Money & people's mandate

As the world's largest democracy, India boasts an impressive 815 million voters, a number comparable to the combined electorate of Europe, the USA, Canada, and Australia. In a democracy, the people are sovereign, and elections provide a platform for them to exercise their choice and determine who will govern on their behalf. This process lends legitimacy to the ruling party or coalition, enabling them to govern the citizens.

The history of elections in India is a testament to the relentless struggle of freedom fighters, which culminated in landmark legislations such as the Indian Councils Act of 1909 and the Government of India Act of 1935. Although these efforts did not yield the desired results, they laid the groundwork for the Constitution of India, which established the Election Commission of India. The Commission is tasked with ensuring the conduct of free and fair elections.

However, the flaws in India's electoral system became a subject of public debate and discussion after 1971. Several committees were constituted to examine these issues, including the Tarkunde Committee (1975), the Dinesh Goswami Committee (1990), the Vohra Committee (1993), the Election Commission's report (1998), the Indrajit Gupta Committee, the National Commission to Review the Working of the Constitution (2001), and the Second Administrative Reforms Committee (2008). Furthermore, the Union Ministry of Law and Justice established a Committee on Electoral Reforms in 2010. Despite these efforts, loopholes continue to plague India's electoral system.

The growing influence of money power in Indian electoral politics is a critical flaw that undermines the democratic process. In India, there's a tendency to favour wealthy candidates, as seen in the 2014 national election where candidates' median wealth was Rs 23.8 lakh, approximately 27 times the nominal per capita income of India.

The impact of money power is evident in the exorbitant expenditure on advertisements, massive hoardings, and public meetings that feed directly into TV stations, along with paid news. Additionally, there's a surge in cash handouts, purchase of electoral bonds, alcohol distribution, and gift distribution.

The lack of effective regulation of money in politics is alarming. While there's a cap on expenditure for individual candidates, there's no such cap for political parties. The Law Commission of India has recommended capping anonymous donations at Rs 20 crore or 20 per cent of a party's total funding. However, a significant portion of political funding remains unaccounted for, with 60 per cent of the income of eight national parties in 2021-22 coming from unknown sources, including electoral bonds introduced in 2017.

The electoral bond scheme, touted as a means to increase transparency in political funding, has been widely criticised for its opacity. The Supreme Court's decision to strike down the scheme as "unconstitutional and manifestly arbitrary" is a significant step towards promoting transparency in electoral funding.

In this context, public funding of elections, as proposed by the Dinesh Goswami and Indrajit Gupta Committee, is an attractive alternative. This proposal is justified on the grounds that political parties perform critical public functions, such as educating citizens about government policies and programs.

Public funding of elections can help reduce the influence of money power in politics, promote transparency, and ensure a level playing field for all candidates. However, as the National Commission to Review the Working of the Constitution (2021) and the Law Commission have advised, it is essential to develop an appropriate framework for political parties before state funding is considered.

Reducing corruption is one of the primary benefits of public funding of elections. By providing a clean and transparent source of funding, public funding can help reduce the influence of money power in politics. This, in turn, can promote transparency and accountability in governance.

Public funding can also ensure a level playing field for all candidates, regardless of their financial resources. This can help promote democracy by allowing citizens to participate in the electoral process without being influenced by money power. Furthermore, public funding can reduce the influence of corporate funding in politics and promote citizen-centric decision-making.

However, there are also challenges associated with public funding of elections. Developing an effective regulatory framework for public funding of elections is crucial to ensure transparency and accountability. Allocating funds to political parties and candidates can be a complex task, and there is a need to develop a fair and transparent allocation mechanism. Effective monitoring and enforcement mechanisms are also necessary to prevent misuse of public funds and ensure compliance with the regulatory framework.

Electoral funding models vary significantly across countries, reflecting their unique political systems and histories. In the United States, for instance, there are limits on contributions from donors to prevent undue influence. In contrast, the United Kingdom follows an expenditure limit model, where parties are restricted in how much they can spend on campaigns, rather than how much they can receive in donations.

Germany's approach is distinct, as public funds are allocated to parties based on their performance in previous elections, membership fees, and private donations. This model aims to promote transparency and accountability in political funding.

Scandinavian countries like Norway allocate funds based on parties' share of votes in previous elections and their representation in the elected body. This approach encourages parties to engage with voters and build a strong electoral base.

The Chilean system of "reserved contributions" is another innovative approach, where donors can transfer funds to parties through the Chilean Electoral Service. This model promotes transparency and helps regulate political funding.

India's electoral funding system, however, faces challenges related to transparency and accountability. The country's electoral bonds scheme has been criticised for its opacity, and there are concerns about the influence of money power in politics.

India's electoral system is at a crossroads, and it's essential to initiate a public debate on the issue of electoral funding to ensure a meaningful democracy. The current system, where wealthy individuals and corporations can influence political parties, threatens to undermine the very foundations of our democracy.

As India emerges as a front-ranking nation globally, strengthening the base of our democracy is crucial. Reopening the dialogue on public funding of elections and appointing a committee to assess its pros and cons is a step in the right direction. This committee should develop a strong legal framework for contesting political parties, ensuring transparency and accountability in electoral funding.

The debate around democracy versus development is a valid one. While state-funded elections may lead to reduced development expenditure, it's essential to find ways to cut down wasteful state expenditure and allocate funds more efficiently. Democracy has the inherent virtue of empowering and sensitising citizens, and it's crucial to put our democracy on a strong pedestal to prevent threats to its foundations.

Electoral bonds, introduced in 2017, have been criticised for their lack of transparency and potential to facilitate black money. The Supreme Court's recent ruling against anonymous political donations is a significant step towards promoting transparency in electoral funding.

To revamp India's political funding framework, it's essential to explore alternative models, such as public funding of elections, and develop a robust regulatory framework to prevent the misuse of funds. By doing so, India can strengthen its democracy, ensure transparency and accountability in electoral funding, and truly become a government of the people, by the people, and for the people.

Fr. John Felix Raj is the Vice Chancellor of St. Xavier’s University, Kolkata and Prabhat Kumar Datta is the Adjunct Professor of Political Science and Public Administration at Xavier Law School, St. Xavier’s University, Kolkata. Views expressed are personal