As parties get an EC raise, the high ambition and low reach of poll expense limits

The primary reasons for the revision were a rise in the number of electors and the Cost Inflation Index. The committee also took into account the plea by political parties regarding the added expense they had to bear of digital campaigning on account of Covid.

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.

The number of total voters in the country has increased from 834 million in 2014 to 936 million now. This means that each candidate is canvassing for a much larger group of electors. Accordingly, in case of Assembly elections, a candidate can now, as per the EC limit, spend Rs 40 lakh in the big states, while the limit for smaller states is Rs 28 lakh, up from Rs 20 lakh.

The Cost Inflation Index (CFI) — used to estimate the increase in prices of goods and assets year-on-year due to inflation – has gone up from ‘240’ in FY 2014-15 to ‘317’ in current FY.

The CFI indicates the fall in purchasing power (quantity of goods that one unit of money can buy).

This is the first major revision in the election expenditure limit for candidates since 2014. In 2020, the Ministry of Law and Justice notified an amendment in Rule 90 of the Conduct of Elections Rules, 1961, which enhanced the then expenditure limit for Assembly elections, as the Bihar polls approached, by 10%.

As per the Representation of the People Act (RPA), 1951, Section 77, 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 states that an incorrect account or expenditure beyond the cap can lead to disqualification of a candidate for up to three years.

It has often been argued by political parties that the limit on the legal expenditure of candidates is not realistic.

In 2019, Congress MP M V Rajeev Gowda had moved a private member’s Bill to deregulate poll expenses, saying a candidate can’t even send postcards to 25 lakh voters with Rs 70 lakh, which was the limit on expenditure for a Lok Sabha election then. He had suggested that a National Election Fund be set up by the government.

A report by the Association for Democratic Reforms (ADR) in July 2021, analysing election expenditure statements of 538 of 543 MPs elected in 2019, showed that they had on paper spent an average amount of Rs 50.84 lakh, or 73% of the expense limit.

As per the report, only two MPs officially exceeded the expense limit. The National Conference’s Hasnain Masoodi, who won from Anantnag, spent Rs 9.27 lakh more than allowed. And the BJP’s Ravindra Shyamnarayan Shukla alias Ravi Kishan, who won from Gorakhpur, exceeded the expense limit by Rs 7.95 lakh.

There is incidentally 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.

Parties are allowed to issue a list of star campaigners, the money spent on whom is credited to the party’s account rather than the candidate’s.