cost of conducting elections in india

8/10/2019 Cost of Conducting Elections in India

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Cost of Conducting Elections in India

Introduction

As India, the worlds largest democracy, goes through the 2014 general elections for the formation of the

16th Lok Sabha, with voting taking place in all 543 parliamentary constituencies of India, we as

management students explore and analyse into what it takes for the government (in terms of expenditure)

to conduct a fair and transparent election.

To introduce you to the enormity of governing such an election, let us look into some numbers. The

number of eligible voters in this election is huge i.e. 814.5 million. This will be the longest and the most

expensive general election in the history of the country, with the Election Commission of India estimating

that the election will cost the exchequer INR 3,500 Cr. (US$577 million), excluding the expenses incurred

for security and individual political parties. Parties are expected to spend INR 30,500 Cr. (US$5 billion)

in the election, according to the Centre for Media Studies. Having received a gist of the sheer numbers

governing this election, lets understand who decides over these policies, what the laws governing them

and the recent amendments in rules and regulations.

Election Commission of India

Election Commission of India is a permanent Constitutional Body. The Election Commission was

established in accordance with the Constitution on 25th January 1950. The Constitution of India has

vested in the Election Commission of India the superintendence, direction and control of the entire

process for conduct of elections to Parliament and Legislature of every State and to the offices of

President and Vice-President of India. It currently consists of Chief Election Commissioner and two

Election Commissioners.

Electoral Laws & System

The major laws are Representation of the People Act, 1951, which mainly deals with the preparation and

revision of electoral rolls and the Representation of the People Act, 1951 which deals in detail with all

aspects of conduct of elections and post election disputes. The Supreme Court of India has held that

where the enacted laws are silent or make insufficient provision to deal with a given situation in the

conduct of elections, the Election Commission has the residuary powers under the Constitution to act in

an appropriate manner. Rule 90 of the Conduct of Elections Rules, 1961 prescribes varying limits of

election expenditure for Parliamentary and Assembly Constituencies in each of the States and Union

Territories. Particulars, which have to be shown in the account, are prescribed in Rule 86 of those Rules.

Conduct of Election (Amendment) Rules, 2014 Amendment of Rule 90 Increase in the maximum

limit of election expenses.


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Under the Compendium of Instructions on Election Expenditure Monitoring (January - 2014), Election

Commission has brought together at one place the relevant provisions of law and instructions to be

followed scrupulously by election officers, observers, candidates and political parties for effective

monitoring and scrutiny of election expenditure. Election Expenditure monitoring mechanism has been

set up for monitoring day to day election expenditure incurred by the candidate, in each constituency. It

consists of various teams such as - Expenditure Observers (EO), Assistant Expenditure Observers (AEO),

Video Surveillance Teams (VST), Video Viewing Team (VVT), Accounting Teams (AT), Complaint

Monitoring Control Room and Call Centre, Media Certification and Monitoring Committee (MCMC),

Flying Squads (FS), Static Surveillance Team (SST) and Expenditure Monitoring Cell.

The Election Budget

Election Commission

The Secretariat of the Election Commission has an independent budget, which is finalized after

consultation between the Election Commission and the Finance Ministry of the Union Government.

Finance Ministry generally accepts the recommendations of the EC for its budgets. However, the major

expenditure on actual conduct of elections is reflected in the budgets of the concerned constituent units of

the Union Government. For the Parliamentary elections, the expenditure is borne entirely by the Union

Government of India whereas for the State Legislature and Assembly elections, the expenditure is borne

by the concerned State. In cases of simultaneous elections to the Parliament and State Legislature, sharing

of expenditure takes place between the Parliament and the concerned State. The expenditure related to

preparation of electoral rolls and electors identity cards is shared equally between the two. Every state

sends the expenditure statements to the Centre for reimbursement at the end of parliamentary elections.

The Union Ministry then audits the statements and reimburses the states accordingly.

Let us have a look at the data in detail. India being the largest democracy in the world, conducting

elections is a costly exercise. The first general elections held in 1952 cost the exchequer Rs. 10.45 crores.

This rose to Rs. 948 crores in 1999 which went up to Rs. 1,400 crores in 2009 Lok Sabha polls. The cost

expended per elector has gone up from Rs. 0.60 in 1952 to Rs. 12 in 2009. The Election Commission has

estimated the expenditure for the 2014 Lok Sabha Elections to be Rs. 3,500 crores which is nearly 150

percent the amount spent on the last General Elections. The estimate doesnt take into account the

expenses incurred for the security and the amount each political party will spend for its campaign. The

security expenses are borne by the State Governments. The jump in election costs is attributed to inflation

and the increase in awareness campaigns run by the Election Commission. EC starts running these


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awareness campaigns six months prior to the polling to encourage people to enroll and vote. The expenses

list includes advertisements, staged street plays, and digitization of the electoral rolls to name a few.

Election Commission also spends a significant amount in trying to mitigate the malpractices that takes

place during the elections like buying of votes, distributing cash and alcohol to voters.

Indias national election poses a huge administrative challenge considering the size of the democracy.

Lok Sabha election involves nearly 11 million government workers, more than 900,000 polling stations

and nearly 1.7 million electronic voting machines, which amounts to high administrative costs. The cost

per EVM was Rs.5, 500 at the time the machines were purchased in 1989-90. Even though the initial

investment can be considered to be expensive, according to EC this is more than neutralized by the

savings in the matter of printing of ballot papers, their transportation, storage etc., and the substantial

reduction in the counting staff and the remuneration paid to them. Currently the cost of EVM machines is

Rs. 10,500. The Election Commission sends personnel and supplies to every corner of India using cars,

trains, planes, elephants, mules, camels and boats. Payment of honorarium to officials who are involved in

election related work, their training, and travel are all taken care by the Election Commission. Polling

stations can be found in each nook and corner right from the desert sands of Rajasthan to the snowy

Himalayan Mountains to the tiny islands in the Indian Ocean. The Election Commission is of the view

that no elector should have to travel more than two kilometers for casting his vote.

The election spending has benefited various business such as media and advertising, consumer-based

firms that capitalize indirectly on the overall jump in spending.

The cost for conducting elections is tracked by theMinistry of Statistics & Programme Implementation

(MOSPI).

State-wise Expenditu re

The Constituent of India is divided into large number of States and Union Territories. The election spend

across each constituency is spread proportionately. States with greater number of seats require more funds

for preparation as compared to others. Also, states such as Assam features high in expenditure list due to

insurgency in the region, leading to heightening security and raising the cost of election in the state.

Maharashtra leads the list of the 2009selection spending with a total expense of Rs. 155 crores followed

byWest Bengal (Rs 150 crores) and Assam (Rs 97 crores). In fact, the total expenditure incurred by the

top five states comprised 50% of the total election expenditure.
http://www.hindustantimes.com/elections2014/west-bengalhttp://www.hindustantimes.com/elections2014/west-bengal


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Candidates and Poli tical Parti es

The spending by the Election Commission seems to be miniscule in comparison to the overall spending

by the candidates and political parties in the race for power. The overall spending of the ongoing 2014

Lok Sabha Elections (estimated: Rs. 30,500 crores) is touted to be second only to the US Presidential

elections (Rs. 42, 700 crores).

Representation of Peoples Act, 1951, Part II , Chapter VIII requires the candidate to maintain a separate

bank account of all the expenditure incurred in connection with the election between the date of

nomination and result declaration both inclusive. Within 30 days from the date of election the candidate

needs to submit the account of election expenses to the district election officer. The Act also makes it

mandatory for the candidate to not to exceed the prescribed expenditure limit. The Election Commission

has been given the authoritarian powers to keep the tab on the expenditures and if defaulted take the

necessary actions.

The ceiling for expenses set was Rs. 40 lakhs for big constituencies like Maharashtra, Madhya Pradesh,

Uttar Pradesh, West Bengal and Karnataka and Rs. 20 lakhs for smaller ones like Goa on par with other

hilly and north eastern states in 2009. This was raised to Rs. 70 lakhs and Rs. 54 lakhs respectively for the

upcoming 2014 Lok Sabha elections. According to an analysis by Association for Democratic Reforms

(ADR) and National Election Watch (NEW), out of 437 MPs who submitted their election expenditure

statements, on an average each MP spent of Rs. 14.62 lakhs or about 59% of the average expense limit in

2009. The government also cleared the proposal to raise expenditure limits for assembly elections, with a

maximum of Rs. 28 lakhs and a minimum of Rs. 20 lakhs in North Eastern and hill states. The highest

average election expenditure was recorded in Tripura with an average election expenditure of Rs. 18.79

lakhs followed by Jharkhand (Rs. 18.73 lakhs), Uttarakhand (Rs. 18.49 lakhs) and Assam (Rs. 17.77

lakhs).

Final Word

India is one of the biggest countries in the world and second most populous nation. This makes

conducting elections in India a huge exercise in terms of money and time. Also, being a democratic

nation, the electoral result plays an important role in shaping the future of the country. In terms of

democracy, India though being the biggest democracy in the world is still a young nation having gained

Independence in 1947. Thus, methods employed by the country may not be perfect but the job done by

the Election Commission is commendable. The expenses involved is huge but can be compensated if the

results and conduct is transparent and malpractices dont find its way in the process.


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The cost expended for the election seems to be relevant only in the absence of malpractices that takes

place in the elections. The expense sheet shared by the elected MPs shows only 59% of the total ceiling

limits being expensed for campaigning for the seats. However, majority feel it isnt the case and major

part of the expenses goes unaccounted. Though keeping a track on each and every nomineesexpenditure

and cost is difficult, the stricter regulations are required.

The Election Commission realizes the nature of responsibility it bears and has introduced many incentives

for the voters to make it easier for them to vote. The cost expended makes sense only when the voter

turnout increases. With the low turnout which can be as low as 45-50% in some constituencies undoes the

work and money put behind for conducting the elections. The election commission needs to have a look at

the technology and policy of the voter identity cards with rising complaints each year about the same.

Database management also needs to be looked at since many people this year had bad experiences with

their name being absent from the electoral role or data present in the role being incorrect. Maybe private-

public partnership can be beneficial for certain exercises carried out by the Election commission.

Another issue that disturbs the process of free and fair elections and hurts the expenditure sheet of the

Government is the security breaches that occurs every now and then in each election especially in smaller

constituencies. The exercise will be futile if finally the results are impacted by these breaches.

Our interest always lies in the party to be elected instead of the work that goes behind. As a management

student what can be better than to understand the work behind such a major exercise. The economics that

goes behind the elections is the stepping stone for the economics that will finally drive the nation.


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Bibliography/References

http://www.indian-elections.com/about-election-commission.html

http://eci.nic.in/eci_main1/current/ImpIns1_06032014.pdf

http://eci.nic.in/eci/eci.html

http://eci.nic.in/eci_main1/evm.aspx

http://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-

most-complex-management-exercise/

http://www.moneylife.in/article/does-the-election-expenses-limit-have-any-meaning/36621.html

http://www.bemoneyaware.com/blog/cost-of-india-lok-sabha-elections-2014/

http://www.elections.tn.gov.in/Compendium_of_Instruction-2014.pdf

https://casi.sas.upenn.edu/system/files/Gowda-

Sridharan,+ELJ+paper,+Reforming+India's+Party.pdf

http://opengovernanceindia.org/wrednxe/lok-sabha-election-expenditure

http://timesofindia.indiatimes.com/india/Polls-to-cost-country-Rs-3500-crore-this-

year/articleshow/30587202.cms

http://www.firstpost.com/politics/rs-18000-cr-will-be-spent-in-election-2014-and-much-of-it-in-

black-1420709.html

http://www.ibtimes.com/indias-2014-election-cost-5-billion-second-only-price-tag-2012-us-

presidential-election-1570668

http://www.thehindu.com/news/expense-on-elector-has-gone-up-20-times-since-first-general-

election/article5774047.ece

http://ibnlive.in.com/news/election-commission-not-in-favour-of-raising-poll-expense-

limit/376231-37-170.html

http://www.dailypioneer.com/nation/lok-sabha-poll-expenses-set-to-top--rs5000-cr-ec.html
http://www.indian-elections.com/about-election-commission.htmlhttp://www.indian-elections.com/about-election-commission.htmlhttp://eci.nic.in/eci_main1/current/ImpIns1_06032014.pdfhttp://eci.nic.in/eci_main1/current/ImpIns1_06032014.pdfhttp://eci.nic.in/eci/eci.htmlhttp://eci.nic.in/eci/eci.htmlhttp://eci.nic.in/eci_main1/evm.aspxhttp://eci.nic.in/eci_main1/evm.aspxhttp://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://www.moneylife.in/article/does-the-election-expenses-limit-have-any-meaning/36621.htmlhttp://www.moneylife.in/article/does-the-election-expenses-limit-have-any-meaning/36621.htmlhttp://www.bemoneyaware.com/blog/cost-of-india-lok-sabha-elections-2014/http://www.bemoneyaware.com/blog/cost-of-india-lok-sabha-elections-2014/http://www.bemoneyaware.com/blog/cost-of-india-lok-sabha-elections-2014/http://www.moneylife.in/article/does-the-election-expenses-limit-have-any-meaning/36621.htmlhttp://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://www.forbes.com/sites/saritharai/2014/03/05/coming-soon-indias-general-elections-worlds-most-complex-management-exercise/http://eci.nic.in/eci_main1/evm.aspxhttp://eci.nic.in/eci/eci.htmlhttp://eci.nic.in/eci_main1/current/ImpIns1_06032014.pdfhttp://www.indian-elections.com/about-election-commission.html


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Appendix

Exhibit- I

The map below helps us in understanding the distribution of election expenses of 2009.

Figure 1 : Source - http://www.hindustantimes.com/elections2014/state-of-the-states/states-where-most-

money-is-spent-in-conducting-general-elections/article1-1211457.aspx


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Exhibit- II

Figure 2 : Source -http://mospi.nic.in/Mospi_New/site/India_Statistics.aspx

Year of Conducting

election Preparation and

printing of Conduct of Tota

Electoral officers Electoral Rolls Election

1 2 3 4

1999 840454 1566007 7070370 9476831

2004 (1) 963322 1280165 7917382 10160869

2009 (2) .. .. .. 11143845

2009 (2)

State:

Andhra Pradesh .. .. .. .. 700000

Arunachal Pradesh .. .. .. .. 302200

Assam .. .. .. .. 970000

Bihar .. .. .. .. 350000Chattisgarh .. .. .. .. 280000

Goa .. .. .. .. 45000

Gujarat .. .. .. .. 700000

Haryana .. .. .. .. 87000

Himachal Pradesh .. .. .. .. 11830

Jammu & Kashmir .. .. .. .. 100000

Jharkhand .. .. .. .. 260000

Karnataka .. .. .. .. 700000

Kerala .. .. .. .. 25700

Madhya Pradesh .. .. .. .. 400000

Maharashtra .. .. .. .. 1550000

Manipur .. .. .. .. 60000

Meghalaya .. .. .. .. 10000

Mizoram .. .. .. .. 110000

Nagaland .. .. .. .. 50000

Orissa .. .. .. .. 460000Punjab .. .. .. .. 190000

Rajasthan .. .. .. .. 50680

Sikkim .. .. .. .. 30000

Tamil Nadu .. .. .. .. 806035

Tripura .. .. .. .. 110000

Uttar Pradesh .. .. .. .. 681300

Uttarakhand .. .. .. .. 20000

West Bengal .. .. .. .. 1500000

Union Territory:

A & N Islands .. .. .. .. 18000

Chandigarh .. .. .. .. 9000

Dadra & Nagar Haveli .. .. .. .. 300000

Daman & Diu .. .. .. .. 10000

Delhi .. .. .. .. 225200

Lakshadweep .. .. .. .. 8900Puduchery .. .. .. .. 13000

(1) This is as per the information of projection/likely expenditure to be incurred,by the respective state Govt. and UT

(2) Figures related to deemand received from State/UTs for conducting of general election 2009 of Lok Sabha.

Source: Ministry of Law and Justic

Administration. The expenditure also includes the Govt.of India's share paid/to be paid to the respective State Govt

of India in connection with the election to the 14th Lok Sabha.The figures for 2004' also includes expenditure inc

State/Ut legislative Assemblies elections which held with `2004' Lok Sabha elections.

ELECTORAL STATISTICS

EXPENDITURE INCURRED IN ELECTION TO THE LOK SABHA

(` '000

Expenditure Incurred on
http://mospi.nic.in/Mospi_New/site/India_Statistics.aspxhttp://mospi.nic.in/Mospi_New/site/India_Statistics.aspxhttp://mospi.nic.in/Mospi_New/site/India_Statistics.aspxhttp://mospi.nic.in/Mospi_New/site/India_Statistics.aspxhttp://mospi.nic.in/Mospi_New/site/India_Statistics.aspx


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Provided that a political party may, in the case where any of the persons referred to in clause (i) or, as the

case may be, in clause (ii) dies or ceases to be a member of such political party, by further communication

to the Election Commission and the Chief Electoral Officers of the States, substitute new name, during

the period ending immediately before forty-eight hours ending with the hour fixed for the conclusion of

the last poll for such election, for the name of such person died or ceased to be a member, for the

purposes of designating the new leader in his place.]

(2) The account shall contain such particulars, as may be prescribed.

(3) The total of the said expenditure shall not exceed such amount as may be prescribed.

78. Lodging of account with the district election officer.4[(1)] Every contesting candidate at an

election shall, within thirty days from the date of election of the returned candidate or, if there are more

than one returned candidate at the election and the dates of their election are different, the later of

those two dates, lodge with the 5[district election officer] an account of his election expenses which

shall be a true copy of the account kept by him or by his election agent under section 77.]


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Exhibit- IV

Figure 3 : Source - http://www.moneylife.in/article/does-the-election-expenses-limit-have-any-

meaning/36621.html

cost of conducting elections in india

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