The Indian Democratic Behemoth

The latest controversy surrounding electoral bonds in India involves several key developments. India’s Supreme Court has ordered the State Bank of India (SBI) to disclose details of the electoral bonds scheme, which allowed anonymous political donations. The court struck down the scheme as “unconstitutional” and has given SBI a strict timeline to comply with its order. SBI sought an extension until June 30^th, 2024 to provide detailed information about the bonds but was denied by the Supreme Court. The bank is required to disclose details of bond purchasers and the amounts redeemed by political parties. These events have sparked significant debate and concern over transparency and the influence of anonymous donations in Indian politics.

The 2019 general elections in India were estimated to be one of the most expensive elections ever. According to a report by the Centre for Media Studies, the total expenditure was about Rs 60,000 crore (approximately USD 8 billion), with BJP accounting for nearly 45% of the total poll spending. This significant expenditure reflects the scale and intensity of the electoral process in the world’s largest democracy. If you logically think about it, this money is the public money spent to choose a political party and a leader to rule the country for 5 years and during this period again get ready for the next election.

Elections are a cornerstone of democracy, yet the escalating costs year after year set a higher financial benchmark for subsequent polls. I believe that India’s election funding system requires a profound overhaul in its approach. To substantiate my viewpoint, I will present some figures that should convince any rational individual of the severe misalignment between our democratic journey and the spiralling election expenses. 

Numbers don’t lie:

Absolute Majority is a myth? Percentage of vote share since 1951 elections, the highest has been 48.12% in 1984-85 by INC with 414 seats. In the very first general election, the INC won only 364 seats with a 44.99% vote share. In 2014, the BJP the largest winner won, 282 seats with a vote share of only 31.34%. In 2019, the BJP improved the tally of total numbers and vote shares to 303 and 37.7% respectively. So, in the 75+ years of democracy in India, no party has won more than 414 seats and more than 48.12% vote share ever. So, how do the rest of the people who did not vote for a particular party or leader, who was not elected, get their desires and wishes fulfilled?

Political Parties for Power? In 1951-52 general elections, 53 political parties contested the election. That number has grown to 673 parties in the 2019 general election. The number of parties has grown more than ten times, this only means that more votes are getting split into smaller segments of parties. Though the rise of number parties means more local voices are getting some kind of representation at the same time these smaller splinters are not making enough dent at the national level. More parties also mean a greater number of politicians fighting for the same number of seats which again splitting the votes shares. If we have to bring more accountability to our central leadership, there has to be some radical rethinking needed, otherwise, we will build more inefficiencies in the democratic system.

Politics for Profit? In the 2014 and 2019 General elections, per parliamentary constituency on average 15 candidates were fielded by the political parties. In 2014 there were 189 constituencies where 16 or more candidates fought one PC seat. What is atrocious is in 2019, Nizamabad of Telangana had 185 candidates for one single PC seat. In 2019, that number came down slightly to 163 (still contributing to 30%). Very clearly politics is a very profitable profession for many of our politicians and political parties. In total 8045 candidates fought for the 2019 general election for a total of 543 seats. There is something seriously wrong with the way, we are progressing in the democratic election process. It seems every political party is simply ignoring this and just focusing on the next election win.

Expenditure shooting the roof? The initial cap on election spending, established during the first General Elections in 1952, remained unchanged for the next three elections in 1957, 1962, and 1967. It wasn’t until 1971, nearly two decades later, that the expenditure ceiling was raised for the first time to reflect the growing constituencies and electorate. Since then, the spending limit for candidates has been revised multiple times, taking into account factors such as the increasing number of voters, the cost inflation index, and changes in constituency geography as recommended by the Delimitation Commission. At the start of 2022, the cap was updated again to consider these factors and the rise of virtual campaigning. The most recent amendment to Rule 90 of the Conduct of Elections Rules, 1961, issued by the Ministry of Law & Justice on January 6, 2022, sets the current limit between Rs. 75 Lakhs and Rs. 95 Lakhs per Parliamentary Constituency. These are only the official figures, the actual on-ground expenditure is at least 7 to 10 times higher per candidate. We saw earlier in this article; that the total expenditure of the 2019 elections was Rs. 60,000 crores by 8045 candidates, so per candidate the average is Rs. 7.46 crore.

Regional Parties Gaining Ground? Since 1996 regional parties have won at least 100 or more seats in every general election. The growth of regional parties in India may be able to truly sustain the federal fabric of our democracy. But unless some structural reforms are done in our constitution, it would be very difficult for the regional parties to sustain the onslaught of the major national parties. For example, at the state assembly level, only the regional parties of the state should contest the election. This may sound very simplistic or radical but if done constructively can reap a lot of benefits to strengthen the federal fabric of our democracy. But is this too little and too late?

Opaque election funding is the biggest source of corruption in India today. Just imagine Rs. 60,000/- crore worth of money spent in 2019. Where do think this comes from? Well, the political parties are not in any business, they simply depend on donors to support them. In return, the donors are supported back with contracts, favours etc post the election by the winning leader and political party.

Here are some radical thoughts, that need the political will and constitutional blessings to protect the future of India’s democratic process.

Individual Tax Rebate for Political Donations: Consider allowing political donations made by individuals to serve as a substitute for income tax payments. For instance, if an individual donates Rs. 20,000 to a political party, they should receive a corresponding income tax rebate. This approach encourages transparent political funding and empowers taxpayers to contribute to India’s democratic processes. To prevent abuse, individual contributions could be capped as a percentage of their income.

Corporate Donations and Tax Rebates: Large corporations could follow a similar model. Their donations might be tied to a percentage of their profits, ensuring that no business entity gains undue advantage within the political system. Recognizing these contributions through tax rebates would further promote transparency.

Stringent Expenditure Disclosure: Implement stricter expenditure disclosure requirements at the individual leader level. When leaders are transparent about their spending, political parties are likely to follow suit.

Two-Phase Elections for Efficiency: In constituencies with more than three candidates, consider a two-phase election process. First, eliminate candidates with lower vote shares, leaving only the top three contenders. In the second phase, these top candidates compete, maximizing the actual winner’s vote percentage. This approach reduces the number of candidates in future elections and curtails overall campaign expenses.

Primary Sources of data and information are taken from the: ELECTORAL STATISTICS POCKET BOOK 2022 (AS ON 31st DECEMBER), Election Commission of India.