Expenditure Limit for Elections

Expenditure Limit for Elections

News: Recently, the expenditure limit for candidates for Lok Sabha constituencies was increased from Rs 54 lakhRs 70 lakh (depending on states) to Rs 70 lakh-Rs 95 lakh, by the Election Commission of India (ECI).Further, the spending limit for Assembly constituencies was hiked from Rs 20 lakh-Rs 28 lakh to Rs 28 lakh- Rs 40 lakh (depending on states).

• In 2020, the ECI had formed a committee in 2020 to study the election spending limit.
• The enhanced amount of Rs 40 lakh would apply in Uttar Pradesh, Uttarakhand and Punjab and ₹28 lakh in Goa and Manipur.Apart from a 10% increase in 2020 due to the Covid-19 pandemic, the last major revision in spending limits for candidates was carried out in 2014.
• The committee found that there has been an increase in the number of electors and Cost Inflation Index since 2014 substantially.
• It is the amount an election candidate can legally spend for their election campaign and has to account for, which includes expenses on public meetings, rallies, advertisements, posters, banners, vehicles and advertisements.
• Under Section 77 of the Representation of the People Act (RPA), 1951, every candidate shall keep a separate and correct account of all expenditure incurred between the date on which they have been nominated and the date of declaration of the result.
• All candidates are required to submit their expenditure statement to the ECI within 30 days of the completion of the elections.An incorrect account or expenditure beyond the cap can lead to disqualification of the candidate by the ECI for up to three years, under Section 10A of RPA, 1951.
• The limit prescribed by the ECI is meant for legitimate expenditure because a lot of money in elections is spent for illegitimate purposes.It has often been argued that these limits are unrealistic as the actual expenditure incurred by the candidate is much higher.In December 2019, a private member’s bill was introduced in the Parliament which intended to do away with the cap on election spending by candidates.
• The move was taken on the grounds that the ceiling on election expenses ends up being counterproductive by encouraging candidates to under-report their expenditure.
• There is no cap on a political party’s expenditure, which is often exploited by candidates of the party.
• However, all registered political parties have to submit a statement of their election expenditure to the ECI within 90 days of the completion of the elections.  

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