Aseem Mittal

Funding on the biggest political parties in elections

Indian politics have always revolved around two political parties i.e. BJP (Bhartiya Janta Party) and INC (Indian National Congress). These two parties have the highest hold in all the elections and the never ending tussle for power. They have been the major dominant elements in politics since a long period and have got lot of support from other people in power outside politics. Every year these parties increase the numbers of candidates contesting in elections and this has made them the biggest and the strongest parties in India. The level of campaigning undertaken by these parties is one of the reasons of the success as they attract the maximum number of voters. These parties in the past have received an enormous amount of funding to contest in elections. There has been a massive increase in the total funding BJP and INC has received in the elections of 2004, 2009 and 2014. It is also shocking to know that INC being in power from 2004 to 2014 has less funding than BJP. In the 2014 Lok Sabha Election BJP was the party who received the highest amount of donations for running the elections.

The above graph shows the huge amount of money that the parties received for the elections of 2014. BJP received the maximum funding in the elections with all kinds of donations like corporate, businesses and individual contributions. The amount in the above data is not the exact amount the parties receive, as mentioned above in the paper that there are many unknown sources which provide help to these political parties. What is the exact money received is unknown to everyone? It is shocking to see that such huge amount is used by the parties in the elections. The money is used in many places. The biggest expenditure is incurred on advertising by the parties as they need the name of their party at all the places in order to convince people to vote for them and bring them to power.

The above graph shows the amount of corporate donation national parties have received from 2004-2018. The data shows the extent to which corporate houses come forward to give their support in the elections because it is very clear that they want to seek their own benefit from it. The data shows that BJP has been successful in getting the maximum corporate funding in the recent times irrespective of the fact that INC has been the most dominated party in the past. “The ruling party has captured as much as 92% of the total corporate donations in 2017-18. To interpret this in another way, corporates/businesses donated a mammoth 12 times more money to the ruling BJP than to other national parties in 2017-18. A comparison of the two principal national parties the BJP and the Congress makes it even more interesting. The BJP received as much as Rs 400 crores of corporate donations while the Congress received only Rs 19 crores in 2018. Surprisingly, the BJP has been maintaining a complete domination over the Congress even when the latter was in power in the 2004-2014 period, while the gap between the parties have grown massively since 2013-14 (coinciding with the phenomenal rise of Narendra Modi).” (Sahoo 2019). This domination is because of the fact that BJP was in power during that time and corporates would benefit the most by contributing to the ruling party. Mostly this funding is received through electoral trusts as there is tax concession in adopting this technique.

The above data makes it clear that because India does not have strict laws towards the financing of elections, huge sums of money is misused. What the party discloses and what they actually spend has a big difference between them and in most of the cases the amount of money spent is much higher that what party discloses. This difference shows the inefficiency of laws and institutions. The above data shows that money  influences the politics in this nation. India needs money for many other things like decreasing poverty, increasing poverty etc. It is true that we need a good leader to make these things possible but this data shows that we are already spending too much only to appoint our leaders.

Conclusion

In the conclusion, I would focus more on the change India wants in the institutions for financing in India. The current institutions only force the parties to disclose a small number of things regarding its funds collected and expenditure incurred. But they do not force the party to give report of all the collected funds. The current institutions have certain restrictions on the individual candidate as there is a cap on the funds an individual can collect. But it is important to consider the fact that there are a lot of candidates in a party and it is very easy for parties to disclose the money under the name of some other candidate and then spent it on someone else. It is important to look at the amount of money that is pumped in and out of the economy during the election period. The amount each party uses can be used in many other things that would be more beneficial to the economy and society. It is very strange that in a country like India where we have so many people living in vulnerable conditions and we are counted as developing nations or poor nations, there is so much money spent in the electing of the representative of the country. The money that is spent in the elections is the money of the population itself to some extent. In order to prevent the above-mentioned things, we need proper institutions in place so that a decent amount is spent on elections and a lot money is saved and invested in something else which more profitable. To make changes in the existing institutions we need amendments in Section 77(3) and 29(b) of the representation of people’s act and Section 182(1) of the companies act 2013. The amendments that are required in RPA are of 2 kinds. First, there can be a cap on the amount of fund a party can receive for running in elections and the amount should be set keeping in mind the amount of money that is wasted in the election on advertising and publicity. Secondly, there should be a policy which would state that the parties have to disclose all the information about the sources where they have received money from. This policy is very beneficial as it is very important that the political parties use the funds which are not from any illegal source. This policy can bring change in the existing financing as most of the funds that is used is from unknown or illegal sources.  If these required amendments are made then India can witness an election where an acceptable amount of money is spent and a reduction in the cases of black money, corruption and unfair means. One of the major changes are to be made in the companies act 2013 because the above data on corporate funding shows that who is the dominator of the elections and in order to stop these a cap on the amount companies can give to the parties needs to be imposed. Regulatory bodies such as SEBI (Securities and Exchange Board of India) needs to propose policies and it should be appointed as the regulator for all the donations that are made for elections. This would help in making the whole procedure transparent. Some other changes are also required like Ceilings on corporate donations; a regulatory agency with both investigative and executive powers;  pro-active media which publishes donations and expenditures periodically to ensure effective public scrutiny, compliance of disclosure requirements (donations irrespective of the amount as well as donors must be reported); and, authorised financial representatives for auditing the accounts of political parties. (Chatterjee 2014) The above-mentioned changes can cause a huge change in the election financing as we have seen from the data what role corporate houses play in the election and putting a ceiling on corporate funding will cause a massive reduction in the total funding.

Aseem Mittal is a student of Jindal School of Liberal-arts and Humanities.

References:

1) ADR, Associations of Democratic Reforms. Analysis of Funds Collected and Expenditure incurred by Political Parties During elections between 2004 and 2015. New Delhi: myneta.info, 2016.

2) Chatterjee, Niranjan Sahoo and Samya. “Corporate Funding of Elections: The Strengths and Flaws.” ORF ISSUE BRIEF (Feb 2014): 1-12.

3) ECI, Election Commission of India. PROPOSED ELECTORAL REFORMS. Delhi: Election Commission Of India, 2016.

4) ECI, Election commission of India. Handbook for observers. New Delhi: Election commission of India, 2019.

5) Gowda, E.Sridharan and MV Rajeev. “”Reforming India’s party financing and election expenditure laws.”.” Election Law Journal (2012): 226-240.

6) Law commisson of India, LCI. Electoral Reforms. New Delhi: Government of India, 2015.

7) OECD. Financing Democracy- Funding of Political Parties and Election Campaigns and the risk of policy capture. Paris: OECD Public Governance Reviews, 2016.

8) Sahoo, Niranjan. “Financing elections in India: A scrutiny of corporate donation.” 2019.