

It is also instructed that political parties should provide details of expenditure incurred during the campaign within 30 days of the declaration of election results. If a political party fails to do so, it will amount to a violation of Rule 90 of the Conduct of Election Rules, 1961. And corruption practices under Section- 123 (6) Representation of Peoples Act, 1951.

New ceiling and poll expenditure

As per the official gazette, the ceiling on poll expenditure varies from state to state. Candidates in Assembly elections in bigger states like Bihar, Uttar Pradesh, and Tamil Nadu are allowed to spend Rs. 30.8 lakhs. Before the said amendment, the limit was set on Rs. 28 lakhs.

And people contesting Lok Sabha’s election in these states are now allowed to spend up to Rs. 77 lakhs. Earlier, it was Rs. 70 lakhs. Goa, Arunachal Pradesh, Sikkim, and a few UTs have a lower ceiling when compared to the above-mentioned states. It is for Rs. 59.4 lakhs for Lok Sabha and Rs. 22 lakhs for contesting Assembly election.

What doesn’t account for election expenditure?

The amounts spent on travel by or any other means for propagating the program of the political party do not come under the ambit of election expenditure.

Any amount spent on the service of the government and discharge of official duty is also not considered to be election expenditure.

How are such ceilings made?

Ceilings are made by amending the Conduct of Election Rules, 1961. The last time it was amended in 2014 just ahead of the Lok Sabha polls. For Andhra Pradesh and Telangana, the limit was enhanced in 2018.

Committee to review candidates’ expenditures

The ECI has formed a committee to examine the issue of revising the expenditure limit in view of the increase in the number of electors and an increase in the Cost Inflation Index. It consists of former DG investigations Harish Kumar and EC secretary General Umesh Sinha. As said earlier, the last time the amendment was made before six years wherein the electorate and cost inflation index has increased.

The committee will examine the expenditures of all political parties and will submit its report within four months of its constitution, the EC said.


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