Cap on election expenditure

Limits on campaign expenditure are meant to provide a level-playing field for everyone contesting elections. It ensures that a candidate can’t win only because she is rich.
The 255th Report of the Law Commission on electoral reforms argued that unregulated or under-regulated election financing could lead to “lobbying and capture, where a sort of quid pro quo transpires between big donors and political parties/candidates”.

The Election Commission (EC) imposes limits on campaign expenditure incurred by a candidate, not political parties.
Candidates must mandatorily file a true account of election expenses with the EC.
An incorrect account, or expenditure beyond the ceiling can attract disqualification for up to three years under Section 10A of The Representation of the People Act, 1951.

It has often been argued that these limits are unrealistic as the actual expenditure incurred by the candidate is much higher.
However, due to the EC’s stipulated cap it is not reflected in the expenditure statements submitted to it and is instead disguised in various ways or driven through illegal mechanisms.
An analysis of expenses for the 2014 Lok Sabha elections by the nonprofit Association for Democratic Reforms (ADR) found that even though candidates complained that the EC’s limits were too low and unrealistic, as many as 176 MPs (33%) had declared election expenses that were less than 50% of the limit in their constituency — indicating that candidates may not be providing true accounts of their poll expenses to the EC.

The EC had previously asked the government to amend the Representation of the People Act and Rule 90 of The Conduct of Elections Rules, 1961, to introduce a ceiling on campaign expenditure by political parties in the Lok Sabha and Assembly polls.

The Law Ministry has increased the ceiling on poll expenditure for Assembly and Lok Sabha elections by 10% by issuing a notification amending the Conduct of Elections Rules, 1961.
The move was based on a recommendation of the Election Commission which suggested a 10% increase in expenditure for all elections to be held during the COVID-19 pandemic, keeping in mind the problems that candidates may face while campaigning under the various COVID protocol laid down by the poll panel.
The ceiling on poll expenditure varies across States, with candidates in Assembly elections in bigger States like Bihar, Uttar Pradesh, and Tamil Nadu now allowed to spend up to ₹30.8 lakhs as against ₹28 lakhs earlier.
For a candidate contesting a Lok Sabha poll in these States, the revised ceiling on poll expenditure is now ₹77 lakhs instead of the earlier amount of ₹70 lakhs.
Goa, Arunachal Pradesh, Sikkim and a few Union Territories, based on the size of their constituencies and population, have a lower ceiling on poll expenditure. Here while the enhanced ceiling for a Lok Sabha candidate is now ₹59.4 lakhs those contesting an Assembly can spend up to ₹22 lakhs.
The last time the expenditure ceiling was enhanced was in 2014 just ahead of the Lok Sabha polls.
The notification, however, does not mention that the limit has been increased in the wake of the pandemic or if it is only for the COVID-19 period.

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