July 20, 2024

Lukmaan IAS

A Blog for IAS Examination




The Constitution Bench headed by the Chief Justice of India, recently reserved its judgment on petitions challenging the validity of the electoral bonds scheme. The proceedings focused on arguments pertaining to the voters’ right to information vis-a-vis the right to confidentiality of donors. Transparency in election funding has become the central issue here.


Transparency: Public funding of elections can certainly bring transparency in the poll process with proper mechanism laid out. It would certainly be better than the existing system where candidates and political parties spend from their own pocket, and a lot of black money goes into election campaigning.

Level playing field: State funding of elections ensures that some influential people or groups don’t have undue influence over electoral processes. It enables a level playing field for the promotion of healthy competition by ensuring equality between large, well-known political parties and small parties and independent candidates.

Citizen centric decision: State funding of election will abstain political parties from the influence of crony capitalism and It can break up the corporate-political connection. If political parties are not financially influenced by the huge corporate sector, citizen-centric decisions will be encouraged.

Viable to economy: State funding of elections can cut down the huge expenditure spent on elections as only funds accounted by state funding will be used. Indrajit Gupta Committee Report, which is most often quoted in support of public funding of elections, it says state funding should be done only in kind and not in cash. However, it says State funding is viable only if parties are internally democratic in their functioning, transparent in their financial affairs.


Unclear mechanism: There is no clear mechanism of how state funding of elections can work to maximize its potential. Also, for it being success there is need to bring in other electoral reforms in place.

Functioning of political parties:  Political parties nowadays mostly function as corporates. Their business is to win elections and make money to be able to win the next elections. So, this functioning of political parties as corporate entities or as family-run corporate entities is the fundamental problem which needs to be addressed.

Diversion of expenditure: The state expenditure on many essential public goods such as primary health care and public health engineering is already very small. Given this situation, the public resources have to be channeled towards and not diverted from such essential services, and that too to finance something that already gets abundantly financed.

Not prevent from additional financing: The state funding of elections will not prevent parties from lobbying and getting undisclosed supplementary private funding, with associated implications. Also, public funding may influence many people to enter politics solely to receive state subsidies rather than run for office and engage in development work.


The Indrajit Gupta Committee on State Election Funding (1998)

  • To create a level playing field for parties with limited resources, the Indrajit Gupta Committee recommended state funding of elections in 1998.
  • The Committee advised placing two restrictions on state funding.
  • Firstly, only national and state parties with a symbol should receive state funding. Independent candidates should not.
  • Secondly, only recognized political parties and their candidates should get short-term state funding in kind in the form of specific infrastructure.
  • The Committee noted that at the time of the report, the nation’s economic climate was only conducive to partial, not complete, public funding of elections.

Law Commission Report on Electoral Law Reform (1999)

  • According to the Law Commission of India’s 1999 report, state funding of elections is “desirable” as long as political parties are not allowed to accept money from other sources.
  • Additionally, it strongly recommended that the appropriate regulatory framework should be put in place.
  • The Commission agreed with the Indrajit Gupta Committee that, given the economic situation of the nation at the time, only partial public assistance was practicable.

The National Commission to Review the Working of the Constitution, 2002

Second Administrative Reforms Commission (2008)

  • The Second Administrative Reforms Commission’s “Ethics in Governance” report from 2008 advocated partial state funding of elections to cut down on “illegitimate and excessive funding” of election costs.


  • There are some 34 countries where state funding of elections is available in some form or the other. But there are different models. In some countries only parties get the fund, candidates do not. There are countries where it’s the other way round.
  • The highest proportion of state funding of elections is in Norway, which is about 74% of the total expenses on the election.
  • In most countries where there is public funding of elections, there are also strict transparency requirements. In the U.S., there is a rule that if the presidential candidate raises X amount of money, they are eligible to receive an equal amount of money from the government.
  • But this is subject to certain conditions. In the last two or three presidential elections, no candidate has accepted government money. They have said that they do not want to accept these conditions and that they are able to raise enough money on our own.


Evolving an efficient mechanism: For effective implementation of state funding of election an efficient mechanism needs to be devised. It can be done by proper stakeholder consultation of all the parties concerned. For example,  Part-public funding of election campaigns is a practice in some countries. e.g. United States and Britain. There is a need to evolve our own version.

Realistic campaign spending: In India, the main reason for the prevalence of black money in election spending is the unrealistically low limits set by the Election Commission of India on campaign spending by political parties and candidates. More realistic campaign spending limits should be set where Election Commission could determine the actual expenditure and ask the parties to show the source of income.

Strict monitoring: The strict monitoring of expenditure by political parties and their functionaries at every level, starting with the panchayat, polling booth area and municipal ward should be done. For example, every party should disclose its expenditure every month at every level.  This should be open to challenge by rival parties, media, etc.

Involvement of political parties: Political parties need to be part of the decision-making process. Political parties have to be made accountable to the public. They have to be democratic institutions if they are to deserve public money.


There is an ongoing debate on transparency in political funding, as there is unnecessary expenditure by political parties in elections. In this regard, the idea of state funding of elections is a concept long debated to reduce corruption by funding elections with government money as opposed to individual campaign contributions. It has potential to bring new and growing parties in par with the established parties, thus ensuring fair elections.


  1. The Indian party system is passing through a phase of transition which looks to be full of contradictions and paradoxes.” Discuss. (2016)
  2. To enhance the quality of democracy in India, the Election Commission of India has proposed electoral reforms in 2016. What are the suggested reforms and how far are they significant to make democracy successful? (2017)


  1. State funding of elections can be the best way to achieve transparency in political funding. Comment.

 Refer to the main focus article for more:


 SOURCE: https://www.thehindu.com/opinion/op-ed/should-elections-be-state-funded/article67540233.ece

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