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India

In law
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In practice
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There is no direct public funding for parties or candidates in India. Indirect public funding, however, in the form of free airtime on state run television, is granted to parties. Non-financial state resources were frequently abused during the 2014 elections. No laws restrict cash and anonymous donations, and individuals can legally donate as much as they like. Candidates are legally required to adhere to spending limits during campaigns, but in practice, few actually do. Parties are not subject to any restrictions on expenditure. Candidate limits were regularly breached in the 2014 campaign. In terms of reporting requirements, candidates must report only during campaigns, while parties should submit annual and post election reports. In practice, the reports submitted often lack important details on contributors and donations, and are not totally available to the public. As such, media coverage of official political finance data is scant at best, though violations are common. The independent political activities of third party actors are not regulated, and the public has no access to information on the financial workings of these actors. The Electoral Commission (ECI) is responsible for overseeing political finance. Its appointees are not fully merit-based, and their independence is less than guaranteed. Despite having sufficient staff and budget, the ECI does not audit any party reports, and its recommendations for sanctions are frequently ignored.

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    Direct and Indirect Public Funding

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      Direct Public Funding
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        1
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        NO
        In law, there is direct public funding for electoral campaigns.More about indicator

        There have been government reports and civil society recommendations on introducing direct public funding of elections, but the current position is that there is no law which permits direct public funding of elections in India.

        Scoring Criteria

        A YES score is earned where there is direct public funding for both political parties and individual candidates to campaign. A 100 also applies where only one of the two actors can be elected and, therefore, only one is entitled to direct public funding.

        A MODERATE score is earned where per law only one of the two actors (either political parties or individual candidates) is allocated direct public funding to campaign, even though both can be elected.

        A NO score is earned where no such law exists.

        Sources

        No such law exists.

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        NO
        In law, there is a transparent and equitable mechanism to determine direct public funding for electoral campaigns.More about indicator

        There is no law providing for direct public funding of elections in India and therefore no mechanisms to determine such funding exist.

        Scoring Criteria

        A YES score is earned where: 1) direct public funding for political parties and individual candidates' electoral campaigns is allocated through a clearly defined calculation mechanism that is transparent and equitable, and 2) there are clearly defined eligibility criteria.

        A MODERATE score is earned where direct public funding for political party and individual candidates' electoral campaigns is allocated through a clearly defined calculation mechanism that is transparent and equitable, but eligibility criteria are not clearly defined.

        A NO score is earned where no such law exists.

        Sources

        No such law exists.

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        50
        In practice, to what extent is the mechanism to determine direct public funding for electoral campaigns transparent, equitable and consistently applied?More about indicator

        Since there is no law allowing for direct funding of elections in India, this indicator is not directly applicable. However, there have been government reports and civil society recommendations of direct funding of elections. Several government committees in the past have recommended some form of direct funding of elections - Indrajit Gupta Committee on State Funding of Elections (1998), 170th Report of the Law Commission of India (1999), National Commission to Review the Working of the Constitution (2001) and Fourth Report on “Ethics in Governance” in the Second Administrative Reforms Commission (2007). The summary of these recommendations is available in the Background Paper on Electoral Reforms brought out by the National and Regional Consultation on Electoral Reforms initiated by the Ministry of Law and Justice in 2010. Though the government has not come out with a report on these consultations so far, but stakeholders have suggested that there should be state funding of elections with strict vigil on the expenditures and some funding should also be extended to independents and upcoming political parties.

        One model of direct funding which emerged from outside government committees (civil society or political scientists) suggests state funding to any party or candidate who secures more than a certain percentage of votes should be reimbursed Rs 100 (1.64 USD) per vote secured by them.

        T.S. Krishna Murthy, Former Chief Election Commissioner of India, said that "There is urgent need for an absolute change in the law relating to donations. Corporates/Individuals/Institutions should be allowed to donate only to a newly setup National Election Fund which will qualify for 100% tax exemption. No political party should be allowed to get donations except from Members of the Party. Even here, there should be ceiling for Members' donations as is prevalent in Canada. This Fund should be administered by the Election Commission supported by guidelines framed in consultations with all State/National Parties. The Fund will be allocated to all candidates and no candidate can spend from funds other than allocated. This will ensure a level playing field among all contesting candidates and they will be required to render accounts for the contribution. As far as possible, funding in such cases should be maximum in kind to prevent misuse. The second advantage is that this method will snap the obnoxious incestuous relationship between political parties and the corporates/individuals as is in vogue now."

        Prof. Trilochan Sastry said that "Association of Democratic Reform’s position has been that if there is public funding, there should be corresponding transparency in private funding received by political parties and candidates. In many countries funding by corporates is limited or banned. There are limits in the USA and in Mexico it is banned. You can’t have it both ways that we will take huge amounts of money from corporations and at the same time take public funding. There has to be greater transparency of international standards wherever there are corporate, individual and third party donations. If the public has to fund part of the party’s or candidate’s elections, people have the right to know where the private funding is coming from. Therefore, if direct public funding is to be allowed, the present laws need to change to reflect conditions that –

        1) Source of private funding is accounted for even for the smallest contribution; 2) There should be corresponding limits on private funding; 3) Third party contribution has to be transparent; 4) Violations should be made accountable with penalties."

        Advocate Ranjeev Dubey says that "a society that does not like to pay its building maintenance dues or for the electricity it consumes, leave alone its direct and indirect taxes, is unlikely to immediately find a realistic way to fund elections. That said, if the funds are available, I would like to see state funding. Several countries have successful models: we don’t have to reinvent the wheel. That leaves open the compliance problem. The answer can only be that, since this is public money, state funding is available to those who have already opened their books to not just audit, but to Right to Information as well. The model could require that candidates start out small and demonstrate some success before they qualify for state funding. Then, the quantity of funding would increase as results improve (percentage polled, not seats won). It’s possible to have a formula. The state disburses funds per constituency contested. To qualify, the candidate must have polled at least 10% votes at a previous election of the same level or one level below (state and union elections being two levels). If you polled 10% in 3 constituencies, the state will underwrite 6 constituencies next time provided your candidate files his nomination papers and follows through, etc."

        Dr. Jayaprakash Narayan, President of Lok Satta Party, says that "Our experience shows that the real cost of political management is the election cost, a party's management cost is not that much. The model of public funding we had suggested was that a political party be given an amount based on the number of vote obtained by a political party in the previous election multiplied by 'x' amount of money per vote, and this funding should be used for the party's non-electoral activities, like maintaining its office, research, etc. The purpose of public funding is to improve the quality of our democracy. Political parties are custodians of our democracy. Competition is between parties, party candidates or independents don't matter. If the individual is taken as a unit, he is here today and will go tomorrow. So we believe that funding should be given to political parties. Misuse of the public funding should invite significant monetary penalties and extreme penalization should be deregistration of the party. But direct public funding is not the issue in India, the real issue is the illegitimate election expenditure and therefore raising illegitimate money for that. Much of the discussion related to Indian political funding is completely unproductive because 80% - 90% of the funding is unrelated to the campaign. It is about vote buying, distribution of liquor and other short term goodies. One cannot create funding for it because it is wrong, illegitimate and immoral and the democracy is perverted because of it."

        Peer Reviewer comment: Agree. Although there is no law on direct public funding, the proposals so far are towards transparent mechanisms with clear criteria for public fund allocation, including recommendations for internal transparency and accountability within the political parties to be funded. Same sources as cited in the Current Research except to add an early recommendation on the same lines, Sridharan (1999). Also, a caveat - the Gupta Committee (1998) recommended public funding largely in kind.

        Scoring Criteria

        A 100 score is earned where: 1) electoral campaigns allocations are always defined through a clearly defined transparent and equitable calculation mechanism, and 2) the defined eligibility criteria are applied consistently.

        A 50 score is earned where: 1) electoral campaign allocations are usually defined through a clearly defined transparent and equitable calculation mechanism but exceptions exist, or 2) the eligibility criteria are usually applied but exceptions exist.

        A 0 score is earned where: 1) political campaign allocations are rarely or never defined through a clearly defined transparent and equitable calculation mechanism, or 2) the defined eligibility criteria are rarely applied.

        Sources
        1. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        2. "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]

        3. Background Paper on Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, December 2010; (Attachment) http://lawmin.nic.in/legislative/ereforms/ereforms.htm

        4. Points To Ponder-On Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, 27 April 2011 (Attachment) http://lawmin.nic.in/legislative/ereforms/ereforms.htm

        5. Interview with Advocate Ranjeev C Dubey, Managing Partner, N South, Advocates [http://www.ranjeevdubey.com/]; Date of interview - 30 July 14.

        6. "Private funding of parties root of corruption, needs to be banned: SY Quraishi", Economic Times, 25 April 2014, http://articles.economictimes.indiatimes.com/2014-04-25/news/494061851opinion-polls-exit-polls-parties

        7. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        8. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        Reviewer's sources: 1`. "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]. 2. Background Paper on Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, December 2010; (Attachment) http://lawmin.nic.in/legislative/ereforms/ereforms.htm 3. Points To Ponder-On Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, 27 April 2011 http://lawmin.nic.in/legislative/ereforms/ereforms.htm
        4. "Committee on State Funding of Elections", Ministry of Law and Justice, 1998. http://lawmin.nic.in/ld/erreports/Indrajit%20Gupta%20Committee%20Report.pdf.
        5. “Toward State Funding of Elections in India: a Comparative Perspective on Possible Options”, E. Sridharan, JOURNAL OF POLICY REFORM, Vol. 3, No. 3 (October) 1999.G403

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        50
        In practice, to what extent does the entity in charge of public funding make disbursement information publicly available?More about indicator

        Since there is no law providing for direct public funding and no such funding is disbursed to political parties or candidates by any entity, this indicator is not applicable.

        However, there have been government reports and civil society recommendations of direct funding of elections. Several government committees in the past have recommended some form of direct funding of elections - Indrajit Gupta Committee on State Funding of Elections (1998), 170th Report of the Law Commission of India (1999), National Commission to Review the Working of the Constitution (2001) and Fourth Report on “Ethics in Governance” in the Second Administrative Reforms Commission (2007). The summary of these recommendations is available in the Background Paper on Electoral Reforms brought out by the National and Regional Consultation on Electoral Reforms initiated by the Ministry of Law and Justice in 2010. Though the government has not come out with a report on the consultations so far, stakeholders have suggested that there should be state funding of elections with strict vigil on the expenses and also that some funding should be extended to independents and upcoming political parties.

        One model of direct funding which emerged from outside government committees (civil society or political scientists) suggests state funding to any party or candidate who secures more than a certain percentage of votes should be reimbursed Rs 100 (1.64 USD) per vote secured by them.

        T.S. Krishna Murthy, former Chief Election Commissioner of India, said that "There is urgent need for an absolute change in the law relating to donations. Corporates/Individuals/Institutions should be allowed to donate only to a newly setup National Election Fund which will qualify for 100% tax exemption. No political party should be allowed to get donations except from Members of the Party. Even here, there should be ceiling for Members' donations as is prevalent in Canada. This Fund should be administered by the Election Commission supported by guidelines framed in consultations with all State/National Parties. The Fund will be allocated to all candidates and no candidate can spend from funds other than allocated. This will ensure a level playing field among all contesting candidates and they will be required to render accounts for the contribution. As far as possible, funding in such cases should be maximum in kind to prevent misuse. The second advantage is that this method will snap the obnoxious incestuous relationship between political parties and the corporates/individuals as is in vogue now."

        Prof. Trilochan Sastry said that "Association of Democratic Reform’s position has been that if there is public funding, the present laws need to change to reflect conditions that –

        1) Source of private funding is accounted for even for the smallest contribution; 2) There should be corresponding limits on private funding; 3) Third party contribution has to be transparent; 4) Violations should be made accountable with penalties."

        Advocate Ranjeev Dubey says that "If the funds are available, I would like to see state funding. Several countries have successful models: we don’t have to reinvent the wheel. That leaves open the compliance problem. The answer can only be that, since this is public money, state funding is available to those who have already opened their books to not just audit, but to Right to Information as well. The model could require that candidates start out small and demonstrate some success before they qualify for state funding. Then, the quantity of funding would increase as results improve (percentage polled, not seats won). It’s possible to have a formula. The state disburses funds per constituency contested. To qualify, the candidate must have polled at least 10% votes at a previous election of the same level or one level below (state and union elections being two levels). If you polled 10% in 3 constituencies, the state will underwrite 6 constituencies next time provided your candidate files his nomination papers and follows through, etc."

        Dr. Jayaprakash Narayan, President of Lok Satta Party, says that "Our experience shows that the real cost of political management is the election cost, a party's management cost is not that much. The model of public funding we had suggested was that a political party be given an amount based on the number of vote obtained by a political party in the previous election multiplied by 'x' amount of money per vote, and this funding should be used for the party's non-electoral activities, like maintaining its office, research, etc. The purpose of public funding is to improve the quality of our democracy. Political parties are custodians of our democracy. Competition is between parties, party candidates or independents don't matter. If the individual is taken as a unit, he is here today and will go tomorrow. So we believe that funding should be given to political parties. Misuse of the public funding should invite significant monetary penalties and extreme penalization should be deregistration of the party. But direct public funding is not the issue in India, the real issue is the illegitimate election expenditure and therefore raising illegitimate money for that. Much of the discussion related to Indian political funding is completely unproductive because 80% - 90% of the funding is unrelated to the campaign. It is about vote buying, distribution of liquor and other short term goodies. One cannot create funding for it because it is wrong, illegitimate and immoral and the democracy is perverted because of it."

        Scoring Criteria

        A 100 score is earned where: 1) complete information on the disbursements is published less than a month after disbursement, and 2) the information is available on the Internet for free or in hard copy at photocopying cost.

        A 50 score is earned where: 1) the information published is incomplete or published more than two months after disbursement, or 2) obtaining the information costs more than photocopying.

        A 0 score is earned where: 1) disbursement information is published more than four months after disbursement, or 2) no disbursement information is published or released upon request.

        Sources
        1. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        2. "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]

        3. Background Paper on Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, December 2010; http://lawmin.nic.in/legislative/ereforms/ereforms.htm

        4. Points To Ponder-On Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, 27 April 2011 http://lawmin.nic.in/legislative/ereforms/ereforms.htm

        5. Interview with Advocate Ranjeev C Dubey, Managing Partner, N South, Advocates [http://www.ranjeevdubey.com/]; Date of interview - 30 July 14.

        6. "Private funding of parties root of corruption, needs to be banned: SY Quraishi", Economic Times, 25 April 2014, http://articles.economictimes.indiatimes.com/2014-04-25/news/494061851opinion-polls-exit-polls-parties

        7. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        8. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

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      Indirect Public Funding
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        MODERATE
        In law, use of state resources in favor of or against political parties and individual candidates is prohibited.More about indicator
        1. Article 324 of the Constitution of India gives the ECI superintendence, direction and control over preparation of electoral rolls and conduct of elections. Under these plenary powers, the ECI has been issuing instructions / orders to fill the gaps in the statutory election laws. During the election period, the Election Commission of India (ECI) imposes a Model Code of Conduct (MCC) which are a set of guidelines for general conduct of candidates and parties during the election period, restrictions on abuse of power by parties in power and guidelines on election manifestos of political parties. However, there are no provisions against such abuse of state resources outside of the official election period.

        2. Certain provisions of this Code issued before the General Elections 2014 quoted below restricts abuse of state power to divert state resources/ finances for electoral gains by the party in power and also requires parties to reflect the rationale for the promises made in their election manifestos and indicate the ways and means to meet the financial requirements for these promises :

        "Vll. Party in Power The party in power whether at the Centre or in the State or States concerned, shall ensure that no cause is given for any complaint that it has used its official position for the purposes of its election campaign and in particular -

        (i) (a) The Ministers shall not combine their official visit with electioneering work and shall not also make use of official machinery or personnel during the electioneering work. (b) Government transport including official air-crafts, vehicles, machinery and personnel shall not be used for furtherance of the interest of the party in power;

        (ii) Public places such as maidens etc., for holding election meetings, and use of helipads for air-flights in connection with elections shall not be monopolized by itself. Other parties and candidates shall be allowed the use of such places and facilities on the same terms and conditions on which they are used by the party in power;

        (iii) Rest houses, dark bungalows or other Government accommodation shall not be monopolized by the party in power or its candidates and such accommodation shall be allowed to be used by other parties and candidates in a fair manner but no party or candidate shall use or be allowed to use such accommodation (including premises appertaining thereto) as a campaign office or for holding any public meeting for the purposes of election propaganda;

        (iv) lssue of advertisement at the cost of public exchequer in the newspapers and other media and the misuse of official mass media during the election period for partisan coverage of political news and publicity regarding achievements with a view to furthering the prospects of the party in power shall be scrupulously avoided.

        (v) Ministers and other authorities shall not sanction grants payments out of discretionary funds from the time elections are announced by the Commission; and

        (vi) From the time elections are announced by Commission, Ministers and other authorities shall not -. (a) announce any financial grants in any form or promises thereof; or (b) (except civil servants) lay foundation stones etc. of projects or schemes of any kind; or (c) make any promise of construction of roads, provision of drinking water facilities etc.; or (d) make any ad-hoc appointments in Government, Public Undertakings etc. which may have the effect of influencing the voters in favor of the party in power.

        Note: The Commission shall announce the date of any election which shall be a date ordinarily not more than three weeks prior to the date on which the notification is likely to be issued in respect of such elections.

        (vii) Ministers of Central or State Government shall not enter any polling station or place of counting except in their capacity as a candidate or voter or authorized agent.

        VIII. Guidelines on Election Manifestos (iii) ln the interest of transparency , level playing field and credibility or promises, it is expected that manifestos also reflect the rationale for the promises and broadly indicate the ways and means to meet the financial requirements for it. Trust of voters should be sought only on those promises which are possible to be fulfilled."

        1. The MCC is a self regulatory code arrived at in consultation and consensus with political parties. It comes into effect for political parties and candidates immediately with the announcement of the election schedule by ECI which is usually a few weeks before the beginning of the formal election process. The MCC is reissued before every major elections often with some modifications/ tweaking (the most recent one of 19 February 2014 had a new section - VII Guidelines on Election Manifestos).

        2. Violations of most of the provisions of the MCC in the categories of I. General Conduct; II. Meetings; III. Procession and IV. Polling Day, correspond to electoral offenses/ violations of electoral practices contained in the Indian Penal Code, 1860, Code of Criminal Procedure, 1973 and Representations of People Act, 1951. The other provisions, V. Polling Booth, VI. Observers, VII. Party in Power and VIII. Guidelines on Election Manifestos, are generally advisory in nature and does not have any statutory backing. Though para 16 A of the Election Symbols (Reservation and Allotment) Order, 1968, which is administrative in nature issued pursuant to the ECI's plenary powers under Article 324 of the Constitution of India, does empower the ECI to suspend or withdraw recognition of a political party as national or state party in the case of violation of the MCC, in effect, when the ECI enforces the MCC, it is actually enforcing only the statutory provisions that Parts I to IV are rooted in.

        3. The absence of a substantive law governing Parts VI and VII of the MCC, makes the derecognition threat difficult to implement for violations of these two provisions. While Parliamentarians have called for giving statutory backing for the MCC to give it more teeth, ECI believes that a statute may make it difficult to implement the MCC in the middle of elections where violations have to be handled with speed and urgency. There is also a view that in the process of turning it into a statute, politicians may tweak the law in their favor which may make it impossible for the ECI to enforce it during elections.

        4. Article 324 of the Constitution states that - "324. Superintendence, direction and control of elections to be vested in an Election Commission.—(1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament and to the Legislature of every State and of elections to the offices of President and Vice-President held under this Constitution shall be vested in a Commission (referred to in this Constitution as the Election Commission)."

        5. Para 16A of the Election Symbols (Reservation and Allotment) Order, 1968, states that - "16A. Power of Commission to suspend or withdraw recognition of a recognised political party for its failure to observe Model Code of Conduct or follow lawful directions and instructions of the Commission-

        Notwithstanding anything in this Order, if the Commission is satisfied on information in its possession that a political party, recognised either as a National party or as a State party under the provisions of this Order, has failed or has refused or is refusing or has shown or is showing defiance by its conduct or otherwise (a) to observe the provisions of the ‘Model Code of Conduct forGuidance of Political Parties and Candidates’ as issued by the Commission in January, 1991 or as amended by it from time to time, or (b) to follow or carry out the lawful directions and instructions of the Commission given from time to time with a view to furthering the conduct of free, fair and peaceful elections or safeguarding the interests of the general public and the electorate in particular, the Commission may, after taking into account all the available facts and circumstances of the case and after giving the party reasonable opportunity of showing cause in relation to the action proposed to be taken against it, either suspend, subject to such terms as the Commission may deem appropriate, or withdraw the recognition of such party as the National Party or, as the case may be, the State Party."

        1. Government subsidies are however, provided through free airtime on public radio and television (Section 39A of the Representation of People Act 1951 read with Rule 85C of Conduct of Elections Rules 1961) and issue of free copies of electoral rolls by the Election Commission of India during elections to recognized political parties and supply of three copies of polling station list (Section 78A and 78B of the Representation of People Act 1951 read with Rule 85D of Conduct of Elections Rules 1961). Political parties are also exempted from paying Income Tax (Section 13A of the Income Tax Act, 1961) and are also allotted land/ accommodation (Ministry of Urban Development last issued its policy on 9 November 2012).

        Peer Reviewer comment Since the restrictions on misuse of state resources come under Part VII of the Model Code without full force of law, and since the restrictions apply only from the coming into force of the Code with the announcement of elections, there is still scope for misuse of official resources and these have occurred now and then, the score is appropriate.

        Scoring Criteria

        A YES score is earned where there is an explicit ban on the use of state resources in favor of or against political parties and individual candidates. A YES is also earned where there are clearly defined exceptions, which are accessible to all actors equally.

        A MODERATE score is earned where an explicit ban exists but it only applies to one of the two actors, even though both can be elected. A NO score is earned where no such law exists.

        A NO score is also earned where the law exists, but allows discretionary exceptions.

        Sources
        1. The Constitution of India, Article 324, http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss(21).pdf

        2. Election Commission of India, Model Code of Conduct for the Guidance of Political Parties and Candidates, No.437/6/Manifesto/2013, dated 19 February 2014. http://eci.nic.in/ecimain1/current/ci19022014.pdf

        3. Election Symbols (Reservation and Allotment) Order, 1968, Para 16A, 1968 http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/PoliticalParty&ElectionSymbolOrder2013Eng.pdf

        4. Electoral Reforms-Code of Conduct for Political Parties & Anti Defection Law, Department-related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, Report no. 61, August 2013 http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Personnel,%20PublicGrievances,%20Law%20and%20Justice/61.pdf

        5. Free airtime: Section 39A of the Representation of the People Act 1951 read with Rule 85C of Conduct of Elections Rules 1961 [http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf] [http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf]

        6. Free supply of materials: Sections 78A and 78B of the Representation of the People Act 1951 read with Rule 85D of Conduct of Elections Rules 1961 [http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf] [http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf]

        7. Exemption from paying income tax: Section 13A of the Income Tax Act 1961 [http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/DTL2013/section13a.htm]

        8. Allottment of land/ accommodation: Government policy No. 24(401)/2001-CDN, dated 9 November 2012, http://ldo.nic.in/OfficeOrders/LeaseAdministration/No24(401)-2001-cdn.pdf

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        0
        In practice, to what extent are no state resources used in favor of or against political parties and individual candidates' electoral campaigns?More about indicator

        There are documented evidence of occasional use of state resources in favor of parties in power. Despite the application of the Model Code of Conduct from the date of the announcement of the schedule of elections, there are instances of governments diverting state resources/ finances for electoral gains. The Code includes guidelines on general conduct of candidates and parties during the election period, restrictions on abuse of power by parties in power and guidelines on election manifestos of political parties. The Code also enjoins upon political parties to ensure that election manifestos reflect the rationale for the promises made by the parties and broadly indicate the ways and means to meet the financial requirements for it, in the interest of transparency, level playing field and credibility of promises.

        The Election Commission of India (ECI) has compiled 804433 cases of violations of the Model Code of Conduct and issued Notices in 426077 cases in the course of General Elections 2014. ECI has taken action in 976012 cases and First Information Reports (with the police) lodged in 16048 cases. Fully disaggregated data on the violation of the Code for diverting state resources is not available, but these headline numbers clearly include instances in which state resources were abused for campaign purposes.

        In the absence of a law prohibiting diversion of state resources for electoral gains, governments have announced promises, handouts and policy largesses in anticipation of elections, that is, before the Code of Conduct comes into effect. The effect of violation of the Code on political parties is suspension or withdrawal of recognition of a political party as national or state party which the the ECI finds difficult to implement. ECI monitors government announcements closely during the election period and has intervened to stop misuse of state power if it considers that there has been a violation of the Code. ECI's manner of enforcing the Code by governments has frequently been criticized for virtually bringing the government to a halt for the entire duration of elections which in the case of the 2014 elections stretched to two and half months. Governments would have to request permission from the ECI for 'no objections' to carry out its functions.

        During the 2014 general elections, for example, the ECI was able to stop the Central Government from raising gas prices which would have benefited certain corporate houses, but could not interfere with a pre-election announcement that increased the number of subsidized domestic gas cylinders. However, in the States, there were reported instances of state government giving monetary grants to particular communities, health insurance for journalists, housing projects for the poor, announcements for public works, etc. But the lack of clarity on what the ECI will allow and what not, compelled the ECI to issue a clarification on the impact of the Model Code on the government's financial matters.

        According to Dr. Jayaprakash Narayan, "because of increased monitoring and media glare, misuse of government resources in the form of vehicles or premises, etc. is not so much an issue now. But one can't have a mechanism which prohibits the government from governing. These measures amount to stifling democracy. It is ridiculous how for three to four months, the whole country comes to a standstill creating a phenomenal vacuum. Because we are a stable society, we survive it. But the EC has done little to check the way in which massive advertising expenditures are incurred by governments prior to the election announcements in building up individuals/ personalities and political parties, instead of the publicity focusing on government programs."

        According to Rajdeep Sardesai, journalist, "ECI has been more successful in checking diversion of state financial resources than checking money power during elections. Misuse of the state machinery is more common during bye-elections and Assembly (State) elections. That is because the election machinery is stronger in the Lok Sabha (to the national Parliament) general elections as the ECI has greater control on the election officials as the ECI is closely involved in their appointment. In Assembly elections, State machinery is put to greater advantage with candidates having more ability to influence lower level officials."

        Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms, believes that this is a tricky area. "If no promises are made, why should people vote for a particular party/ candidate? There are laws which require that government should maintain financial discipline. The party and/ or candidate should give a shadow budget to show where the money is going to come from. It is easier to have a check on direct freebies like TVs and mixies, but harder when policy largesse in the form of subsidies are given, like loan waivers to farmers or raising the number of subsidized gas cylinders. Even courts will not interfere on the merits of a public policy."

        Scoring Criteria

        A 100 score is earned where there is no evidence of authorities using state resources in favor of or against political parties and individual candidates. A 100 is also earned where there are clearly defined exceptions and are equally accessible to all actors.

        A 50 score is earned where: 1) documented evidence indicates occasional use of state resources in favor of or against political parties and individual candidates, or 2) clearly defined exceptions are not equally accessible to all actors.

        A 0 score is earned where documented evidence indicates regular use of state resources in favor of or against certain political parties and individual candidates.

        Sources
        1. Election Commission of India, Model Code of Conduct (MCC) Information, http://eci.nic.in/ecimain1/GE2014/MCCInformation.htm

        2. Violation of Model Code of Conduct, Election Commission of India notice to Harish Rawat, Chief Minister of Uttarakhand, dated 30 March 2014, http://eci.nic.in/ecimain1/current/NoticeHarishRawat_30032014.pdf

        3. "Govt defers gas price hike after Election Commission order", LiveMint, Pranav Nambiar & Utpal Bhaskar, 24 March 2014, http://www.livemint.com/Politics/DiHRAQr9kYRUDZ5aOJI30L/EC-asks-oil-ministry-to-defer-notification-of-new-gas-price.html

        4. "Rahul effect: Cap on LPG cylinders raised to 12", Shishir Sinha, The Hindu Businessline, 30 January 2014, http://www.thehindubusinessline.com/economy/policy/rahul-effect-cap-on-lpg-cylinders-raised-to-12/article5634649.ece

        5. "Pre-poll doles at 11th hour", Ashok Pradhan, The Times of India, 6 March 2014 http://timesofindia.indiatimes.com/city/bhubaneswar/Pre-poll-doles-at-11th-hour/articleshow/31523591.cms

        6. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        7. Interview with Rajdeep Sardesai, Journalist [http://en.wikipedia.org/wiki/Rajdeep_Sardesai] ; Date of Interview - 9 August 2014.

        8. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        9. Election Commission of India, Model Code of Conduct clarification, dated 29 March 2014. https://www.dropbox.com/s/9erkmsurvmvmk9c/MCC-clarification-29032014.pdf?dl=0

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        7
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        MODERATE
        In law, political parties and individual candidates have free or subsidized access to equitable air time for electoral campaigns?More about indicator

        Since the 1996 elections, under the Scheme for Use of Government owned Electronic Media by Political Parties during Elections, the state has allocated free time on state-owned television and radio networks to recognised National and State political parties. Unrecognized parties and independent candidates are excluded under this facility. The Scheme was provided a statutory cover by amending Representation of the People Act 1951 in 2003.

        Section 6 of the Election Symbols (Reservation and Allotment) Order, 1968 classifies political parties as recognised or unrecognised political parties. A recognised political party is either a National party or a State party. Section 6A, 6B and 6C of the Election Symbols (Reservation and Allotment) Order, 1968 lays down the conditions of recognition. The recognition benchmark requires the party to poll at least 6% of total votes in the State in the previous elections and return a certain number of elected representatives to any Parliament or State Legislature in the last general elections.

        Airtime is distributed equitably on public television and radio networks on the basis of the past performance of a recognised political party, during elections to display or propagate any election matter or to address the public in connection with an election. Rule 85C of Conduct of Elections Rule 1961 lays down that airtime will be distributed on cable television network and other electronic media owned or controlled or financed wholly or substantially by funds provided to them by the Central Government proportionately from the maximum time available on such cable television network and other electronic media.

        Past performance of a recognised political party in relation to the election to fill seats in the House of the People, is calculated on the basis of the percentage of votes cast in the last preceding general election in favour of that recognised political party with reference to the total votes cast in that general election, to fill the seats in that House, and in relation to the election to fill seats in the Legislative Assembly of a State (except the State of Jammu and Kashmir), on the basis of the percentage of the votes cast in the last preceding general election in favour of that recognised political party with reference to the total votes cast in that general election, to fill the seats in that Assembly.

        The Election Commission of India issues Press Notes on the allocation of actual broadcast times and the eligible parties before each elections. For the General Elections 2014, the time allocations determined by the Election Commission of India by its order dated 14 March 2014 was as follows:

        1) On Doordarshan (DD) (Public Television) a. a total of not less than 10 hours of telecasting time on the National channel of the Doordarshan for telecasts by the National Parties. b. a total of not less than 15 hours of telecasting time on the Regional Doordarshan Kendras, for telecasts by the National Parties. c. a total of not less than 30 hours of telecasting time on the Regional Doordarshan Kendras for telecasts by the State Parties, and d. a total of 7 hours 50 minutes of telecasting time through the Regional Satellite Services channel available to viewers across the whole country.

        2) On All India Radio (AIR) (Public Radio) a. a total of not less than 10 hours of broadcasting time on the National hookup of the All India Radio for broadcasts by the National Parties. b. a total of not less than 15 hours of broadcasting time on the Regional AIR Stations, for broadcasts by the National Parties. c. a total of not less than 30 hours of broadcasting time on the Regional AIR Stations of the All India Radio, for broadcasts by the State Parties and d. a total of 7 hours 50 minutes of broadcasting time on the National hookup of All India Radio broadcasts by the State Parties.

        3) Allocation of Time to each party

        For National Parties: a. of the ten hours telecasting/broadcasting time reserved over the National channel/hookup of DD/ AIR for the National Parties, 45 (forty five) minutes shall be allotted to each of the 6 National parties, i.e. a total of four hours and thirty minutes (4-30 hrs), each on the DD & AIR separately; b. the remaining five hours and thirty minutes (5-30 hrs) telecasting/ broadcasting time shall be further divided among the six National parties, according to the percentage of votes polled by each such party, at the last general election to the House of People held in 2009. c. in addition, each National Party shall be allotted one and a half times of the total time allotted to it under sub-paras (a) and (b) above, for telecasts/ broadcasts on the Regional DD Kendras/ Regional AIR Stations; d. of the total time so allotted to each National Party under sub-para (c), each such party shall have the option to utilise the time so allotted on any of the Regional DD Kendra/ State Capital AIR Station.

        For State Parties: a. of the total time of thirty (30) hours reserved for telecasting/broadcasting by the State parties on the Regional DD Kendras/Regional AIR Stations, each of 47 State Parties shall be allotted thirty five (35) minutes, i.e. a total of twenty seven hours and twenty five (27-25 hrs), each on DD and AIR separately; b. the remaining two hours and 35 minutes (2-35 hrs) telecasting/broadcasting time for parties shall be further divided among the said 47 State Parties, according to the percentage of votes polled by each such party in the State(s) in which it is recognized, at the last general election to the House of the People held in 2009. c. in addition, each State Party shall be allotted 10 minutes telecasting/broadcasting time on Regional Satellite Services channel of DD available to viewers across the whole country and the National hookup of AIR.

        4) Time Vouchers For Parties

        Each party shall be given time vouchers of denomination of 5 minutes equal to the total time allotted to it for telecasts on DD and Broadcasts on AIR. That party shall have the discretion to choose any representatives and allow them to use those time vouchers, provided that no such individual representative shall be allowed to use more than 20 minutes of the total time allotted to that party, either on DD or on AIR.

        5) Date of Telecasts/Broadcasts a. The telecasts/broadcasts shall span between the last date of nominations for the first phase and two days prior to the last of the dates of poll any where in India in case of Parliamentary elections, and the relevant State or States where elections for the respective State Assemblies are also being held simultaneously. b. The days of the week and the time slots during which these telecasts/ broadcasts are to be made are decided by the Prasar Bharati Corporation (holding undertaking for DD and AIR) in consultation with the Election Commission. c. The actual date and time during which the telecasts/ broadcasts will be made by the authorized representatives of any party shall be predetermined, by lot, by the Prasar Bharati Corporation, in consultation with the Election Commission. d. While deciding about such dates and time, it shall be ensured that fairness and equity is maintained as far as possible and having due regard to the technical constraints in regard to the occasion and time for the telecasts/broadcasts by such parties.

        Political parties/ candidates/ any other persons can advertise (paid campaigns) on television and radio (including on public broadcasters) during the period of elections only subject to pre-certification of the content by the Election Commission.

        The relevant provisions of Section 39A of the Representation of the People Act 1951 reads as follows - "39A. Allocation of equitable sharing of time.— (1) Notwithstanding anything contained in any other law for the time being in force, the Election Commission shall, on the basis of the past performance of a recognised political party, during elections, allocate equitable sharing of time on the cable television network and other electronic media in such manner as may be prescribed to display or propagate any election matter or to address public in connection with an election. (2) The allocation of equitable sharing of time under sub-section (1), in respect of an election, shall be made after the publication of list of contesting candidates under section 38 for the election and shall be valid till forty-eight ours before the hour fixed for poll for such election. (3) The allocation of equitable sharing of time under sub-section (1) shall be binding on all political parties concerned. (4) The Election commission may, for the purpose of this section, make code of conduct for cable operators and electronic media and the cable operators and every person managing or responsible for the management of the electronic media shall abide by such code of conduct. **"

        The relevant provisions of Rule 85C of the Conduct of Elections Rules, 1961 - "85C. Allocation of equitable sharing of time on electronic media.— (1) The Election Commission shall, for the purposes of allocating equitable sharing of time on the cable television network and other electronic media under subsection (1) of section 39A, categories the cable television networks and electronic media into the two separate categories that is to say one category which is owned or controlled or financed wholly or substantially by funds provided to them by the Central Government and the other which is not owned or controlled or financed wholly or substantially by funds provided to them by the Central Government. (2) For allocating equitable sharing of time on the cable television network and other electronic media owned or controlled or financed wholly or substantially by funds provided to them by the Central Government referred to in subrule (1), the Election Commission shall determine, in consultation with the Ministry of the Government of India dealing with the concerned subject, the maximum time period available on such cable television network and other electronic media and allocate such time period proportionately among the recognised political parties contesting the election on the basis of their past performances for the purposes of displaying or propagating any election matter or to address public in connection with the election under sub-section (1) of section 39A. (3) For the purposes of this rule, “past performance of a recognised political party” shall be calculated,— (i) in relation to the election to fill a seat or seats in the House of the People, on the basis of the percentage of votes cast in the last preceding general election in favour of that recognised political party with reference to the total votes cast in that general election, to fill the seats in that House; (ii) in relation to the election to fill a seat or seats in the Legislative Assembly of a State (except the State of Jammu and Kashmir), on the basis of the percentage of the votes cast in the last preceding general election in favour of that recognised political party with reference to the total votes cast in that general election, to fill the seats in that Assembly."


        Peer Reviewer comment: Agree. It needs to be noted that the total time available to political parties on the state-owned media, particularly for regional parties, would appear to be very limited compared to the size and diversity of the electorate, which might require a whole menu of messages tailored to different segments and on different issues for a comprehensive putting across of the parties' messages.

        Scoring Criteria

        A YES score is earned where: 1) free or subsidized access to air time for electoral campaigns is granted in a transparent, equitable way, and 2) there are clearly defined eligibility criteria.

        A MODERATE score is earned where free or subsidized access to air time for electoral campaigns is granted in a transparent, equitable way, but eligibility criteria are not clearly defined.

        A NO score is earned where no such law exists.

        Sources
        1. (a) Representation of the People Act 1951, (b) Section 39A, (c) 1951 (d) http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Conduct of Elections Rules 1961, Rule 85C, 1961, http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        3. Election Commission of India, Press Note No. ECI/PN/14/2014/MEDIA, dated 14 March 2014 on allotment of broadcast/ telecast time for recognized political parties for the General Election 2014 [http://eci.nic.in/ecimain1/current/PN1414032014.pdf]

        4. Election Symbols (Reservation and Allotment) Order, 1968, Sections 6, 6A, 6B and 6C, 1968, http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/PoliticalParty&ElectionSymbolOrder2013Eng.pdf

        5. Advertisements of political nature on television and radio: Election Commission of India, No. 509/75/2004/JS-I, dated 15 April 2004, http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/AdvOrder.pdf

        6. Doordarshan's Code for Commercial Advertisements, http://www.ddindia.gov.in/Business/Commercial%20And%20Sales/Documents/code%20for%20commercial.pdf

        7. All India Radio's Commercial Code, http://allindiaradio.gov.in/Information/Commercial%20Code/Pages/default.aspx

        8. Certification of Political Advertisement for GE 2014, Election Commission of India Order dated 15 March 2014, http://eci.nic.in/ecimain1/current/15%20March28032014.pdf

        Reviewer's sources: 1. For time allocations for national and state parties, see: Election Commission of India, Press Note No. ECI/PN/14/2014/MEDIA, dated 14 March 2014 on allotment of broadcast/ telecast time for recognized political parties for the General Election 2014 [http://eci.nic.in/ecimain1/current/PN1414032014.pdf]

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        8
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        50
        In practice, to what extent is free or subsidized access to air time provided in a transparent, equitable way to political parties and individual candidates for electoral campaigns?More about indicator

        There is no access to airtime provided for candidates. Regarding airtime for parties, since airtime is distributed equitably on public broadcasting media on the basis of the past performance of a recognised political party, there is no scope for partisan or unfair treatment of political parties. The Election Commission of India issues Press Notes on the allocation of actual broadcast times and the eligible parties before each elections. The public broadcasters communicate the exact timings for each party / candidate, and there have been no complaints of the airtime provisions being provided against the prescribed mechanism. There have been no complaints because the formula and manner of allotment of time is transparent and equitable. However, there have been complaints of partisan coverage by the state media in favor of the ruling parties, but that relates to coverage outside the free air time allocation for parties for their election campaigns.

        Rajdeep Sardesai, journalist, said that in the course of their news coverage during the elections, they had not come across any complaints from any party on time allocations made by government television and radio. "The 2014 general elections saw air time on private television channels being monopolized by one party, the Bharatiya Janata Party (BJP), particularly on important voting days. It is a fact that during first week of march to the first week of may, private television spent 30% airtime covering Prime Ministerial candidate, Narendra Modi."

        A study by CMS of the news coverage of the 2014 elections also finds that the BJP dominated coverage of political parties getting over a third of the time and the party's Prime Ministerial candidate, Narendra Modi, received 33.21 per cent of the prime-time news telecast time.

        Due to poor performance in the general elections 2014, three of the six national parties - Bahujan Samaj Party, Communist Party of India and Nationalist Congress Party - are likely to lose their national party status. A national party needs to get at least 6 per cent of the votes from a minimum of four states, or 2 per cent of the total seats in the Lok Sabha from at least three states, or it should be a recognised as a state party in at least four states. As a result, these three parties will lose the free access to air time in future elections.


        Peer Reviewer comment: While allocation of airtime on the state-owned electronic media is transparent and fair in law and practice, the weight of the state-owned media has been shrinking over successive elections due to the rapid growth of a vast range of private TV channels, including news channels, in all Indian languages. This means that even though the allocations on state-owned media are fair, the role of the private media, accessed by payment, is increasing as a share of total coverage and viewership and this favours parties with deep pockets in both national and state-level contests. However, the issue of private media coverage is beyond the remit of the state in a free media environment. The state-owned media's allocated airtime is very small compared to private media coverage, which builds up long before the election is announced and cumulatively influences voter perceptions of parties and leaders.

        The BJP spent an estimated Rs. 50000 million on their campaign, a large part of which was for media coverage, and are said to have bought 2000 spots a day across Hindi, English and regional language TV channels during and before the campaign. See Himani Chandra Gurtoo, "BJP's Advertising Plan May Cost a Whopping Rs.5000 crore", Hindustan Times, 13 April 2014.

        For the impact of media exposure, particularly private media exposure, on the elections, see Rahul Verma and Shreyas Sardesai, "Does Media Exposure Affect Voting Behaviour and Political Preferences in India?", Economic and Political Weekly, Vol. 49, No. 39, September 27, 2014: 82-88.

        Scoring Criteria

        A 100 score is earned where: 1) free or subsidized access to media advertising is always provided in a transparent and equitable way, and 2) the defined eligibility criteria are applied consistently.

        A 50 score is earned where: 1) free or subsidized access to media advertising is usually provided in a transparent and equitable way, but exceptions exist, or 2) the eligibility criteria are not always applied.

        A 0 score is earned where: 1) there's rarely free or subsidized access to air time for political campaign, and 2) access exists but is not provided in a transparent, equitable way.

        Sources
        1. ECI Press Note No. ECI/PN/14/2014/MEDIA, dated 14 March 2014 on allotment of broadcast/ telecast time for recognized political parties for the General Election 2014 http://eci.nic.in/ecimain1/current/PN1414032014.pdf

        2. Interview with Rajdeep Sardesai, Journalist [http://en.wikipedia.org/wiki/Rajdeep_Sardesai], Date of Interview: 9 August 2014.

        3. "Election Commission's sword looms over NCP, BSP & CPI", India Today, 2 July 2014 http://indiatoday.intoday.in/story/election-commissions-sword-looms-over-ncp-bsp-&-cpi/1/369446.html

        4. "Modi got most prime-time coverage: study", S. Rukmini, The Hindu, 8 May 2014 http://www.thehindu.com/elections/loksabha2014/modi-got-most-primetime-coverage-study/article5986740.ece

        Reviewer's sources: 1. The BJP spent an estimated Rs. 50000 million on their campaign, a large part of which was for media coverage, and are said to have bought 2000 spots a day across Hindi, English and regional language TV channels during and before the campaign. See Himani Chandra Gurtoo, "BJP's Advertising Plan May Cost a Whopping Rs.5000 crore", Hindustan Times, 13 April 2014.

        1. For the impact of media exposure, particularly private media exposure, on the elections, see Rahul Verma and Shreyas Sardesai, "Does Media Exposure Affect Voting Behaviour and Political Preferences in India?", Economic and Political Weekly, Vol. 49, No. 39, September 27, 2014: 82-88.
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    Contribution and Expenditure Restrictions

    More about category
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    38
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      General Rules on Electoral Campaign Contributions
      More about category
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        9
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        NO
        In law, cash contributions are banned.More about indicator
        1. There are no laws prohibiting cash contributions to political parties and individual candidates. Section 29B of the RP Act permits political parties to accept any amount of contribution voluntarily offered to it by any person or company other than a government company. But no political party or candidate can accept any contribution from any foreign source.

        The relevant provision reads as follows:

        "29B. Political parties entitled to accept contribution. —Subject to the provisions of the Companies Act, 1956 (1 of 1956), every political party may accept any amount of contribution voluntarily offered to it by any person or company other than a Government company:

        Provided that no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976).

        **"

        1. Section 40(A)(3) of the Income Tax Act 1961 requires that any payment exceeding Rs. 20000 ($333) made by a business entity should be made by check/ demand draft. The relevant provisions states -

        "(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure."

        1. Section 80GGB and 80GGC of Income Tax Act 1961 also state that no deduction shail be allowed on the contributions made in cash by any person or company to a political party.

        2. Political parties are required to give receipts for all contributions received by them which are over Rs. 1000 ($ 16).

        3. Election Commission of India has recently issued guidelines on transparency and accountability in party funds and election expenditure reiterating the legal requirements of contributions received by political parties. The guidelines state that political parties shall maintain name and address of all such individuals, companies or entities making donation to it, excepting petty sums donated by the public only during its public rallies. Further, any amount/ donation received in cash, shall be accounted in relevant account books and deposited in the party's bank account within a week of its receipt. However, the party can retain a reasonable amount required for day to day functioning of the party and for defraying the cash expenses.

        Scoring Criteria

        A YES score is earned where cash contributions are banned and all financial contributions must be made via the banking system.

        A MODERATE score is earned where cash contributions are allowed up to a maximum limit, regardless of the limit.

        A NO score is earned where no such law exists.

        Sources
        1. Representation of the People Act, 1951, Section 29B, 1951; http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

        3. Income Tax Act 1961, Section 40(A)(3), 1961, http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/DTL2013/section40a.htm

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        NO
        In law, there is a ban on anonymous contributions.More about indicator
        1. Section 29C of the Representation of the People Act, 1951 mandates political parties to report every year - (a) Donations received by the political party from any person in that financial year in excess of Rs. 20,000 ($ 333); (b) Donations received by the political party in excess of Rs. 20,000 ($ 333) from companies other than government companies in that financial year.

        The provision limits anonymous donations to Rs. 20000 ($ 333) and regulates contributions of political parties every year, rather than only during election period, which occurs every five years. Section 29C reads as follows:

        "29C. Declaration of donation received by the political parties.—(1) The treasurer of a political party or any other person authorised by the political party in this behalf shall, in each financial year, prepare a report in respect of the following, namely: — (a) the contribution in excess of twenty thousand rupees received by such political party from any person in that financial year; (b) the contribution in excess of twenty thousand rupees received by such political party from companies other than Government companies in that financial year.

        **"

        1. The Reserve Bank of India regulations require banks to ensure that any remittance of funds by way of demand draft, mail/telegraphic transfer or any other mode and issue of travellers’ cheques, for value of Rs. 50000/- ($833) and above is effected by debit to the customer’s account or against cheques and not against cash payment.

        2. Political parties are required to give receipts for all contributions received by them which are over Rs. 1000 ($ 16).

        3. Election Commission of India has recently issued guidelines on transparency and accountability in party funds and election expenditure reiterating the legal requirements of contributions received by political parties. The guidelines state that political parties shall maintain name and address of all such individuals, companies or entities making donation to it, excepting petty sums donated by the public only during its public rallies. Further, any amount/ donation received in cash, shall be accounted in relevant account books and deposited in the party's bank account within a week of its receipt. However, the party can retain a reasonable amount required for day to day functioning of the party and for defraying the cash expenses.


        Peer Reviewer comment: Disagre and recommend a score of 50. With the issue of new transparency guidelines of Aug. 29, 2014, effective Oct. 1, 2014, parties have to identify all donors (by name and address) not limited by the Rs. 20,000 floor, so the position on anonymous donations has changed at the time of writing. However, this guideline remains a guideline rather than have the full force of law because other than de-recognition of the symbol of the party the ECI has no power to fine or deregister a party violating the guideline. Such an all-or-nothing power makes it difficult, as has been the case so far, to enforce election expenditure rules issued by the ECI under Art. 324. Thus, it is anticipated that this will in practice not be complied with and will only drive fund-raising and expenditure further underground.

        Scoring Criteria

        A YES score is earned where the law stipulates that anonymous contributions are banned.

        A MODERATE score is earned where the ban exists, but it applies only to one actor (whether political parties or individual candidates). A MODERATE score is also earned where small anonymous donations are allowed up to a maximum threshold equal to or less than the equivalent to US$300.

        A NO score is earned where no such law exists.

        Sources
        1. Representation of the People Act, 1951, Section 29C, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Reserve Bank of India, Master Circular – Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT) /Obligation of banks under PMLA, 2002, No. RBI/2013-14/94?DBOD.AML.BC.No.24/14.01.001/2013-14, 1 July 2013; http://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=8179

        3. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

        Reviewer's sources: 1. Interview, senior ECI official who requested anonymity, 5 Nov. 2014

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        YES
        In law, in-kind donations to political parties and individual candidates must be reported.More about indicator

        Political parties have to report cash contributions to the Election Commission of India and file audited accounts to the Income Tax authorities every year. Contributions made by companies are defined in the Companies Act 2013 and such contributions received from companies also include expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, for a political purpose. During election period, candidates have to maintain expenditure accounts and also report funds received and expenditure incurred on the candidate by his political party or any other association/ organization/body or by any other individual.

        Section 29C of the Representation of the People Act, 1951 mandates political parties to report every year - (a) Donations received by the political party from any person in that financial year in excess of Rs. 20,000 ($ 333); (b) Donations received by the political party in excess of Rs. 20,000 ($ 333) from companies other than government companies in that financial year.

        The party treasurer has to submit a copy of the report in a prescribed form to the Election Commission of India before the date of submission of the audited accounts of the party to Income Tax authorities. Noncompliance with the statutory requirement will disentitle the party from any tax relief under the Income Tax Act, 1961.

        Section 29C reads as follows: "29C. Declaration of donation received by the political parties.—(1) The treasurer of a political party or any other person authorised by the political party in this behalf shall, in each financial year, prepare a report in respect of the following, namely: — (a) the contribution in excess of twenty thousand rupees received by such political party from any person in that financial year; (b) the contribution in excess of twenty thousand rupees received by such political party from companies other than Government companies in that financial year.

        (2) The report under sub-section (1) shall be in such form as may be prescribed.

        (3) The report for a financial year under sub-section (1) shall be submitted by the treasurer of a political party or any other person authorised by the political party in this behalf before the due date for furnishing a return of its income of that financial year under section 139 of the Income-tax Act, 1961 (43 of 1961), to the Election Commission.

        (4) Where the treasurer of any political party or any other person authorised by the political party in this behalf fails to submit a report under sub-section (3) then, notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), such political party shall not be entitled to any tax relief under that Act."

        Section 29B of the Representation of the People Act, 1951 states that “contribution” has the meaning assigned to it under section 293A Companies Act 1956 (New legislation is Section 182 of the Companies Act 2013). Section 182 provides that the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall be deemed to be a contribution for a political purpose - (i) where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and (ii) where such publication is not by or on behalf of, but for the advantage of a political party, be a contribution for a political purpose.

        During elections, under Sections 77 and 78 of the Representation of the People Act, 1951, candidates are required to keep, either by himself or by his election agent, a separate and correct account of all expenditure in connection with the election incurred or authorized by him or by his election agent between the date on which he has been nominated and the date of declaration of result of the election, both dates inclusive. Every contesting candidate has also to lodge a true copy of the said account within 30 days from the date of declaration of result of the election, with the District Election Officer. Along with the details of expenditure, the candidate should also report the following aspects of contributions received by him for the campaign:

        i) Any lump-sum grant received from a political party, any other association / body, any individual by the candidate;

        ii) Details of all expenditure incurred on public meetings, processions, campaign materials, like, handbills, posters, video and audio cassettes, loudspeakers etc., campaign through electronic / print media (including cable network), vehicles used and expenditure on such vehicles, erection of gates, arches, cutouts, banners, etc., visits of ‘leaders’ to the constituency (other than the expenditure on the travel of ‘Leaders’ of the party defined in Explanation 2 under Section 77(1) for propagating programme of the party), visit of other party functionaries and other misc. expenses, which may have been supplied to candidate or spent on the candidate by his political party or any other association/ organization/body or by any other individual.

        Parties are required to report in-kind donations as part of the statement of election expenses mandated to be filed within 90 days of completion of election process. Please see para 5.2. iii. of Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties which states as follows: "(iii) ln kind (Received complimentary goods or services from any person/entity) (Please mention details and notional value of such item- goods or services such helicopter services etc. received as complimentary from any person /entity)".


        Peer Reviewer comment: Disagree and recommend a 50. The loophole for in-kind donations not to get reported is that while there are stringent reporting requirements on the candidate to report all expenditures, direct and indirect, for his campaign, if political parties avail of third-party in-kind financial support of their campaign purely for propagating the party platform without campaigning for a candidate, eg., by way of travel costs, staff support, etc., this can escape reporting if not an advertisement or publication.

        Scoring Criteria

        A YES score is earned where all in-kind donations must be reported to the oversight authority.

        A MODERATE score is also earned if the requirement to report such information exists, but applies only to one actor (whether political parties or individual candidates).

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Section 29C, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. The Representation of the People Act, 1951, Section 29B, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        3. Companies Act 2013, Section 182, 2013, http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf

        4. The Representation of the People Act, 1951, Sections 77 and 78, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        5. Election Commission of India, Candidate Handbook 2014, APPENDIX-XXXI-A - REGISTER FOR MAINTENANCE OF DAY TO DAY ACCOUNTS OF ELECTION EXPENDITURE BY CONTESTING CANDIDATES; pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        6. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS 21012013.pdf

        Reviewer's sources: 1. Interview with a senior ECI official, Nov. 5, 2014, on condition of anonymity.

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        12
        Score
        MODERATE
        In law, loans to political parties and individual candidates must be reported.More about indicator

        Under an order issued by the Election Commission of India pursuant to directions from the Supreme Court of India, at the time of filing nominations for elections, candidates have to submit liabilities information on affidavit regarding outstanding loans from banks, financial institutions, government dues dealing with government accommodation, supply of water, electricity, telephones, government transport (including aircrafts and helicopters) and any other dues. Along with the details of campaing expenditure that a candidate has to submit on the conclusion of an election, he/she should also report contributions received by him/ her for the campaign in the form of lump-sum grants received from a political party, any other association / body, any individual by the candidate. Whether such grants include loans received during the campaign period is a gray area.

        Political parties are required to submit audited statement of account to Income Tax authorities annually to maintain their tax exempt status under Section 13A of the Income Tax Act 1961 which would include disclosures on assets and liabilities. In the recently issued guidelines on transparency and accountability in party funds and election expenditure, the Election Commission of India has informed political parties that it is required that (a) the treasurer of the political party or such person as authorized by the party, besides ensuring maintenance of the accounts at all State and lower levels, shall maintain consolidated accounts at the central party Head Quarters as required under the aforesaid provision, (b) the accounts so maintained by him/her shall conform to the guidance note on Accounting and Auditing of political parties, issued by the Institute of chartered Accountants of India (ICAI), and (c) the Annual Accounts shall be audited and certified by the qualified practicing chartered Accountants.

        Scoring Criteria

        A YES score is earned where all loans must be reported to the oversight authority.

        A MODERATE score is earned where loans must be reported, but the requirement applies only to one actor (whether political parties or individual candidates).

        A NO score is earned where no such law exists.

        Sources
        1. Election Commission of India, Candidate Handbook 2014, Order No.3/ER/2003/JS-II, dated 27 March 2003 & AFFIDAVIT TO BE FURNISHED BY CANDIDATE ALONG WITH NOMINATION PAPER, pp. 252-259, http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        2. Income Tax Act 1961, Section 13A, 1961, http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/DTL2013/section13a.htm

        3. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

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      Limits on Contributions and Expenditures during Electoral Campaign Periods
      More about category
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        13
        Score
        NO
        In law, contributions from individuals are limited to a maximum amount.More about indicator

        There is no law that limits or regulates contributions made to a candidate for election. However, there are expenditure caps on candidates.

        Section 29B of the Representation of People Act regulates contributions to political parties, and defines no limit to the amount an individual may donate to parties.

        29B: "Political parties entitled to accept contribution.—Subject to the provisions of the Companies Act, 1956 (1 of 1956), every political party may accept any amount of contribution voluntarily offered to it by any person or company other than a Government company: Provided that no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976)."

        Scoring Criteria

        A YES score is earned where: 1) individuals may not contribute more than a maximum amount established by the law.

        A MODERATE score is earned where a maximum amount exists, but it applies only to contributions for one actor (whether political parties or individual candidates). A MODERATE score is also earned where individuals are forbidden from making any contribution.

        A NO score is earned where no such law exists.

        Sources

        The Representation of the People Act, 1951, Section 29B, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

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        14
        Score
        MODERATE
        In law, contributions from corporations are limited to a maximum amount.More about indicator
        1. Section 29B of the Representation of the People Act permits a political party to accept any amount of contribution voluntarily offered to it by any person or company other than a government company. But no political party can accept any contribution from any foreign source.

        The relevant provision states as follows:

        "29B. Political parties entitled to accept contribution. —Subject to the provisions of the Companies Act, 1956 (1 of 1956), every political party may accept any amount of contribution voluntarily offered to it by any person or company other than a Government company:

        Provided that no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976)."

        1. Under Section 182 of the Companies Act 2013, the aggregate of the amount which may be contributed by the company to any political party in any financial year shall not exceed 7.5 per cent of its average net profits during the three immediately preceding financial years. A company which has been in existence for less than three financial years cannot contribute any amount directly or indirectly to any political party. Any advertisements paid for by a company in any publication of or on behalf of a political party is a contribution of a political nature. The relevant provision is quoted below:

        "182. (1) Notwithstanding anything contained in any other provision of this Act, a company, other than a Government company and a company which has been in existence for less than three financial years, may contribute any amount directly or indirectly to any political party:

        Provided that the amount referred to in sub-section (1) or, as the case may be, the aggregate of the amount which may be so contributed by the company in any financial year shall not exceed seven and a half per cent. of its average net profits during the three immediately preceding financial years:


        (b) the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall also be deemed,—

        (i) where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and (ii) where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose.

        **"

        1. Through Section 13B and Sections 80GGB and 80GGC of the Income Tax Act 1961 read with Rule 17CA of Income Tax Rules, 1962, government has encouraged private companies to set up Electoral Trusts where voluntary contributions received by the Trusts registered with the government will not be included in its total income if the Trust distributes at least 95% of its aggregate income to any political party. The scheme allows for 100% tax deduction for contributors to the Trust.

        The relevant provisions of the Income Tax Act 1961 and Rules 1962 read as follows:

        "Special provisions relating to voluntary contributions received by electoral trust. 13B. Any voluntary contributions received by an electoral trust shall not be included in the total income of the previous year of such electoral trust, if— (a) such electoral trust distributes to any political party, registered under section 29A of the Representation of the People Act, 1951 (43 of 1951), during the said previous year, ninety-five per cent of the aggregate donations received by it during the said previous year along with the surplus, if any, brought forward from any earlier previous year; and (b) such electoral trust functions in accordance with the rules1a made by the Central Government."

        "Deduction in respect of contributions given by companies to political parties. 80GGB. In computing the total income of an assessee, being an Indian company, there shall be deducted any sum contributed by it, in the previous year to any political party or an electoral trust. Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash. **"

        "Deduction in respect of contributions given by any person to political parties. 80GGC. In computing the total income of an assessee, being any person, except local authority and every artificial juridical person wholly or partly funded by the Government, there shall be deducted any amount of contribution made by him, in the previous year, to a political party or an electoral trust. Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash. **"

        "Functions of electoral trusts. 17CA. ** (2) The electoral trust may receive voluntary contributions from — (a) an individual who is a citizen of India; (b) a company which is registered in India; and (c) a firm or Hindu undivided family or an Association of persons or a body of individuals, resident in India.


        (4) The electoral trust shall not accept contributions— (a) from an individual who is not a citizen of India or from any foreign entity whether incorporated or not; and (b) from any other electoral trust which has been registered as a company under section 25 of the Companies Act, 1956 (1 of 1956) and approved as an electoral trust under the Electoral Trusts Scheme, 2013.


        (7) A political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951) shall be an eligible political party and an electoral trust shall distribute funds only to the eligible political parties. (8) (i) The electoral trust may, for the purposes of managing its affairs, spend up to five per cent of the total contributions received in a year subject to an aggregate limit of rupees five hundred thousand in the first year of incorporation and rupees three hundred thousand in subsequent years; (ii) the total contributions received in any financial year along with the surplus from any earlier financial year, if any, as reduced by the amount spent on managing its affairs, shall be the distributable contributions for the financial year; (iii) an electoral trust shall be required to distribute the distributable contributions received in a financial year, referred to in item (ii), to the eligible political parties before the 31st day of March of the said financial year, subject to the condition that at least ninety five per cent of the total contributions received during the financial year along with the surplus brought forward from earlier financial year, if any, are distributed. (9) The trust shall obtain a receipt from the eligible political party indicating the name of the political party, its permanent account number, registration number, amount of fund received from the trust, date of the receipt and name and designation of person signing such receipt.


        1. There are no laws which govern contributions by corporations to individual candidates. Further, there are no laws which limit contributions that can be received by individual candidates.

        Peer Reviewer comment: Agree. Maximum amount is misleading and inaccurate if understood to be a fixed sum but there is an implied maximum deriving from the 7.5% upper limit applied to average net profit over the past three financial years under Section 182 of the Companies Act, 2013.

        Scoring Criteria

        A YES score is earned where: 1) corporations may not contribute more than a maximum amount established by the law.

        A MODERATE score is earned where a maximum amount or ban exists, but it applies only to contributions for one actor (whether political parties or individual candidates). A MODERATE score is also earned where corporations are forbidden from making any contribution.

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Section 29B, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Companies Act 2013, Section 182, 2013, http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf

        3. Income Tax Act 1961, Section 13B and Sections 80GGB and 80GGC, 1961, read with Income Tax Rules, 1962, Rule 17CA, 1962 http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/DTL2013/section13b.htm http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/DTL2013/section80ggb.htm http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/DTL2013/section80ggc.htm http://www.incometaxindiapr.gov.in/incometaxindiacr/contents/ITRules2010/rules017ca.htm

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        15
        Score
        YES
        In law, contributions from foreign sources are banned.More about indicator

        Political parties and individual candidates are prohibited from receiving any contribution from a foreign source.

        Section 29B of the RP Act permits political party to accept any amount of contribution voluntarily offered to it by any person or company other than a government company. But no political party can accept any contribution from any foreign source. The relevant provision is quoted below:

        "29B. Political parties entitled to accept contribution. —Subject to the provisions of the Companies Act, 1956 (1 of 1956), every political party may accept any amount of contribution voluntarily offered to it by any person or company other than a Government company:

        Provided that no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976)."

        A foreign source has been defined under section 2(j) of the Foreign Contribution (Regulation) Act 2010 as follows:

        "Section 2(j) - "foreign source" includes,-- i. the Government of any foreign country or territory and any agency of such Government; ii. any international agency, not being the United Nations or any of its specialised agencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification, specify in this behalf; iii. a foreign company; iv. a corporation, not being a foreign company, incorporated in a foreign country or territory; v. a multi-national corporation referred to in sub-clause (iv) of clause (g); vi. a company within the meaning of the Companies Act, 1956, and more than one-half of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely:-- A. the Government of a foreign country or territory; B. the citizens of a foreign country or territory; C. corporations incorporated in a foreign country or territory; D. trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory; E. foreign company; vii. a trade union in any foreign country or territory, whether or not registered in such foreign country or territory; viii. a foreign trust or a foreign foundation, by whatever name called, or such trust or foundation mainly financed by a foreign country or territory; ix. a society, club or other association of individuals formed or registered outside India; x. a citizen of a foreign country."

        Section 3 of the Foreign Contribution (Regulation) Act, 2010 prohibits candidates for election and political parties and its office bearers from accepting foreign contribution. Section 3 reads as follows:

        "Section 3. Prohibition to accept foreign contribution –

        1. No foreign contribution shall be accepted by any -- a. candidate for election;

        d. member of any Legislature; e. political party or office-bearer thereof; f. organisation of a political nature as may be specified under sub-section (1) of section 5 by the Central Government; *"

        1. a. No person, resident in India, and no citizen of India resident outside India, shall accept any foreign contribution, or acquire or agree to acquire any currency from a foreign source, on behalf of any political party, or any person referred to in sub-section (1), or both. b. No person, resident in India, shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source, to any person if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to any political party or any person referred to in sub-section (1), or both. c. No citizen of India resident outside India shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source, to-- i. any political party or any person referred to in sub-section (1), or both; or ii. any other person, if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to a political party or to any person referred to in sub-section (1), or both. *"

        "Foreign contribution" has been defined in Section 2(h) of the Foreign Contribution (Regulation) Act, 2010 as follows: Section 2(h) "foreign contribution" means the donation, delivery or transfer made by any foreign source,-- i. of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift, is not more than such sum as may be specified from time to time, by the Central Government by the rules made by it in this behalf; ii. of any currency, whether Indian or foreign; iii. of any security as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of section 2 of` the Foreign Exchange Management Act, 1999. **"


        Peer Reviewer comment: Agree. It is important to emphasise here that foreign sources do not include Indian citizens resident abroad; hence, transborder transfers into India from Indians abroad would not be considered a foreign source although they would be coming in from outside the country's borders. In 2013, the Aam Aadmi Party received such contributions from abroad legally. In a context, when Indian citizens hold considerable sums of money outside the country, the ban on foreign sources would still allow considerable transborder inflows, legally, to parties and candidates.

        Scoring Criteria

        A YES score is earned where it is forbidden for political parties and individual candidates to receive contributions (financial or in-kind) from foreign sources.

        A MODERATE score is earned where: 1) the ban exists but it applies only to one actor (whether political parties or individual candidates), or 2) contributions from foreign sources are allowed to a maximum amount.

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Section 29B, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Foreign Contribution Regulation Act 2010, Section 2 (h) & (j) and Section 3, 2010 http://mha1.nic.in/fcra/intro/FC-RegulationAct-2010-C.pdf

        Reviewer's source: 1. See Aam Aadmi Party website for donations from 45 countries since Nov. 1, 2013 (http://www.aamaadmiparty.org/donation-list) accessed on Dec. 16, 2014.

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        16
        Score
        NO
        In law, contributions from third-party actors (unions, foundations, think tanks, political action committees, etc.) are limited to a maximum amount or banned.More about indicator

        There are no laws separately governing contributions by third party actors. Section 29B of the Representation of People Act, 1951 permits political parties to accept any amount of contribution voluntarily offered to it by any person or company other than a government company. But no political party or candidate can accept any contribution from any foreign source. If the third party actors are legally organized as a company as defined under the Companies Act 2013, then the restrictions pertaining to contributions by companies would apply.

        Section 29B of the Representation of People Act, 1951 reads as follows:

        "29B. Political parties entitled to accept contribution. —Subject to the provisions of the Companies Act, 1956 (1 of 1956), every political party may accept any amount of contribution voluntarily offered to it by any person or company other than a Government company:

        Provided that no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976).

        Explanation.— For the purposes of this section and section 29C,—

        (a) “company” means a company as defined in section 3; (b) “Government company” means a company within the meaning of section 617; and (c) “contribution” has the meaning assigned to it under section 293A, of the Companies Act, 1956 (1 of 1956) and includes any donation or subscription offered by any person to a political party; and (d) “person” has the meaning assigned to it under clause (31 ) of section 2 of the Income-tax Act, 1961 (43 of 1961), but does not include Government company, local authority and every artificial juridical person wholly or partially funded by the Government."

        Under Section 182 of the Companies Act 2013, the aggregate of the amount which may be contributed by the company to any political party in any financial year shall not exceed 7.5 per cent of its average net profits during the three immediately preceding financial years. The relevant provision is quoted below:

        "182. (1) Notwithstanding anything contained in any other provision of this Act, a company, other than a Government company and a company which has been in existence for less than three financial years, may contribute any amount directly or indirectly to any political party:

        Provided that the amount referred to in sub-section (1) or, as the case may be, the aggregate of the amount which may be so contributed by the company in any financial year shall not exceed seven and a half per cent. of its average net profits during the three immediately preceding financial years: **"


        Peer Reviewer comment: Unlike in, say, the US, contributions to parties or candidates from third-party actors such as foundations or labour unions are minor and rare, the principal third-party donor other than corporations or individuals would be labour unions. There is no separate law governing their contributions and hence there is no upper limit. Most major parties have affiliated trade unions.

        Scoring Criteria

        A YES score is earned where: 1) third-party actors may not contribute more than a maximum amount established by the law, or 2) are forbidden from making any contribution.

        A MODERATE score is earned where: 1) the maximum amount or ban exists only for the majority of third-party actors, but not all, or 2) the maximum amount or ban exists, but applies only to contributions for either political parties or individual candidates.

        A NO score is earned where no such law exists.

        Sources
        1. Representation of the People Act, 1951, Section 29B, 1951; http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Companies Act 2013, Section 182, 2013, http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf

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        17
        Score
        MODERATE
        In law, election campaign spending by political parties and individual candidates is limited to a maximum amount.More about indicator

        If parties spend campaigning for the candidate, the amounts will have to be accounted for within the candidate's expenditure limit and must be reported by the candidate and the parties separately (reporting norms for candidates and parties during elections mentioned in other indicators). If the expenditure is incurred by designated leaders of a political party for campaigning on behalf of the party generally, this is not subject to expenditure limits.

        1. Section 77 of the Representation of People Act of 1951 read with Rule 90 of the Conduct of Election Rules of 1961, prescribes the maximum expenditure that can be incurred by a candidate for his / her election campaign and this expenditure has to be accounted for as per procedure. The expenses incurred by the political party on behalf of the candidate is included in the expenditure cap. Expenditure incurred by leaders of a political party on campaigning for the party (up to 40 leaders for a recognized party and 20 leaders for an unrecognized party) in travel is not deemed to be expenditure incurred by the candidate.

        2. The Table to Rule 90 specifying campaign expenditure limits are revised by the government from time to time. The last revision took place by government notification dated 28 February 2014. For Parliamentary constituencies (for elections to the national Parliament) in large States, the expenditure caps is fixed at Rs. 7000000 ($116375) and for small States, the expenditure cap is Rs. 5400000 ($ 89775). In case of Assembly constituencies (for elections to the State assemblies), the expenditure limits for large States is Rs. 2800000 ($ 46550) and small States is Rs. 2000000 ($ 33250).

        3. Section 77 of the Representation of People Act of 1951 reads as follows:

        “77. Every candidate at an election shall, either by himself or by his election agent, keep a separate and correct account of all expenditure in connection with the election incurred or authorized by him or by his election agent between the date on which he has been nominated and the date of declaration of the result thereof, both dates inclusive.

        Explanation 1.— For the removal of doubts, it is hereby declared that—

        (a) the expenditure incurred by leaders of a political party on account of travel by air or by any other means of transport for propagating programme of the political party shall not be deemed to be the expenditure in connection with the election incurred or authorised by a candidate of that political party or his election agent for the purposes of this sub-section.

        (b) any expenditure incurred in respect of any arrangements made, facilities provided or any other act or thing done by any person in the service of the Government and belonging to any of the classes mentioned in clause (7) of section 123 in the discharge or purported discharge of his official duty as mentioned in the proviso to that clause shall not be deemed to be expenditure in connection with the election incurred or authorised by a candidate or by his election agent for the purposes of this sub-section.

        Explanation 2.— For the purposes of clause (a) of Explanation 1, the expression “leaders of a political party”, in respect of any election, means,—

        (i) where such political party is a recognised political party, such persons not exceeding forty in number, and

        (ii) where such political party is other than a recognised political party, such persons not exceeding twenty in number,

        whose names have been communicated to the Election Commission and the Chief Electoral Officers of the States by the political party to be leaders for the purposes of such election, within a period of seven days from the date of the notification for such election published in the Gazette of India or Official Gazette of the State, as the case may be, under this Act:


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

        1. Rule 90 of the Conduct of Election Rules of 1961 states -

        "90. Maximum election expenses.- The total of the expenditure of which account is to be kept under section 77 and which is incurred or authorized in connection with an election in a State or Union territory mentioned in column 1 of the Table below shall not exceed-

        (a) in any one parliamentary constituency of that State or Union territory, the amount specified in the corresponding column 2 of the said Table; and

        (b) in any one assembly constituency, if any, of the State or Union territory, the amount specified in the corresponding column 3 of the said Table-

        **"


        Peer Reviewer comment: Agree. Although candidates expenditures are legally capped, in law due to Explanations 1 and 2 to Sec. 77, political party expenditures are not capped due to the loophole of "propagating the party programme" rather than campaigning for the candidate. Althoug the 2003 amendments of the RPA modified the earlier Explanation 1 introduced in 1975 which exempted party expenditures from the candidate ceiling, it left enough of a loophole for there to be no effective cap on party expenditures. In practice (interview with a senior ECI official, Nov. 5, 2014) parties have claimed that they were only propagating the party programme, which is taken to be not countable for the cap, even in instances when the party leader delivers a speech with the candidate standing beside him, in at least one unspecified instance!

        Scoring Criteria

        A YES score is earned where it is forbidden for political parties and individual candidates to spend more than a certain amount in a political campaign.

        A MODERATE score is earned where the maximum amount exists, but it applies only to one actor (whether political parties or individual candidates).

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of People Act 1951, Section 77, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf;

        2. Conduct of Election Rules 1961, Rule 90, 1961 http://lawmin.nic.in/ld/subord/cer1.htm

        3. Ministry of Law & Justice notification dated 28 February 2014 circulated by Election Commission of India, letter no. 3/1/3014/SDR/Vol-III, dated 5 March 2014, http://eci.nic.in/ecimain1/current/ImpIns106032014.pdf

        Reviewer's sources: 1. Interview with a senior ECI official who requested anonymity, Nov. 5, 2014.

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        Open Question: Do the national laws regulating political finance also apply to sub-national units? If not, to what extent do sub-national units have laws regulating political finance?More about indicator

        The powers to legislate on all matters concerning elections, including political finance regulations at the level of the national Parliament and State Legislatures, vests with the national Parliament. Therefore, the same political finance regulations are applicable at the national and sub-national levels.

        India follows a federal system of government. At the national level, is the Parliament of India comprising of the President and the two Houses - Lok Sabha (House of the People) and Rajya Sabha (Council of States) (Articles 79-81 of the Constitution of India). At the State level, are the State Legislatures which may be unicameral or bi-cameral (Articles 168 to 171).

        Part XV of the Constitution of India deals with Elections. Article 324 of the Constitution of India provides for the superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament and to the Legislature of every State and of elections to the offices of President and Vice-President held under this Constitution to vest in the Election Commission of India (ECI).

        Article 327 provides that Parliament may make laws on all matters relating to, or in connection with, elections to either House of Parliament or to the House or either House of the Legislature of a State including the preparation of electoral rolls, the delimitation of constituencies and all other matters necessary for securing the due constitution of such House or Houses.

        The Parliament has enacted the Representation of People Act, 1950 (deals with electoral rolls), Representation of People Act, 1951 (deals with conduct of elections), and the Conduct of Elections Rules, 1961, Registration of Elector Rules, 1960, for regulating elections to the Parliament and State Legislatures.

        Under its plenary powers pursuant to Article 324 of the Constitution of India, the ECI has enacted Election Symbols (Reservation and Allotment) Order 1968, and issues instructions and guidelines to conduct free and fair elections. There are several other laws, not directly related to conduct of elections, like the Delimitation Act 2002, the Prohibition of Simultaneous Membership Rules, 1950, the Scheduled Castes and Scheduled Tribes Orders under the Constitution (for reserving seats for such communities), the Parliament (Prevention of Disqualification) Act, 1959 and similar Acts of the State Legislatures relating to Removal of Disqualifications.

        In addition to election laws, the Companies Act 2013, Foreign Contribution Regulation Act 2010, Income Tax Act 1961 and the Indian Penal Code 1860, also have provisions that affect conduct of elections.

        The above legal position does not include elections to local bodies which are partly regulated by State Governments though under overarching Constitutional provisions.


        Peer Reviewer Comment: Agree The Current Research is correct that national laws apply to state assembly elections but that State governments partly regulate the conduct of local body elections. The only important difference in political finance between parliamentary and state assembly elections is that the candidate expenditure ceilings, revised upwards from time to time, are lower for state assembly elections. Also that the scale of expenditure is lower for state assemblies compared to parliamentary elections.

        Scoring Criteria

        Please describe the applicability of national political finance regulations at the sub-national level, being sure to answer: 1) whether national laws are applicable to sub-national campaigns; 2) if not, to what extent do sub-national units have similar laws regulating political finance; and 3) whether there are any reports of problems arising from gaps in this framework.

        Sources
        1. Constitution of India, Part V, Part VI, Part XV http://lawmin.nic.in/coi/coiason29july08.pdf

        2. The Representation of the People Act 1950 http://lawmin.nic.in/legislative/election/volume%201/REPRESENTATION%20OF%20THE%20PEOPLE%20ACT,%201950.pdf

        3. The Representation of the People Act 1951 [http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf]

        4. Conduct of Elections Rules 1961 http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        5. Election Symbols (Reservation and Allotment) Order, 1968 http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/PoliticalParty&ElectionSymbolOrder2013Eng.pdf

        Reviewer's sources: 1. For the latest revision in the upper limit for election spending for the Lok Sabha and State Assembly elections, see Election Commission of India, "Notification re Conduct of Election (Amendment) Rules, 2014 - Amendment of Rule 90 of Conduct of Elections Rules, 1961 - Increase in maximum limit of elections expenses - regarding". (http://eci.nic.in/ecimain1/current/ImpIns106032014.pdf)

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        Open Question: What are the predominant sources of funding for electoral campaigns?More about indicator
        1. Under Section 29C of the Representation of the People Act, 1951 political parties are free to receive voluntary contributions from any person and any company, other than a government company, condition that the parties must account for contributions received in excess of Rs. 20,000 in any financial year. Candidates are also free to receive contributions without limit but are subject to expenditure limits during elections. Neither a political party nor a candidate can receive funding from any foreign sources.

        2. An analysis of income tax returns of some major national political parties between the financial years 2004-05 and 2011-12 done by National Election Watch (NEW) & Association for Democratic Reforms (ADR), came up with the following findings –

        • the Bharatiya Janata Party (BJP) (presently the leading party of the ruling combine) received 84.03% of its total income as donations and voluntary contributions. • The Indian National Congress (INC) (the major party of the ruling combine which was voted out of power in the general elections 2014) which has the highest total income among all political parties, declared 12.98% of its total income as voluntary contributions and 77.34% of its income from sale of coupons. • Income of Bahujan Samaj Party (BSP) from voluntary contributions is 68.05% of its income. • Nationalist Congress Party (NCP) reported 7.74%, the Communist Party of India, 52.50% and the Communist Party of India (Marxist) reported 43.74% of their income having come from voluntary contributions. • The Report also states that INC and BJP are the only two political parties which have received foreign funding, which is a violation of the Foreign Contribution Regulation (FCRA) Act 2010. A Public Interest case filed by ADR in the Delhi High Court resulted in the court ruling that the two parties had violated the FCRA Act by receiving funds from two companies, Sterlite Industries and Sesa Goa, which were Indian subsidiaries of a foreign company, Vedanta, and the two companies were therefore, “foreign source” as defined in the FCRA Act. • NEW-ADR’s analysis of political party incomes also show that only 2.16% of total incomes of national parties is from Electoral Trusts.

        1. An analysis of election expenditure of 537 returned candidates in the general election 2014 (Members of Parliament) by NEW-ADR show that –

        • 25% MPs have used their own funds for their election campaign. • 42% of funds have been received from their political parties. • 33% MPs have used funds received from any person/ company/ firm/ associations/ body of persons etc. as loan, gift or donation etc.

        1. In his book “Bullshit Quotient – Decoding India’s Corporate, Social and Legal Fineprint”, Advocate Ranjeev Dubey writes that, “In the old license permit days, money was everywhere. Every license, every permit, every approval, every gate pass and every official nod had a price….” The book describes three kinds of revenue stream for political funding. First, the low intensity process-based activities that include sovereign processes that generate low but reliable cash revenue streams: customs duties, sales tax, excise, income tax, industrial licenses, construction permissions, customs registrations, etc. for which the job of collecting bribes is contracted out by the minister for a price to a civil servant. “This is true even of the second major revenue stream that generates political funding: government run pseudo corporations….a department that generates political funds will be populated by people who are recovering the money they spent to first get the job and then the post.” Third, is “the event-based political revenue stream...by far the best way to generate large political funding…A few people are involved, the parties negotiate more or less directly and the deal can be done in a simple format….”

        2. Mr. Dubey writes that “….(the) system served its purpose for the best part of 50 years. …The economy is getting deregulated and the system is becoming more transparent all the time. We are cutting down on licenses, permissions, approvals and government intervention in private affairs, generally. Inevitably, political resources have disappeared wherever deregulation has occurred. This means areas of opportunity for politicians keep shrinking….the role of public sector companies in the economy is also declining. What you have left are two residual kinds of fund sources….It is in the nature of sovereignty that some things are difficult to privatize: income tax, customs, sales tax. These are and will in the near future continue to generate political revenues. As for the other source, the best event-based opportunities still come from what survives of the license-permit Raj – ministries where largest licenses are handed out – and that means infrastructure projects of any kind, especially power and telecom. In recent years, such events have also attracted the greatest media exposure.”

        3. In an interview, Rajdeep Sardesai, Journalist, said that “it is not true that parties are the ones spending money on elections. Parties don’t get too much of donations. Individual candidates raise most of their funds directly from contributors. Local influences are factors for determining donor preferences. Individual candidates who the donors think will be able to influence post election decisions get more money."

        4. Dr. Jayaprakash Narayan, President of Lok Satta Party, said that "There was a time when there was proper party funding where the party spent the money or distributed to the candidate. Typically, now the candidate has become remarkably wealthy. He is already a rooted politician, a significant figure in his party, constituency or a person who has already made plenty of money, has political contacts and is now seeking political office. This is the dominant pattern now. Therefore, the candidate's money is the biggest source of funding and today's candidate is really investing money into elections. Candidates have become political entrepreneurs because of political patronage and corruption. Secondly, parties and few of their influential members get money from industry and trade. In anticipation of the political party's nuisance value or some favorable treatment, almost all businesses give to some party or other. The ruling party which gets a little more and opposition parties, a little less. Companies dare not refuse a demand because they are afraid of the nuisance value of the party. And almost always the funding is unaccounted. Companies don't want to pay by check even if the parties are willing to accept. People have offered our party funding, but have gone away when we said we would accept only check payment or have given a tenth of what they were willing to give. Partly, it is the culture of black money, people want to contribute, but only through their unaccounted money. Partly, it is fear, they don't want it to be known that they had contributed to a particular party in case the rival party takes it out on them later. So they prefer secrecy. Third, there may be supporters of individual candidates, parties or caste groups, who may want to contribute through voluntary contribution. Lok Satta Party and Aam Aadmi Party, depend entirely on voluntary contributions, as it happens in Western Europe or North America, etc. The kind of expenditure we have is not illegitimate expenditure. Once we have decided that India cannot move forward by vote buying and the process of power must be clean, then there is no need for illegitimate money. So what is needed is voluntary contribution for legitimate campaign, advertisements, public meetings, running the party office, etc. In fact, Lok Satta Party gets more money by check than the national parties, like the Congress Party reports in Andhra Pradesh, which is absurd."

        5. In an interview, Prof. Trilochan Sastry, Trustee ADR, says that “What the political parties declare to the Income Tax authorities is only a fraction of the funds that they actually have. Even of the amount they declare, about 75% are those received from individuals under the Rs. 20000 limit whose names are not required to be mentioned as per a loophole in the current law. Big money funds these elections. They will expect their pound of flesh after a new Government is sworn in. Much of the crony capitalism stems from this, where natural resources like land, mining and minerals, spectrum, petroleum and natural gas and so on are awarded to various private companies, sometimes at low prices. The companies then use this to borrow big amounts from Banks. ADR data does finds that parties are increasingly favouring rich candidates. Our analysis also shows that chances of a candidate winning rise steadily as his/her assets rise. However, beyond Rs. 20 crores ($ 3.3 million), the wealth doesn’t seem to matter."

        6. Some correlation has been made in this regard between increase in credit during election years in public sector banks (PSBs) because politicians need whatever resources they can to win elections. A 2008 study (which remained relevant in the period of this report) of PSBs titled "Fixing Market Failures or Fixing Elections? Agricultural Credit in India, by Shawn A. Cole, finds that bank loans were being used as a means to “buy” votes in “swing” districts, a mechanism by which a politician induces a bank to lend to individuals, promising to forgive loans if she or he wins the election. The study finds that areas where the ruling party/ coalition won by a margin of 15 per cent or more, received almost 5-6 per cent lower credit than those areas where the voting was closer. Where the margin of victory exceeds 15 per cent, “forgiven” loans increase. Areas, where the ruling party lost, do not witness such largess. Recently, the All India Bank Employees Association (AIBEA) (a trade union of PSBs) wrote to the Chief Election Commissioner to reject nominations of candidates or companies related to them that are willful defaulters of PSB loans. The AIBEA listed 406 top defaulters who owe the PSBs more than Rs. 70000 crores (approx. $ 12 billions). "Some of these defaulters are holding high positions. One of the borrower companies in which a central minister is directly connected is also a defaulter to the tune of Rs. 350 crore. Two top loan defaulters are Padma Sri Awardees and owing to banks Rs. 930 crore and Rs. 580 crore, respectively. Another top defaulter is a member of the Rajya Sabha owing to the banks more than Rs. 6,000 crore….Hence, besides various other existing disqualifications as provided under the Constitution and the Representation of People Act, 1951, a specific provision should be added to debar and disqualify candidates from contesting in the ensuing elections to the Lok Sabha, if they or the companies in which they are connected are defaulters of loans to Banks."

        7. A study by Devesh Kapur and Milan Vaishnav on election finance and the Indian real estate sector finds that the quid pro quo between the politicians and companies is most visible in the real estate business in India. Politicians are known to park their illicit assets in real estate. During election periods, builders need to reroute funds to politicians as a form of indirect election financing. The implication of this nexus is evident in the demand for cement, the indispensable raw material used in the sector, which contracts during elections as builders need to inject funds into campaigns. This study remained relevant in the period of study.

        8. Recent legal developments involving certain non-banking financial institutions operating versions of dubious ponzi schemes show the extent of political patronage and quid pro quo. The complex maze of businesses of the Sahara and Saradha group of companies is under scrutiny of the Supreme Court of India, criminal investigating agencies and the market regulators. The most of their deposits, it is believed, comes from corrupt politicians and public servants and the rich tax evaders, and laundered for them by these companies.

        9. The practice of political parties showing large amount of donations through sale of coupons, for which there were no receipts or information as to who these coupons were sold to is dubious. Coupon system involves selling coupons of certain values and does not require issuing receipts to the buyers of coupons by name for the payments received. The receipts issued for cash donations get recorded in the books of account along with the identity of the donor, but coupon sales are cash donations by unidentified buyers of the coupons and the sources are not known. The INC, for example, reported 77.34% of its income from sale of coupons. Other parties, like the BSP, Trinamool Congress, report that all donations they receive are less than Rs. 20000/- ($ 333) for which no detailed reporting is required as to the sources. This is indicative of black money transactions in political party funding.

        10. In their paper "Reforming India’s Party Financing and Election Expenditure Laws", the authors Gowda and Sridharan say that parties and candidates tend to use their term of office to accumulate war chests for future elections and for nursing their constituencies. There is evidence that they raise these resources through any means available, including through corrupt means such as kickbacks for regulatory and allocative favors while in office. The authors' interviews with industry chief executive officers over a few years (before and after the 2009 national election) indicate that land acquisition and environmental clearances required to set up new plants in the mining, real estate development industries and large industrial projects have become pressure points for extorting payments from businesses. The paper also indicates that small sum membership drives are paid for by politicians rather than individual members through rerouting of black money.


        Peer Reviewer comment: Agree. The Current Research is largely accurate. Parties in India do not as a rule own businesses or trusts. The preponderance of funding comes from not public (no such funding) or individual contributions but from either corporate or "other" sources which are the unidentified sources that contribute the bulk of the funding of parties coming in amounts of under Rs. 20,000 for almost all parties plus sale of coupons without receipts to unidentified buyers in the case of the Congress and Nationalist Congress Party. These "others" could be corporates, or private limited companies or proprietary companies. or individuals with large amounts of black/corruptly gained wealth. Interview-based evidence over recent years (2008-14) indicates that politically regulated sectors (due to land use regulation) like the real estate sector and in parts of the country sectors like mining which generate quick profits are increasingly the sources of funds and decreasingly so the manufacturing sector. An increasing percentage of candidates fund their own campaigns, and in some parties like the BSP, candidates have to virtually "buy" their nominations. Donors also increasingly prefer to fund candidates rather than parties because there is no guarantee that the party will nominate their preferred candidate.

        Scoring Criteria

        Please describe the important sources of funding for electoral campaigns, being sure to answer: 1) where does the preponderance of funding come from - public, individual, corporate, or other; 2) to what extent do individual candidates self-finance; and 3) do political parties have other methods of generating campaign funds, such as owning their own businesses or trusts.

        Sources
        1. The Representation of the People Act, 1951, Section 29C, 1951 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Analysis of Total Income of National Parties between FY 2004-05 and 2011-12, A report by National Election Watch & Association for Democratic Reforms, 4 February 2013 http://adrindia.org/research-and-report/political-party-watch/combined-reports/analysis-total-income-national-parties-be

        3. “Delhi HC finds BJP, Congress guilty of receiving foreign funding”, by Abhinav Garg, The Times of India, 29 March 2014, http://timesofindia.indiatimes.com/news/Delhi-HC-finds-BJP-Congress-guilty-of-receiving-foreign-funding/articleshow/32880140.cms

        4. Analysis of Election Expenditure Statements of MPs from 2014 Lok Sabha Elections, A report by National Election Watch & Association for Democratic Reforms, 1 August, 2014 http://adrindia.org/research-and-report/election-watch/lok-sabha/2014/analysis-election-expenditure-statements-mps-2014-

        5. “Bullshit Quotient – Decoding India’s Corporate, Social and Legal Fineprint”, by Advocate Ranjeev Dubey, Hachette India, 2012, Chapter 14 - Corruption and the Democracy Machine, pp. 172-175

        6. Rajdeep Sardesai, Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        7. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        8. Prof. Trilochan Shastry, Founder Member, Association for Democratic Reforms, Date of Interview: 20 July 2014 http://adrindia.org/about-adr/founders-and-trustees

        9. "Quid Pro Quo: Builders, Politicians and Election Finance in India," Devesh Kapur and Milan Vaishnav, Center for Global Development, December 2011 http://www.cgdev.org/files/1425795fileKapurVaishnavelectionfinanceIndia_FINAL.pdf

        10. "Fixing Market Failures or Fixing Elections? Agricultural Credit in India, Working Paper by Shawn A. Cole, 2008 http://www.hbs.edu/faculty/Publication%20Files/09-001.pdf

        11. "Used to getting away scot-free, bankers ‘upset’ about corruption charges", Sucheta Dalal, monelife.in, 20 August 2014 http://www.moneylife.in/article/used-to-getting-away-scot-free-bankers-upset-about-corruption-charges/38525.html

        12. Saradha Group Financial Scam : http://en.wikipedia.org/wiki/SaradhaGroupfinancial_scandal ; Truth vs Hype: Did Sahara make Rs. 20,000 crore 'vanish'? by Sreenivasan Jain (with inputs from Miloni Bhatt and Niha Masih), NDTV, 7 April 2013 http://www.ndtv.com/article/india/truth-vs-hype-did-sahara-make-rs-20-000-crore-vanish-351095

        13. Lok Sabha Elections 2014-Analysis of Criminal Background, Financial, Education, Gender and other details of Candidates and Winners, A report by National Election Watch & Association for Democratic Reforms, http://adrindia.org/research-and-report/election-watch/lok-sabha/2014/lok-sabha-2014-candidates-analysis-criminal-and-fi ; http://adrindia.org/research-and-report/election-watch/lok-sabha/2014/analysis-comparison-declared-criminal-cases-and-fi

        14. Bailouts for Crooks, by Sucheta Dalal, Moneylife, 29 April 2013 http://www.moneylife.in/article/bailouts-for-crooks/32418.html

        15. "Finance and Opportunity in India" Speech by Dr. Raghuram Rajan, Governor, Reserve Bank of India, at the Twentieth Lalit Doshi Memorial Lecture, 11 August 2014 http://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=908

        16. "IRCTC Link Now Embroils Mamata Banerjee in Saradha Scam", Reported by Monideepa Banerjie, 02 September 2014 http://www.ndtv.com/article/india/irctc-link-now-embroils-mamata-banerjee-in-saradha-scam-585766

        17. "Reforming India’s Party Financing and Election Expenditure Laws", M. V. Rajeev Gowda and E. Sridharan, Election Law Journal, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]

        Reviewer's sources: 1. See "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131] 2. Sridharan, "Reforming Campaign Finance to Tackle Corruption in India", in Samuel Paul, ed., Fighting Corruption: The Way Forward. New Delhi: Academic Foundation, 2013, 43-70, for details on modes of party fund-raising based on interviews with parties, donors and bureaucrats in the know.

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        Open Question: Have there been documented instances of violations of contribution or expenditure limits or any of the laws mentioned above (Section 2)?More about indicator

        Campaign expenditure limits are revised by the government from time to time. The last revision took place by government notification dated 28 February 2014. For Parliamentary constituencies (for elections to the national Parliament) in large States, the expenditure caps is fixed at Rs. 7000000 ($116375) and for small States, the expenditure cap is Rs. 5400000 ($ 89775). In case of Assembly constituencies (for elections to the State assemblies), the expenditure limits for large States is Rs. 2800000 ($ 46550) and small States is Rs. 2000000 ($ 33250).

        A study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) brought out just before the 2014 general elections estimated that Rs 15,000-20,000 crore ($ 2.4 - 3.3 million) would be spent on the general elections by the government and candidates. Despite the increase in the official expenditure limit and the scanner of the Election Commission of India (ECI), the estimate which is based on the previous experience of different agencies at the ground level, shows that in majority of the cases, the contestants would end up spending Rs. 5-7 crore ($ 827,267 - 1,158,173) each.

        The ASSOCHAM study shows the extent of illegal expenditure that is incurred by the candidates during elections. Legal expenditure which is covered in the candidate's election accounts includes cost of public meetings, rallies, posters and banners and advertisements in the media. However, a large part of a candidate's campaign expenditure is illegal which means that the money is spent of bribing voters in cash or kind. The methods of such malpractices get more innovative with time from cash slipped inside newspapers, supplying liquor, drugs, sometimes through local grocery shops, loan waivers, bribing local leader to ensure vote for one party or not vote, disbursements through local NGOs and self-help groups, fake parties organized and food and gifts distributed, use of dummy candidates to split election expenditure or upset the chances of a rival, paid news - paid to journalists and media owners for planting advertisements in newspapers in the garb of news or to black out a rival candidate. The ECI's Compendium of Instructions on Election Expenditure Monitoring serves as a good compilation of these methods that the ECI attempts to monitor.

        Expenditure incurred by the party by its party leaders and "star campaigners" in an election campaign is not accounted for in the expenditure limits of the candidate. This expenditure includes flying in the leaders/ star campaigners private planes, helicopters, fleet of expensive vehicles and other logistics. Advertisement costs incurred by parties are huge. Because of the lack of transparency in financial reporting by political parties, these expenditures are never fully reported and the sources of the funds are not known.

        ASSOCHAM's estimate is more or less validated by those who followed the elections on the ground. Rajdeep Sardesai, senior journalist, said "I have spoken to many candidates and I think individual candidates have spent Rs. 10-20 crores ($ 1654534 - 3309068) on average. In the North, the spending is less about Rs. 5-10 crores ($ 827267 - 1654534), and in the West and South it is about Rs. 20-30 crores ($ 3309068 - 4963602).

        Dr. Jayaprakash Narayan, President of Lok Satta Party, says that "80% - 90% of the funding is unrelated to the campaign. It is about vote buying, distribution of liquor and other short term goodies. In Andhra Pradesh state where I contested from and which had simultaneous polls for Parliament and State Assembly (in Telegana and Andhra Pradesh), all candidates put together would have spent Rs. 8000 crores ($ 1.3 billion). Average candidate spending in Assembly seats would be about Rs. 7 - 8 crores and about Rs. 25 - 30 crores in Parliament seats. Several candidates spent about Rs. 50 crores and a couple of candidates have spent Rs. 150 - 200 crores in the State. Andhra Pradesh is the worst state for illegal expenditure followed by Tamilnadu, Karnataka and Maharashtra. In Jammu and Kashmir, western Uttar Pradesh, Haryana, it is a growing phenomenon. In Bihar, some candidates have spent Rs. 2 crores. In States like Kerala, West Bengal and Gujarat, money power has the least impact.

        T.S. Krishnamurthy, former Chief Election Commissioner said that, "Our law relating to campaign expenditure is flawed. The ceiling is applicable only to candidates and not to the political parties. EC monitoring the candidates expenditure is reasonably good and effective but EC has no control over cash expenditure incurred in subtle manners, often anonymously. Cash expenditure leaves very little trace like cash disbursement to voters. EC can investigate financial statements given by parties/ candidates but it may be difficult to find adequate proof because of loopholes in the law.

        Though the EC has done a good job in the 2014 elections to keep legal expenditure under check, reports on the ground believe that the ECI has not even scratched the tip of the illegal expenditures. ECI's expenditure monitoring teams have closely monitored paid news and have invoked powers of search and seizure that even the law does not permit. These teams have shadowed public meetings to the extent that in some instances candidates have cancelled public meetings because accounting for such meetings would result in over-shooting the legal limits and not accounting for them would get noticed. The media monitoring team have scanned news articles and advertisements and wherever a candidate's name has appeared in the news, it has been presumed to be paid news and the candidate has been asked to account for the article as advertisement in their campaign expenditures. In the course of the 2014 general elections, the ECI seized about Rs. 300 crores in cash, 16 million litres of alcohol and 17000 kg of drugs, among other goods intended for the illegal inducement for the voter, which helped check illegal expenditures to a great extent.

        Contribution sources and reporting is opaque because political parties have not been transparent in their financial reporting. According to Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms, "What the political parties declare to the Income Tax authorities is only a fraction of the funds that they actually have. Even of the amount they declare, about 75% are those received from individuals under the Rs. 20000 limit whose names are not required to be mentioned as per a loophole in the current law. "

        Laws regulating corporate donations have not served its purpose. Advocate Ranjeev C Dubey, Managing Partner, N South Advocates say that "If making corporate donations could immunize corporations from purchasing policy and administrative discretion, the laws allowing corporate donations would work. Good governance apart, compliance is always a function of (1) the creation of fair rules and (2) their rigorous just enforcement."

        A recent development on the use of contribution funds for which parties enjoy tax exemption, for a purpose which is non-exempt, shows to what extent the ECI has its work cut out. A Delhi court is now hearing a criminal complaint against various Congress leaders on allegations of cheating and misappropriation of funds in acquiring ownership of a defunct newspaper 'National Herald' by Young Indian (YI), a non-profit organization. According to the complaint, the Indian National Congress (INC) party gave a loan of Rs. 90 crores ($ 14839245) to a private company, Associated Journals Limited (ALJ) which published the 'National Herald' and other newspapers, which then converted the loan and gave 99 per cent of ordinary shares of AJL to YI. Presence of senior leaders of the INC in both ALJ and YI was a common link.


        Peer Reviewer comment: Agree. The Current Research gives a broadly credible account of the extremely murky area of electoral expenditures and fund-raising. However, while the ECI seizures of money used for vote-buying, and likewise of liquor and drugs, is documented by them, it is very difficult to document instances of violation of contribution limits since the only limits are the 7.5% of average net profit over the past three years, applied to corporate donations by the Companies Act, 2013, section 182, and companies will not declare anything beyond that. The bulk of contributrions come in the ostensibly small amounts of under Rs. 20,000 that do not require donor identification (before the Aug. 29, 2014, guidelines) and this is where the black/corrupt/undeclared corporate and other donations come in. Likewise, it is hard to document violation of expenditure limits because these in effect apply only to candidates, there being loopholes (Explanation 1, 2 to Sec. 77 RPA) that do not constrain party expenditures. All candidates in 2014 stayed, according to their declarations, within the Rs. 70,00,000 limit. Likewise, about financial contributions that circumvent the regulatory framework, this question will become more interesting after the coming into effect from Oct. 1, 2014 of the new transparency guidelines. As far as the 2014 election is concerned, the regulatory framework allows for non-transparency and hence for easy circumvention due to the Rs. 20,000 floor below which donations can be anonymous, thus enabling vast amounts of unaccounted and underdeclared income for parties and correspondingly large party expenditures as the Current Research documents, and as the ECI itself has estimated the spending of winning candidates to be (Rs. 5-10 crores average for a winner in 2009).

        Scoring Criteria

        Please list and describe all documented instances of: 1) violation of contribution limits, 2) violation of expenditure limits, and 3) financial contributions that circumvent the regulatory framework. The objective of this question is to learn more about the local context, so please explain the cases in as much detail as relevant.

        Sources
        1. "Elections to give Rs 60,000 crore GDP boost to economy: ASSOCHAM", 12 March 2014 http://www.assocham.org/prels/shownews-archive.php?id=4421

        2. "How candidates cook books to spend crores over Election Commission limit", The Times of India, 11 April 2014, http://timesofindia.indiatimes.com/news/How-candidates-cook-books-to-spend-crores-over-Election-Commission-limit/articleshow/33577943.cms

        3. "Model Code violation: 93 complaints registered in Haryana", Press Trust of India, 3 April 2014 http://www.business-standard.com/article/pti-stories/model-code-violation-93-complaints-registered-in-haryana-114040301249_1.html

        4. "How political parties have a well-oiled system of hiring aircraft during elections" by Binoy Prabhakar, Economic Times, 23 March 2014 http://articles.economictimes.indiatimes.com/2014-03-23/news/484915471air-india-narendra-modi-aircraft

        5. Election violation cases against DMK, IJK candidate, The Hindu, 27 March 2014 http://www.thehindu.com/news/cities/Tiruchirapalli/election-violation-cases-against-dmk-ijk-candidates/article5838507.ece

        6. "Sanjay Dina Patil, Kirit Somaiya exceeded poll expense limit, says Medha Patkar", India Today, 15 May 2014 http://indiatoday.intoday.in/story/sanjay-dina-patil/1/361930.html

        7. Interview with Rajdeep Sardesai, Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        8. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        9. Interview with expert source who requested anonymity. August 2014.

        10. Election Commission of India, Search and Seizure Information http://eci.nic.in/ecimain1/GE2014/RptConsolidatedsearchsezuireStatewise%20-%20for%20merge.htm

        11. "EC declares 7 contestants campaigning for other aspirants in Muzaffarnagar as 'dummy' candidates", Press Trust of India, 30 March 2014 http://ibnlive.in.com/news/ec-declares-7-contestants-campaigning-for-other-aspirants-in-muzaffarnagar-as-dummy-candidates/461341-80.html

        12. Election Commission of India, Compendium of Instructions on Election Expenditure Monitoring, January 2014 http://eci.nic.in/ecimain/ElectoralLaws/compendium/compendium201403022014.pdf

        13. "BJP's advertisement plan may cost a whopping Rs. 5,000 cr", by Himani Chandna Gurtoo, Hindustan Times, 13 April 2014 http://www.hindustantimes.com/elections2014/state-of-the-states/advertisement-war-to-win-lok-sabha-elections-may-cost-bjp-whopping-rs-5-000-crore/article1-1207499.aspx

        14. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        15. "Political party can write off or assign loans: Sonia to HC", PTI, Business Standard, 5 August 2014, http://www.business-standard.com/article/pti-stories/political-party-can-write-off-or-assign-loans-sonia-to-hc-114080501695_1.html

        16. "5,000 shareholders are big losers in National Herald case", by Abhimanyu Singh, Sunday Guardian, 9 August 2014 http://www.sunday-guardian.com/news/5000-shareholders-are-big-losers-in-national-herald-case

        17. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        18. Interview with Advocate Ranjeev C Dubey, Managing Partner, N South Advocates [http://www.ranjeevdubey.com/]; Date of interview - 30 July 14.

        Reviewer's sources: 1. See "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131] and E. Sridharan, "Reforming Campaign Finance to Tackle Corruption in India", in Samuel Paul, ed., Fighting Corruption: The Way Forward. New Delhi: Academic Foundation, 2013, 43-70, for details on modes of party fund-raising based on interviews with parties, donors and bureaucrats in the know.
        2. Interview with a senior ECI official, Nov. 5, 2014, for support of the evasion of limits.
        3. Companies Act 2013, Section 182, 2013, http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf
        4. For the Rs. 5-10 crores figure for a 2009 winner, former CEC Quraishi quoted in Sarika Malhotra, “Economy vs Democracy”, Business Today April 27, 2014 (http://businesstoday.intoday.in/story/lok-sabha-election-2014-campaign-trends-new-govt-challenges/1/204871.html) accessed on November 16, 2014.

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    Reporting and Public Disclosure

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      Reporting Requirements to the Oversight Entity
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        MODERATE
        In law, political parties and individual candidates report itemized contributions and expenditures both during and outside electoral campaign periods.More about indicator
        1. Political Parties are required to file annual financial reports under Section 29C of the Representation of the People Act, 1951 giving information on: (a) The donations received by the political party from any person in that financial year in excess of Rs. 20000 ($333). (b) The donations received by the political party in excess of Rs. 20000 ($333) from companies other than government companies in that financial year.

        2. The treasurer of the political party has to submit this financial report in Form 24A prescribed under Rule 85B of Conduct of Elections Rules 1961 to the Election Commission of India before the date of submission of the audited accounts of the party to the Income Tax authorities. Noncompliance with the statutory requirement will disentitle the party from any tax relief under the Income Tax Act, 1961. Form 24A prescribes the following itemized breakup of such contributions received by the party –

        3. Name of Political Party

        4. Status of the Political Party (recognised/unrecognised)
        5. Address of the headquarters of the Political Party
        6. Date of registration of Political Party with Election Commission
        7. Permanent Account Number (PAN) and Income-tax Ward/Circle where return of the political party is filed
        8. Details of the contributions received, in excess of rupees twenty thousand, during the Financial Year with Name and complete address of the contributing person/company, PAN (if any) and Income-Tax Ward/Circle, Amount of contribution, Mode of contribution (whether by cheque/demand draft/cash with name of the bank and branch of the bank on which the cheque/demand draft has been drawn.
        9. In case the contributor is a company, whether the conditions laid down under section 293A of the Companies Act, 1956 (1 of 1956) (now Section 182 of Companies Act 2013) have been complied with (A copy of the certificate to this obtained from the company should be attached).

        10. The relevant provision of Section 29C of the Representation of the People Act, 1951 is as follows:

        "29C. Declaration of donation received by the political parties.—(1) The treasurer of a political party or any other person authorised by the political party in this behalf shall, in each financial year, prepare a report in respect of the following, namely: —

        (a) the contribution in excess of twenty thousand rupees received by such political party from any person in that financial year; (b) the contribution in excess of twenty thousand rupees received by such political party from companies other than Government companies in that financial year.

        (2) The report under sub-section (1) shall be in such form as may be prescribed.

        (3) The report for a financial year under sub-section (1) shall be submitted by the treasurer of a political party or any other person authorised by the political party in this behalf before the due date for furnishing a return of its income of that financial year under section 139 of the Income-tax Act, 1961 (43 of 1961), to the Election Commission.

        (4) Where the treasurer of any political party or any other person authorised by the political party in this behalf fails to submit a report under sub-section (3) then, notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), such political party shall not be entitled to any tax relief under that Act."

        1. Rule 85B of Conduct of Elections Rules 1961 states -

        "85B. Form of contributions report.—The report for a financial year under sub-section (1) of section 29C shall be submitted in form 24A by the treasurer of a political party or any other person authorised by the political party in this behalf, before the due date for furnishing a return of its income of that financial year under section 139 of the Income Tax Act, 1961 (43 of 1961), to the Election Commission."

        1. Political parties are required to separately report their expenditures for each election to the Lok Sabha and State Assemblies. This "Statement of Election Expenditure" has to be filed within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections with the Election Commission of India to enable scrutiny of expenditure incurred or authorized by the political parties or candidates put up them vis-a-vis the exemptions claimed by them under Explanation1 of Section 77(1) of the Representation of People Act 1951 (with regard to expenditure incurred on campaigns by designated leaders of the political party) in the candidate's election expenses reports.

        2. During election period, candidates are required to maintain the day to day account of election expenses in a register giving the details of the expenditure incurred/authorized by

        (i) political party which has set him/ her up, and (ii) any other political party supporting him/ her, (iii) any other association/organization/body supporting him/ her, and (iv) any other individual supporting him/ her.

        1. Section 77 of the Representation of People Act 1951, read with Rule 90 of the Conduct of Election Rules 1961, prescribes the maximum expenditure that can be incurred by a candidate and this expenditure has to be accounted for as per procedure. Only expenditure incurred by leaders of a political party on account of travel by air or by any other means of transport for propagating programme of the political party and any expenditure incurred in respect of any arrangements made, facilities provided or any other act or thing done by any government official in the discharge or purported discharge of his/ her official duty, is excluded from the candidate's expenditure.

        2. The standard format of the register for maintenance of day to day accounts and the format for furnishing abstract statement of details of expenditure by political parties, other associations, etc. have been prescribed by the Election Commission (Appendix XXXI-A of the Candidates Handbook). At the time of the elections, a copy of the register is provided to the candidate by the Returning Officer. The register containing the candidate's accounts has to be filed by the candidate with the District Election Officer as his account of election expenses within 30 days from the date of declaration of result of election along with the abstract statement showing the details of expenditure accompanied by an affidavit by the candidate, as required under Section 78 of the Representation of People Act 1951.

        3. The itemized information the candidate has to account for are following:

        (a) the date on which the expenditure was incurred or authorized; (b) the nature of the expenditure (as for example, travelling, postage or printing and so on); (c) the amount of the expenditure, i.e.- (i) the amount paid; (ii) the amount outstanding; (d) the date of payment; (e) name and address of the payee; (f) the serial number of vouchers in case of amount paid; (g) the serial number of bills, if any, in case of amount outstanding; (h) the name and address of the person to whom the amount outstanding is payable.

        1. All expenses have to be supported by vouchers, receipts, acknowledgements, etc., (except where it is unnecessary to obtain such documents). Along with the details of expenditure, the candidate should also report the following aspects of contributions received by him for the campaign:

        i) Any lump-sum grant received from a political party, any other association / body, any individual by the candidate;

        ii) Details of all expenditure incurred on public meetings, processions, campaign materials, like, handbills, posters, video and audio cassettes, loudspeakers etc., campaign through electronic / print media (including cable network), vehicles used and expenditure on such vehicles, erection of gates, arches, cutouts, banners, etc., visits of ‘leaders’ to the constituency (other than the expenditure on the travel of ‘Leaders’ of the party defined in Explanation 2 under Section 77(1) for propagating programme of the party), visit of other party functionaries and other misc. expenses, which may have been supplied to candidate or spent on the candidate by his political party or any other association/ organization/body or by any other individual.

        1. Election Commission of India has recently issued guidelines on transparency and accountability in party funds and election expenditure reiterating the legal requirements of contributions received by political parties. The guidelines state that political parties shall maintain name and address of all such individuals, companies or entities making donation to it, excepting petty sums donated by the public only during its public rallies. Further, any amount/ donation received in cash, shall be accounted in relevant account books and deposited in the party's bank account within a week of its receipt. However, the party can retain a reasonable amount required for day to day functioning of the party and for defraying the cash expenses. The guidelines also reiterate that if the party desires to provide any financial assistance to its candidates for their election expenses, such assistance shall not exceed the prescribed ceiling. Any payment in this regard by the party shall be made only through crossed account payee cheque or draft or through bank account transfer and not in cash.
        Scoring Criteria

        A YES score is earned where political parties and individual candidates are required to report itemized contributions and expenditures to the oversight authority, both during and outside electoral campaign periods.

        A MODERATE score is earned where: 1) the requirement applies for itemized contributions, but not for itemized expenditures, or 2) it applies only during the electoral campaign but not outside it. A MODERATE score is also earned where the requirement exists, but it only applies to one actor (whether political parties and individual candidates).

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Sections 29C, 77 and 78, 1951 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Conduct of Elections Rules 1961, Rule 85B and Form 24A and Rule 90,1961 http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        3. Election Commission of India, Candidate Handbook 2014, APPENDIX-XXXI-A - REGISTER FOR MAINTENANCE OF DAY TO DAY ACCOUNTS OF ELECTION EXPENDITURE BY CONTESTING CANDIDATES; pp. 346-349, http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        4. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS%2021012013.pdf

        5. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

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        MODERATE
        In law, political parties and individual candidates are required to report their financial information on a monthly basis during the electoral campaign.More about indicator

        Political parties and individual candidates don't have to report their financial information on a monthly basis during the electoral campaign. An electoral campaign comes into effect for political parties and candidates immediately with the announcement of the election schedule by Election Commission of India (ECI) which is usually a few weeks before the actual voting begins. General election to the national Parliament held once in five years is normally held in phases and can last up to 3 months till the declaration of results.

        Under Section 29C of the Representation of the People Act, 1951, read with Rule 85B of Conduct of Elections Rules 1961, political parties have to file annual contribution reports to the Election Commission of India and income tax returns to the income tax authorities. Political parties are also required to report their expenditures for each election to the Lok Sabha and State Assemblies. This "Statement of Election Expenditure" has to be filed within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections with the Election Commission of India.

        Under Section 77 of the Representation of People Act 1951, read with Rule 90 of the Conduct of Election Rules 1961, candidates are required to file expenditure statements in the form of a register containing the candidate's day to day accounts during the election period within 30 days from the date of declaration of result of election along with the abstract statement showing the details of expenditure. Candidates financial information includes details of the expenditure incurred/authorized by (i) political party which has set him/ her up, and (ii) any other political party supporting him/ her, (iii) any other association/organization/body supporting him/ her, and (iv) any other individual supporting him/ her.

        During election period, a candidate has to maintain expenditure accounts which include reporting source of funds raised by the candidate (whether own sources, any party, any person, company, firm, association, etc.) and expenditure incurred on the candidate by his political party or any other association/ organization/body or by any other individual.

        General election to the national Parliament held once in five years is normally held in phases and can last up to 3 months till the declaration of results. The last general elections were declared on 5 March 2014 and results were declared on 16 May 2014 (71 days). Since elections in India are held in phases and results declared on the same day for all phases, a candidate’s expenditure report could vary from about 45 days (in the earlier phases) to 22 days (in the final phase). The reporting period for all candidates is therefore not uniform. While this reporting happens only during elections which happens once in 5 years, it would not qualify as “quarterly” in this sense. However, the post election report submitted covers a period of less than three months.

        Peer Reviewer comment: Although candidates do not have to report on a monthly basis during the campaign period, it should be noted that they have to submit a register of day-to-day accounts; hence, there is some degree of disaggregated transparency of candidate expenditures during the campaign period, although it should also be noted as mentioned in earlier comments that candidate expenditures are only a small fraction of true election expenditures.

        Scoring Criteria

        A YES score is earned where political parties and individual candidates must report monthly their financial information to the oversight authority during the electoral campaign.

        A MODERATE score is earned where the requirement exists on a quarterly basis. A MODERATE score is also earned where the requirement only applies to one actor (whether political parties or individual candidates).

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Sections 29C, 77 and 78, 1951 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Conduct of Elections Rules 1961, Rule 85B and Form 24A and Rule 90,1961 http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        3. Candidate Handbook 2014, pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        4. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS%2021012013.pdf

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        MODERATE
        In law, political parties and individual candidates are required to report their financial information on a quarterly basis outside of electoral campaign periods.More about indicator

        Political parties and individual candidates are not required to report their financial information on a quarterly basis outside of electoral campaign periods.

        Under Section 29C of the Representation of the People Act, 1951, read with Rule 85B of Conduct of Elections Rules 1961, political parties have to file annual contribution reports to the Election Commission of India and income tax returns to the income tax authorities. Political parties are also required to report their expenditures for each election to the Lok Sabha and State Assemblies. This "Statement of Election Expenditure" has to be filed within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections with the Election Commission of India.

        Candidates are not required to report their financial information outside of electoral campaign periods. Under Section 77 of the Representation of People Act 1951, read with Rule 90 of the Conduct of Election Rules 1961, candidates are required to file expenditure statements only during the time of elections. Candidates financial information includes details of the expenditure incurred/authorized by (i) political party which has set him/ her up, and (ii) any other political party supporting him/ her, (iii) any other association/organization/body supporting him/ her, and (iv) any other individual supporting him/ her.

        Peer Reviewer comment: Agree. Annual or quarterly financial reports would apply only to parties and not to candidates because the latter are candidates only from nomination to 30 days after the election by which they need to file their expenditure reports.

        Scoring Criteria

        A YES score is earned where political parties and individual candidates must report quarterly their financial information to the oversight authority outside of electoral campaign periods.

        A MODERATE score is earned where the requirement exists on a yearly basis. A MODERATE score is also earned where the requirement only applies to one actor (whether political parties or individual candidates).

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Sections 29C, 77 and 78, 1951 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Conduct of Elections Rules 1961, Rule 85B and Form 24A and Rule 90,1961 http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        3. Candidate Handbook 2014, pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        4. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS%2021012013.pdf

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        0
        In practice, to what extent do political parties and individual candidates report itemized financial information monthly?More about indicator

        During election period, a candidate has to maintain expenditure accounts which includes reporting source of funds raised by the candidate (whether own sources, any party, any person, company, firm, association, etc.) and expenditure incurred on the candidate by his political party or any other association/ organization/body or by any other individual. Political parties are required to submit contribution reports annually to the ECI and expenditure reports during elections within 90 days. General elections to the national Parliament held once in five years, are normally held in phases and can last up to 3 months till the declaration of results. The last general elections were declared on 5 March 2014 and results were declared on 16 May 2014 (71 days). Since elections in India are held in phases and results declared on the same day for all phases, a candidate’s expenditure report could vary from about 45 days (in the earlier phases) to 22 days (in the final phase). The reporting period for all candidates is therefore not uniform. Political parties do not file their reports within the 90 days timeline after close of elections. The period of reporting on expenditure and contribution by candidates and political parties is therefore, less than a quarter.

        The legal requirement for political parties is to file annual contribution reports to the Election Commission of India (ECI) and income tax returns to the income tax authorities. The contribution report has to be submitted in Form 24A which prescribes the itemized breakup of such contributions received by the party. However, an analysis of donations received by political parties between financial year 2004-05 to 2011-12 as reported to the ECI done by National Election Watch-Association for Democratic Reforms show that political parties do not file the reports in time and the information relating to the source of funding is incomplete. Donors to Electoral Trusts are not mentioned.

        During election periods, political parties have to report their expenditures for each election to the Lok Sabha and State Assemblies within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections to the ECI. Parties have failed to comply with this mandate as evident from the list of defaulters put up by the ECI on is website from previous elections.

        Candidates are required to file expenditure statements in the form of a register containing the candidate's day to day accounts during the election period within 30 days from the date of declaration of result of election along with the abstract statement showing the details of expenditure. Candidates financial information includes details of the expenditure incurred/authorized by (i) political party which has set him/ her up, and (ii) any other political party supporting him/ her, (iii) any other association/organization/body supporting him/ her, and (iv) any other individual supporting him/ her.

        From an analysis of candidate expenditure statements of the 537 winning candidates in the general elections 2014, done by National Election Watch-Association for Democratic Reforms, candidates appear to have filed their expenditure statements in time before the District Election Officers of the constituency. However, there has been a delay in uploading these statements on the State Election Commission website. The report also notes that columns have been left blank, illegibility is a problem and there have been overwriting in figures mentioned in the statement.

        T.S. Krishna Murthy, Former Chief Election Commissioner of India, says that "political parties have established certain unhealthy practices in poll expenditure due to loopholes in law and competitive spending towards poor/ illiterate voters. The main difficulty is that there is no separate law on regulating political parties.The tax law gives the political parties tax exemption so long as their accounts are audited. There is no prescribed procedure in maintenance of their accounts. There is no public disclosure of accounts quarterly or annually. Funds are collected by political parties in cash or by cheques as law does not require receipts should be by cheques. Individuals/corporate houses and and any other institution can contribute without giving tax identity particulars. Very often parties get cash donations anonymously although addresses given are not verified especially if they are in small amounts. Donations received above Rs. 20,000 are mandatorily to be disclosed to the EC which are available in EC website. As far as I know, the individual and small denomination donations are not vigorously verified by tax authorities."


        Peer Reviewer comment: Agree. Monthly reports would not be a practical proposition in India given the relatively uninstitutionalised state of most political parties.

        As for itemization, while contributions above Rs.20,000 have had to be reported so far, and now with the new transparency guidelines of 29 Aug. 2014 those under Rs.20,000 have to be reported too, so far the bulk of party incomes which come in the under-Rs.20,000 category escape itemised reporting. Likewise, for expenditures of candidtes, although detailed reporting during the campaign period is mandatory, the expenditures of political parties for propagating their party programme and not spending to support the candidate does not need itemised reporting except to submit chartererd accountant certified consolidated accounts to the Income Tax Department for income tax returns. Hence, there is only partial itemisation of reporting of party expenditures and incomes, with the bulk of both, in effect, escaping itemised reporting.

        Scoring Criteria

        A 100 score is earned where: 1) political parties and individual candidates report on their financial information monthly, and 2) the reports include both itemized contributions and itemized expenditures.

        A 50 score is earned where: 1) the reports are occasionally general rather than itemized or don't contain all accounts, or 2) the reporting frequency is quarterly.

        A 0 score is earned where: 1) political parties and individual candidates rarely or never file reports, 2) the reports are filed but are rarely or never itemized or refer only to either contributions or expenditures, or 3) the reporting frequency is less than quarterly.

        Sources
        1. Election Commission of India, Political Parties Yearly Contribution Reports, http://eci.nic.in/eci_main1/PolPar/YearlyContributionReports.aspx

        http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR_2014/Biju%20Swabhiman%20Dal,%20Odisha,%202013-14.pdf (sample report)

        1. Election Commission of India, Political Parties Expenditure Reports, http://eci.nic.in/ecimain1/PolPar/politicalpartiesExpenditurereport_CGMPMZRJDL2013.aspx

        http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR_2013/Bahujan%20Samaj%20Party2013.pdf (sample report)

        1. Election Commission of India, Political Parties Annual Audit Reports http://eci.nic.in/eci_main1/PolPar/annualauditreport2013.aspx

        http://eci.nic.in/ecimain/mis-PoliticalParties/AAR2013/Nationalist%20Congress%20Party12-13.pdf (sample report)

        1. Chief Electoral Officer, Delhi, Candidates Election Expenditure Abstract Statement for General Elections to Lok Sabha 2014 http://ceodelhi.gov.in/OnlineErms/ShowDaytoDayElectionExpendeture1.aspx

        http://ceodelhi.gov.in/PDFFolder2/621_LS.pdf (Sample report)

        1. Analysis of Total Income of National Parties between FY 2004-05 and 2011-12, A report by National Election Watch & Association for Democratic Reforms, 4 February 2013 http://adrindia.org/research-and-report/political-party-watch/combined-reports/analysis-total-income-national-parties-be

        2. Election Commission of India, Submission of Election Expenditure Statements, Political Party-wise (Recognized) Consolidated Statement of Defaulters (as on 20.5.14) http://eci.nic.in/ecimain/mis-PoliticalParties/ElectionExpenses/ConsolidatedStatementofDefaulters18062014.pdf

        3. Analysis of Election Expenditure Statements of MPs from 2014 Lok Sabha Elections, A report by National Election Watch & Association for Democratic Reforms, 1 August, 2014 http://adrindia.org/research-and-report/election-watch/lok-sabha/2014/analysis-election-expenditure-statements-mps-2014-

        4. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        Reviewer's sources: 1. For the largely dynastic and uninstitutionalised nature of most Indian parties, see Pradeep Chhibber, "Dynastic parties: Organization, finance and impact," PARTY POLITICS, 19 (March 2013), 277-295. [Available at http://ppq.sagepub.com/content/vol19/issue2/ ]

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        25
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        25
        In practice, to what extent do financial reports by political parties and individual candidates include all types of contributions?More about indicator

        Contribution reports submitted to the Election Commission of India (ECI) by political parties are indifferently furnished. An analysis of donations received by political parties between financial year 2004-05 to 2011-12 as reported to the ECI done by National Election Watch-Association for Democratic Reforms show that political parties do not file the reports in time and the information relating to the source of funding is incomplete. In respect to Electoral Trusts, names of donors are not mentioned.

        As may be seen from a sample statement, complete information about the donor, mode of payment, etc. are missing from the report.

        During election periods, political parties have to report their expenditures for each election to the Lok Sabha and State Assemblies within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections to the ECI. Parties have failed to comply with this mandate as evident from the list of defaulters put up by the ECI on is website from previous elections.

        Candidates are required to file expenditure statements in the form of a register containing the candidate's day to day accounts during the election period within 30 days from the date of declaration of result of election along with the abstract statement showing the details of expenditure. From an analysis of candidate expenditure statements of the 537 winning candidates in the general elections 2014, done by National Election Watch-Association for Democratic Reforms, candidates appear to have filed their expenditure statements in time before the District Election Officers of the constituency. However, there has been a delay in uploading these statements on the State Election Commission website. The report also notes that columns have been left blank, illegibility is a problem and there have been overwriting in figures mentioned in the statement.

        For instance, a Delhi court is now hearing a criminal complaint against various Congress leaders on allegations of cheating and misappropriation of funds in acquiring ownership of a defunct newspaper 'National Herald' by Young Indian (YI), a non-profit organization. According to the complaint, the Indian National Congress (INC) party gave a loan of Rs. 90 crores ($ 14,839,245) to a private company, Associated Journals Limited (ALJ) which published the 'National Herald' and other newspapers, which then converted the loan and gave 99 per cent of ordinary shares of AJL to YI. Presence of senior leaders of the INC in both ALJ and YI was a common link. The financial reports of parties do not disclose full and correct details of transactions such as these.


        Peer Reviewer comment: Agree. Financial reports by parties include only the names, addresses and amounts contributed by donors of Rs. 20,000 and above, as per the law till the 29 Aug. 2014 transparency guidelines and hence are highly incomplete since the great majority of party incomes are from amounts below Rs. 20,000, and even those declared incomes appear suspect in that they are probably huge underdeclarations. The great majority of contributions are probably anonymous given that the great majority of party incomes are from unidentified donors and (for the Congress) from buyers of coupons. Donors probably give directly to candidates but there are no reports and no reporting requirements for this other than under the Income Tax Act for everyone not necessarily candidates.

        Scoring Criteria

        A 100 score is earned where: 1) reports include an itemized list of all contributions indicating their type (in-kind, cash where allowed, etc.) and amount (estimated value for in-kind contributions), and 2) contain donors' names and addresses (or other personal identifier).

        A 50 score is earned where only one of the two conditions listed in the 100 criteria is met.

        A 0 score is earned where neither condition is met.

        Sources
        1. Election Commission of India, Political Parties Yearly Contribution Reports, website accessed September 2014. http://eci.nic.in/eci_main1/PolPar/YearlyContributionReports.aspx

        http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR_2014/Biju%20Swabhiman%20Dal,%20Odisha,%202013-14.pdf (sample report)

        1. Election Commission of India, Political Parties Expenditure Reports, website accessed September 2014. http://eci.nic.in/ecimain1/PolPar/politicalpartiesExpenditurereport_CGMPMZRJDL2013.aspx

        http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR_2013/BJP%20Contribution,%202012-13.pdf (sample report)

        1. Election Commission of India, Political Parties Annual Audit Reports, website accessed September 2014. http://eci.nic.in/eci_main1/PolPar/annualauditreport2013.aspx

        http://eci.nic.in/ecimain/mis-PoliticalParties/AAR2013/Nationalist%20Congress%20Party12-13.pdf (sample report)

        1. Chief Electoral Officer, Delhi, Candidates Election Expenditure Abstract Statement for General Elections to Lok Sabha 2014 http://ceodelhi.gov.in/OnlineErms/ShowDaytoDayElectionExpendeture1.aspx

        http://ceodelhi.gov.in/PDFFolder2/621_LS.pdf (Sample report)

        1. Analysis of Total Income of National Parties between FY 2004-05 and 2011-12, A report by National Election Watch & Association for Democratic Reforms, 4 February 2013 http://adrindia.org/research-and-report/political-party-watch/combined-reports/analysis-total-income-national-parties-be

        2. Election Commission of India, Submission of Election Expenditure Statements, Political Party-wise (Recognized) Consolidated Statement of Defaulters (as on 20.5.14) http://eci.nic.in/ecimain/mis-PoliticalParties/ElectionExpenses/ConsolidatedStatementofDefaulters18062014.pdf

        3. Analysis of Election Expenditure Statements of MPs from 2014 Lok Sabha Elections, A report by National Election Watch & Association for Democratic Reforms, 1 August, 2014 http://adrindia.org/research-and-report/election-watch/lok-sabha/2014/analysis-election-expenditure-statements-mps-2014-

        4. "Political party can write off or assign loans: Sonia to HC", PTI, Business Standard, 5 August 2014, http://www.business-standard.com/article/pti-stories/political-party-can-write-off-or-assign-loans-sonia-to-hc-114080501695_1.html

        5. "5,000 shareholders are big losers in National Herald case", by Abhimanyu Singh, Sunday Guardian, 9 August 2014 http://www.sunday-guardian.com/news/5000-shareholders-are-big-losers-in-national-herald-case

        Reviewer's sources: 1. See "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131] and E. Sridharan, "Reforming Campaign Finance to Tackle Corruption in India", in Samuel Paul, ed., Fighting Corruption: The Way Forward. New Delhi: Academic Foundation, 2013, 43-70, for details on modes of party fund-raising based on interviews with parties, donors and bureaucrats in the know and on only partial declaration of receipts including supporting ADR data that show that the bulk of incomes of most parties are declared to be in the under-Rs.20.000 per donation category.
        2. Interview with a senior ECI official who requested anonymity, Nov. 5, 2014, for support for only partially itemised reporting.

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      Availability of Electoral Campaigns' Financial Information to the Public
      More about category
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        YES
        In law, financial information from political parties and individual candidates must be available to the public.More about indicator

        While there are no laws specifically mandating that public access be provided to financial information from political parties and individual candidates, using its plenary powers under Article 324 of the Constitution, the Election Commission of India (ECI) has directed that these reports submitted to it by political parties and candidates be made available on its website and on the website of the Chief Electoral Officer (CEO) in the States in the interest of transparency. Section 4 of India's Right to Information Act 2005, also mandates public authorities to place information about their functioning and decisions in the public domain proactively.

        POLITICAL PARTIES Political Parties are required to file annual financial reports under Section 29C of the Representation of the People Act, 1951 in Form 24A (prescribed under Rule 85B of Conduct of Elections Rules 1961) with the Election Commission of India (ECI). As of 6 June 2014, ECI has also issued guidelines for submission of contribution reports of Electoral Trusts registered with the government (Electoral Trusts are set up by private companies to receive voluntary contributions from any company or individual for funding of Political parties) which requires such Trusts to submit an Annual Report of contributions to the ECI in a format prescribed for the purpose. Political parties are also required to submit a "Statement of Election Expenditure" for each election to the Lok Sabha and State Assemblies to the ECI within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections.

        Political Parties Yearly Contribution Reports, Annual Audit Reports and Expenditure Statements are placed in the public domain by the ECI on its website.

        In a landmark decision in June 2013, the Central Information Commission (CIC) declared that political parties were ‘public authorities’ under the Right to Information Act 2005 (RTI Act). The implication of the CIC decision was that political parties were obligated to respond to information requests from the public and publish proactive disclosures about their internal functioning. The then government tried to introduce an amendment to the RTI Act in Parliament to exclude political parties from the ambit of the RTI Act which was supported by nearly all the opposition parties. However, the government eventually did not push through with the amendment because of the negative publicity in the media and civil society protests on the eve of 2014 general elections. Though political parties have still not complied with the order of the CIC, no party has challenged the order in court.

        CANDIDATES During election period, candidates are required to maintain the day to day account of election expenses in a register (under Section 77 of the Representation of People Act 1951, read with Rule 90 of the Conduct of Election Rules 1961 in the format prescribed at Appendix XXXI-A of the Candidates Handbook). The register has to be filed by the candidate with the District Election Officer (DEO) within 30 days from the date of declaration of result of election along with the abstract statement showing the details of expenditure accompanied by an affidavit by the candidate.

        The day-to-day account register together with the supporting documents is required to be made available by the candidate for inspection on three occasions between finalization of candidature and the date of poll to the Returning Officer, Election Observer or any other official appointed for this purpose. One copy of the inspected pages of the register is displayed on Returning Officer’s notice board and a copy may be provided to any person on payment of usual copying charges. After filing of the final election expenditure reports with the DEO, any person can, on payment of a fee of rupee one (US $ 0.016) and photocopying charges, inspect the account lodged with the DEO by a candidate.

        Election expenditure reports of candidates are displayed on the websites of the CEO of the States from where the candidate is contesting the elections.

        Scoring Criteria

        A YES score is earned where in law financial information of political parties and individual candidates must be made available to the public, whether online or digitally within two days of request.

        A MODERATE score is earned where financial information must be made available to the public, but no requirement exists regarding cost, format or number of days within which it must be made available.

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of the People Act, 1951, Sections 29C, 77 and 78, 1951 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Conduct of Elections Rules 1961, Rule 85B and Form 24A and Rule 90,1961 http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        3. Candidate Handbook 2014, pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        4. Election Commission of India, Candidate Handbook 2014, APPENDIX-XXXI-A - REGISTER FOR MAINTENANCE OF DAY TO DAY ACCOUNTS OF ELECTION EXPENDITURE BY CONTESTING CANDIDATES; pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        5. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS%2021012013.pdf

        6. Election Commission of India, No.56/Electoral Trusts/2014/PPEMS, dated 6 June 2014, Guidelines for submission of contribution reports of the Electoral Trusts http://eci.nic.in/ecimain1/PolPar/ElectoralTrust06062014.pdf

        7. Central Information Commission order dated 3rd June 2013 in Subhash Chandra Aggarwal and Anil Bairwal vs Indian National Congress & others [File No. CIC/SM/C/2011/001386 & File No. CIC/SM/C/2011/000838] http://www.rti.india.gov.in/cicdecisions/CICSMC2011000838M_111223.pdf

        8. The Right to Information Act, 2005, Section 4, 2005, http://rti.gov.in/rti-act.pdf

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        50
        In practice, to what extent can citizens easily access the financial information of all political parties and individual candidates?More about indicator

        The Election Commission of India (ECI) has placed political finance reports submitted to it by political parties and candidates on the websites of the ECI and the SECs. Political Parties Yearly Contribution Reports, Annual Audit Reports and Expenditure Statements are placed in the public domain by the ECI on its website. As of 6 June 2014, ECI has made it necessary for contribution reports of Electoral Trusts registered with the government to submit an Annual Report of contributions to the ECI in a format prescribed for the purpose. Political parties are also required to submit a "Statement of Election Expenditure" for each election to the Lok Sabha and State Assemblies to the ECI within 90 days of the Lok Sabha elections and 75 days of the State Assembly elections. These expenditure statements for the 2014 general elections are not yet available on the ECI websites as the elections were completed on 16 May 2014. Political parties have not yet complied with the decision of the Central Information Commission (CIC) to proactively publish disclosures about their internal functioning. Election expenditure reports of candidates comprising of the day to day account of election expenses Register and the abstract statement showing details of expenditure are displayed on the websites of the State Election Commissions (SEC) from where the candidate is contesting the elections. The SEC websites have put up expenditure statements of candidates from the 2014 general elections and Assembly Elections held in certain states simultaneously.

        However, this information is in the form of scans from hard copies filed with the ECI that are either in pdf or image formats. Further, the candidates and parties do not submit all the information required by the format and the information is therefore, incomplete The absence of a publicly available database and incomplete information makes it difficult for anyone trying to analyse the information. The ECI itself has not analysed the information it has and made the large volume of information it collects and generates available to the public in an useful manner.

        According to Barun Mitra, Director, Liberty Institute - Empowering India, "There is a lot of data on ECI website. But this data is not presented in an accessible format that can be easily analyzed. The data is put out in pdf or image files and it takes a lot of effort and expense for anyone to digitize this data. ECI with immense resources at its disposal has not maintained a comprehensive database relating to elections that it has conducted since the first elections in 1951 or at least has not shared its database with the public, except in pdf or image formats. All political financing information received by the ECI is uploaded by scanning hard copies without any effort to digitize the data. Candidates and parties are required to maintain detailed election expenditure returns, but this information is placed in the public domain in image format. ECI also maintains ‘shadow registers’ of election expenditure for each candidate, but even that is not put up in the public domain so that it can be compared with what has been filed by the candidates and parties. By dumping vast amounts of information on its websites and those of the SECs in inaccessible formats, ECI makes it difficult for the civil society or even opponent candidates and the voter from making any fruitful use of the information. What could be more ludicrous than the ECI claiming on the basis of reports filed by candidates that it has managed to contain expenditure limits, when it is an open secret that no serious contender in the elections could have spent within limits. This could well be verified if all the information the the ECI has was transparently made available to the public."


        Peer Reviewer comment: Agree. One needs to keep in mind that the financial information available is highly incomplete because of a likely huge underdeclaration and because of the Rs. 20,000 floor below which donors and amounts are not identified.

        Scoring Criteria

        A 100 score is earned where: 1) all relevant financial information is freely available online, 2) it can be obtained digitally within two days of requesting it, and 3) it is in a machine readable format (for example in csv or xml format).

        A 50 score is earned where: 1) information is available but in some cases is incomplete or lacking detail, 2) obtaining complete information takes up to a month, or 3) it's not necessarily digital or in machine readable format.

        A 0 score is earned where: 1) the information is not publicly available, or 2) obtaining it takes more than three months, or 3) the cost of obtaining it is prohibitive for the regular citizen.

        Sources
        1. Election Commission of India, Political Parties Yearly Contribution Reports, http://eci.nic.in/eci_main1/PolPar/YearlyContributionReports.aspx

        2. Sample Political Party Contribution Report, Biju Swabhiman Dal, Odisha, 2013-14. http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR_2014/Biju%20Swabhiman%20Dal,%20Odisha,%202013-14.pdf

        3. Election Commission of India, Political Parties Expenditure Reports, http://eci.nic.in/ecimain1/PolPar/politicalpartiesExpenditurereport_CGMPMZRJDL2013.aspx

        4. Sample Political Party Expenditure Report, Bahujan Samaj Party, 2013 http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR_2013/Bahujan%20Samaj%20Party2013.pdf

        5. Election Commission of India, Political Parties Annual Audit Reports http://eci.nic.in/eci_main1/PolPar/annualauditreport2013.aspx

        6. Sample Political Party Annual Audit Report, Nationalist Congress Party, 2012-13 http://eci.nic.in/ecimain/mis-PoliticalParties/AAR2013/Nationalist%20Congress%20Party12-13.pdf

        7. Chief Electoral Officer, Delhi, Candidates Election Expenditure Abstract Statement for General Elections to Lok Sabha 2014 http://ceodelhi.gov.in/OnlineErms/ShowDaytoDayElectionExpendeture1.aspx

        8. Sample Candidate Election Expenditure Report, Lok Sabha 2014, Candidate from West Delhi Constituency http://ceodelhi.gov.in/PDFFolder2/621_LS.pdf

        9. Central Information Commission order dated 3rd June 2013 in Subhash Chandra Aggarwal and Anil Bairwal vs Indian National Congress & others [File No. CIC/SM/C/2011/001386 & File No. CIC/SM/C/2011/000838] http://www.rti.india.gov.in/cicdecisions/CICSMC2011000838M_111223.pdf;

        10. Interview with Barun Mitra, Director, Liberty Institute - Empowering India, Date of Interview: 20 September 2014 Liberty Institute - www.InDefenceofLiberty.org; Empowering India - www.EmpoweringIndia.org

        Reviewer's sources: 1. See "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131] and E. Sridharan, "Reforming Campaign Finance to Tackle Corruption in India", in Samuel Paul, ed., Fighting Corruption: The Way Forward. New Delhi: Academic Foundation, 2013, 43-70, for details on modes of party fund-raising based on interviews with parties, donors and bureaucrats in the know and on only partial declaration of receipts including supporting ADR data that show that the bulk of incomes of most parties are declared to be in the under-Rs.20.000 per donation category.
        2. Interview with a senior ECI official, Nov. 5, 2014, for support for under-declared party incomes and under-declared expenditures.

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        50
        In practice, to what extent is financial information published in a standardized format?More about indicator

        Standardized forms have been prescribed under specific laws or instructions by the Election Commission of India (ECI) in respect of all types of financial information required to be submitted to the ECI by political parties and candidates.

        POLITICAL PARTIES 1. Annual financial reports in Form 24A (prescribed under Rule 85B of Conduct of Elections Rules 1961); 2. Annual Report of Contributions received by Electoral Trusts registered with the government in format prescribed in ECI's letter dated 6 June 2014; 3. Statement of Election Expenditure of Political Parties for each election to the Lok Sabha and State Assemblies in format prescribed by letter dated 21 January 2013.

        In an analysis of Total Income of National Parties between financial years 2004-05 and 2011-12, National Election Watch & Association for Democratic Reforms recommended that no part of the Form 24A submitted by political parties providing details of donations above Rs 20,000 should be blank on the lines of the directions of the Supreme Court of India of 13 September 2013 that no part of a candidate’s affidavit on criminal cases and asset declaration filed along with the nomination forms should be left blank.

        An analysis of contribution reports of major parties, like the Biju Janata Dal, Trinamool Congress and Anna Dravida Munnetra Kazhagam, shows 'NIL' receipts of amounts in excess of Rs. 20000/- ($ 333).

        As an example of missing information, in the contribution report of Dravida Munnetra Kazhagam necessary columns related to PAN no. has not been provided.

        CANDIDATES 1. Election expenditure reports comprising a Register of day-to-day account, an abstract statement showing the details of expenditure and an affidavit by the candidate has to be submitted to the District Election Officer (DEO) within 30 days from the date of declaration of result of election. The format for this report has been prescribed at Appendix XXXI-A of the Candidates Handbook.

        In an analysis of Election Expenditure Statements of MPs from 2014 Lok Sabha Elections, National Election Watch & Association for Democratic Reforms recommended that candidates should not be allowed to keep any field blank on the Abstract Election Expenditure statement. The statements must be filled in a legible format and overwriting of amounts in the statement should be discouraged.

        According to Barun Mitra, Director of Liberty Institute-Empowering India, New Delhi, "The data on ECI website is presented in an accessible format that cannot be easily analyzed. The reports filed by candidates and parties are put out in pdf or image files by scanning hard copies and it takes a lot of effort and expense for anyone to digitize this data. The ECI maintains ‘shadow registers’ of election expenditure for each candidate, but that is not put up in the public domain so that it can be compared with what has been filed by the candidates and parties. Even assuming the information submitted by the candidates and parties are complete as per the standardised format (which they are not), making it available in such inaccessible formats to the public does not serve the purpose of informing the public in any useful manner. Even assuming that the ECI does not have the capacity of verifying the information submitted to it, it can at least make it available to the public in an user-friendly manner, it might encourage active citizens to compare and analyse data and ECI could follow up with proper investigations. If couple of leads can be pursued with vigour, then it could have a deterrent impact on violators of the law."


        Peer Reviewer comment: Agree. While the required party and candidate reports are in a standardised format and are subject to disclosure it would be useful for the ECI's shadow registers of candidate expenditures to be also available to the public or to NGO's like NEW or ADR to compare with the official returns and analyse, particularly given the former CEC Quraishi's statement that it was estimated that actual expenditures by winning candidates in 2009 were Rs. 5-10 crores as against an official ceiling five years later in 2014, of only Rs.70 lakhs. Clearly, there is a huge degree of underdeclaration of actual expenditures and derivatively, of actual party incomes going on in a systematic way.

        Scoring Criteria

        A 100 score is earned where financial information for all political parties and individual candidates is available to the public in a standardized format.

        A 50 score is earned where only part of the information is published in a standardized format. A 50 score is also earned where the information is standardized, but it doesn't cover all political parties and individual candidates.

        A 0 score is earned where financial information is not available in a standardized format.

        Sources
        1. Conduct of Elections Rules 1961, Rule 85B and Form 24A and Rule 90,1961 http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        2. Election Commission of India, Candidate Handbook 2014, APPENDIX-XXXI-A - REGISTER FOR MAINTENANCE OF DAY TO DAY ACCOUNTS OF ELECTION EXPENDITURE BY CONTESTING CANDIDATES; pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

        3. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS%2021012013.pdf

        4. Election Commission of India, No.56/Electoral Trusts/2014/PPEMS, dated 6 June 2014, Guidelines for submission of contribution reports of the Electoral Trusts http://eci.nic.in/ecimain1/PolPar/ElectoralTrust06062014.pdf

        5. Election Commission of India, No. 116/Disq/2014-CEMS-I, dated 5 March 2014, Disqualification of candidates under Section 10A of the Representation of People Act, 1951 http://eci.nic.in/eci_main/ElectoralLaws/DisqualifiedPersons06032014.pdf

        6. Sample reports of Candidate's election expenditure -

        Case of KECHELA RANGA REDDY of Mahabubabad constituency in Andhra Pradesh for Lok Sabha Elections 2009 http://ceoandhra.nic.in/ContestingCandidatesExpenditures_PC.htm

        Case of ASHOK SHANKARRAO CHAVAN, returned candidate to the Maharashtra Legislative Assembly 2009: http://103.23.150.75/pdff/Chavana.pdf (p.5 of pdf)

        1. Analysis of Total Income of National Parties between FY 2004-05 and 2011-12, A report by National Election Watch & Association for Democratic Reforms, 4 February 2013 http://adrindia.org/research-and-report/political-party-watch/combined-reports/analysis-total-income-national-parties-be

        2. Analysis of Election Expenditure Statements of MPs from 2014 Lok Sabha Elections, A report by National Election Watch & Association for Democratic Reforms, 1 August, 2014 http://adrindia.org/research-and-report/election-watch/lok-sabha/2014/analysis-election-expenditure-statements-mps-2014-

        3. Sample reports of Political Party contributions - All India Anna Dravida Munnetra Kazhagam 2012-13 http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR2013/All%20India%20Anna%20Dravida%20Munnetra%20Kazhagam.pdf Trinamool Congress http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR2013/All%20India%20Trinamool%20Congress.pdf

        Biju Janata Dal http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR2013/Biju%20Janata%20Dal.pdf Dravida Munnetra Kazhagam http://eci.nic.in/ecimain/mis-PoliticalParties/ContributionReports/CR2013/Dravida%20Munnetra%20Kazhagam.pdf

        1. Interview with Barun Mitra, Director, Liberty Institute - Empowering India, Date of Interview: 20 September 2014 Liberty Institute - www.InDefenceofLiberty.org Empowering India - www.EmpoweringIndia.org

        Reviewer's sources: 1. See "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131] and E. Sridharan, "Reforming Campaign Finance to Tackle Corruption in India", in Samuel Paul, ed., Fighting Corruption: The Way Forward. New Delhi: Academic Foundation, 2013, 43-70, for details on modes of party fund-raising based on interviews with parties, donors and bureaucrats in the know and on only partial declaration of receipts including supporting ADR data that show that the bulk of incomes of most parties are declared to be in the under-Rs.20.000 per donation category.
        2. Interview with a senior ECI official, Nov. 5, 2014, for support for under-declared party incomes and expenditures.
        3. Former CEC Quraishi quoted in Sarika Malhotra, “Economy vs Democracy”, Business Today April 27, 2014 (http://businesstoday.intoday.in/story/lok-sabha-election-2014-campaign-trends-new-govt-challenges/1/204871.html) accessed on November 16, 2014.

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        25
        In practice, to what extent do mainstream journalism media outlets use political finance data in their reporting?More about indicator

        Coverage of political financing information has been very limited. Most of the focus is on asset disclosure data. The information put out in the media relating to violations of election finance norms and candidate information came from press releases / actions of the ECI. Candidate data dealt with their winnability and to a lesser extent on criminal cases against them and their asset declarations. There was little original investigative stories on political party / candidate financing violations.

        Elections were widely covered in the mainstream mediain the 2014 general elections. Social media too was used actively by candidates and political parties. There were dedicated pages, webpages on elections and search engines like Google and Yahoo also had special coverage including news and data from the media, civil society organizations, and the Election Commission of India (ECI).

        Most analyst believe that "Paid news" (advertisements put out by candidates in newspapers passed off as news) had a major role in misleading and exerting undue influence on voters despite the ECI's media monitoring. It has also been alleged that parties like the Bharatiya Janata Party (BJP) by the sheer size of their advertising budget, could manage media houses directly. Television channels and newspaper editors were pressurized through media owners and some of them acted as propaganda vehicles such that it became hard to tell what was being put out was journalism or soft propaganda. Some editors-proprietors were even given tickets to contest the elections by political parties.

        According to Rajdeep Sardesai, senior journalist, "It is true that private media air time was monopolized by the BJP on important voting days, e.g. the first day of elections that coincided with the release of the BJP's election manifesto. During first week of March-first week of May, 30% airtime was spent covering BJP's Prime Ministerial candidate, Narendra Modi. At the end of day, paid news is a menace and puts a limit to abilites of newspapers to report fairly and honestly. Having said that, a section of media has been more vigilant than they were 5-10 years ago. CNN-IBN and some other media houses have covered candidate information and election data analyzed by civil society organizations like Association for Democratic Reforms and also the ECI. In fact, the reporting was better than in the previous elections."

        Dr. Jayaprakash Narayan, President of the Lok Satta Party which contested the 2014 Lok Sabha elections, says "Since 2009, paid news is a phenomenal and perverse practice. The media has become part of the problem. Candidates have to enter into package deals with newspapers just so that the media doesn't black them out of the news. Even where there is a declared pricing, newspapers want to be paid in black. Media failed to do what is the right thing - failed to do deeper analysis and understanding of issues, trivialized issues and have therefore, failed in their ability to persuade the public."

        Dr. Jayaprakash Narayan further said with regard to the asset declaration mandated for candidates, "As an author of this law, since Lok Satta had filed the first public interest litigation in the Supreme Court and led the movement in the country demanding asset declarations, I am not happy with the way the media and the civil society is responding. It is a nitpicking kind of response which is counterproductive. The purpose of the asset declarations is not the disclosed asset, but the undisclosed assets. A person who leads a lavish lifestyle and discloses paltry assets is the problem, not someone who has legitimately made his money and paid his taxes. The current discourse makes out that having money itself is sinful, not whether the money is illegitimate money or through corruption. The analyses which is done is clerical. Reputation of a candidate is generally well known, whether he is corrupt or not. If we are not able to do a minimum of credible research and come up with some benami assets and put pressure on the system, then this is no discourse."


        Peer reviewer comment: Agree. Several outlets have published candidate asset information that is to be mandatorily disclosed, including, I can remember, the Hindustan Times. This is because candidate asset declarations are within the campaign period and topical, while expenditure statements of candidates and parties come after the results when public and media attention has moved on to the new government that is formed. Likewise, party information pertains to the previous year or earlier years whereas every campaign involved huge new amounts of money raised and spent just before and during a campaign, which is completely opaque at the time of the campaign coverage. Hence, there is relatively little coverage of political finance issues in the Indian media. However, impressionisticallly speaking, there was much more such coverage in 2014 than in 2009 which was still in an era of near-total non-transparency of party finances.

        Scoring Criteria

        A 100 score is earned where at least three independent mainstream journalism media outlets have used officially published political party or individual candidate financial information as part of their reporting.

        A 50 score is earned where one independent mainstream journalism media outlet has used officially published financial information as part of its reporting.

        A 0 score is earned where no mainstream journalism media outlet has used officially published financial information as part of its reporting.

        Sources
        1. "Ashok Chavan paid news case: EC frames five-point charges", Press Trust of India, 30 May 2014 http://ibnlive.in.com/news/ashok-chavan-paid-news-case-ec-frames-fivepoint-charges/475555-37-64.html

        2. "Election Commission puts paid news in perspective", by Smitha Nair, CNN-IBN, 25 March 2014 http://ibnlive.in.com/news/election-commission-puts-paid-news-in-perspective/460107-81.html

        3. "2009 polls: Comparison of poll expenses of parties and their MPs", IBNLive.com, 25 March 2014 http://ibnlive.in.com/news/2009-polls-comparison-of-poll-expenses-of-parties-and-their-mps/460143-81.html

        4. How political parties have a well-oiled system of hiring aircraft during elections Binoy Prabhakar, ET Bureau, 23 March 2014 http://articles.economictimes.indiatimes.com/2014-03-23/news/484915471air-india-narendra-modi-aircraft

        5. Election violation cases against DMK, IJK candidate, The Hindu, 27 March 2014 http://www.thehindu.com/news/cities/Tiruchirapalli/election-violation-cases-against-dmk-ijk-candidates/article5838507.ece

        6. Interview with Rajdeep Sardesai, Senior Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        7. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        8. "Channels and editors were arm twisted", Interview with Yogendra Yadav, Aam Aadmi Party leader and political analyst, published in The Hoot, 27 June 2014, http://www.thehoot.org/web/-Channels-and-editors-were-arm-twisted-/7600-1-1-19-true.html

        9. "How candidates cook books to spend crores over Election Commission limit", The Times of India, 11 April 2014, http://timesofindia.indiatimes.com/news/How-candidates-cook-books-to-spend-crores-over-Election-Commission-limit/articleshow/33577943.cms

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        In practice, to what extent were there no news reports or other documented incidents of violation or abuse of political finance laws?More about indicator

        There were several news reports on violations (more than three). These violations ranged from unreported “paid news”, transportation received from third parties, cash / kind seizures intended to bribe voters, putting up dummy candidates to deflect election expenditure limits, etc. Sources cited refer to violation of candidate election expenditure limits by not reporting “paid news” (No.1), by not reporting transportation costs in the election expenses (No. 4), illegal use of vehicles for campaigning.

        The media is said to have swung the 2014 general elections. The criticism was that the manner in which the media covered the elections had favored one party which eventually won the elections with a huge majority of seats. Most analyst believe that "Paid news" (advertisements put out by candidates in newspapers passed off as news) had a major role in misleading and exerting undue influence on voters despite the ECI media monitoring. It has also been alleged that parties like the Bharatiya Janata Party (BJP) by the sheer size of their advertising budget, could manage media houses directly. Television channels and newspaper editors were pressurized through media owners and some of them acted as propaganda vehicles such that it became hard to tell what was being put out was journalism or soft propaganda. Some editors-proprietors were even given tickets to contest by parties.

        Elections were widely covered in the mainstream and vernacular media as well as social media and search engines like Google and Yahoo which had special coverage including news and data from the media, civil society organizations, and the ECI. Coverage of political financing information has however, been limited. The information put out in the media relating to violations of election finance norms and candidate information came from press releases / actions of the Election Commission of India (ECI). Candidate data dealt with their winnability and to a lesser extent on criminal charges against them and their asset declarations. There was little original investigative stories on political party and candidate financing violations.

        According to Rajdeep Sardesai, senior journalist, "At the end of day, paid news is a menace and puts a limit to abilites of newspapers to report fairly and honestly. Having said that, a section of media has been more vigilant than they were 5-10 years ago. CNN-IBN and some other media houses have covered candidate information and election data analyzed by civil society organizations like Association for Democratic Reforms and also the ECI. In fact, the reporting was better than in the previous elections."

        Dr. Jayaprakash Narayan, President of the Lok Satta Party which contested the 2014 Lok Sabha elections, says "Since 2009, paid news is a phenomenal and perverse practice. The media has become part of the problem. Candidates have to enter into package deals with newspapers just so that the media doesn't black them out of the news. Even where there is a declared pricing, newspapers want the money in black. Media failed to do what is the right thing - failed to provide deeper analysis and understanding of issues, trivialized issues and have therefore, failed in their ability to persuade the public."

        Scoring Criteria

        A 100 score is earned where there were no news reports or other documented incidents of violation or abuse of political finance laws during the most recent national election.

        A 50 score is earned where there were news reports or other documented incidents of no more than two cases of violation or abuse of political finance laws during the most recent national election.

        A 0 score is earned where there were frequent news reports or other documented incidents of violation or abuse of political finance laws during the most recent national election.

        Sources
        1. "Ashok Chavan paid news case: EC frames five-point charges", Press Trust of India, 30 May 2014 http://ibnlive.in.com/news/ashok-chavan-paid-news-case-ec-frames-fivepoint-charges/475555-37-64.html

        2. "Election Commission puts paid news in perspective", by Smitha Nair, CNN-IBN, 25 March 2014 http://ibnlive.in.com/news/election-commission-puts-paid-news-in-perspective/460107-81.html

        3. "2009 polls: Comparison of poll expenses of parties and their MPs", IBNLive.com, 25 March 2014 http://ibnlive.in.com/news/2009-polls-comparison-of-poll-expenses-of-parties-and-their-mps/460143-81.html

        4. How political parties have a well-oiled system of hiring aircraft during elections Binoy Prabhakar, ET Bureau, 23 March 2014 http://articles.economictimes.indiatimes.com/2014-03-23/news/484915471air-india-narendra-modi-aircraft

        5. Election violation cases against DMK, IJK candidate, The Hindu, 27 March 2014 http://www.thehindu.com/news/cities/Tiruchirapalli/election-violation-cases-against-dmk-ijk-candidates/article5838507.ece

        6. Interview with Rajdeep Sardesai, Senior Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        7. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        8. "Channels and editors were arm twisted", Interview with Yogendra Yadav, Aam Aadmi Party leader and political analyst, published in The Hoot, 27 June 2014, http://www.thehoot.org/web/-Channels-and-editors-were-arm-twisted-/7600-1-1-19-true.html

        9. "How candidates cook books to spend crores over Election Commission limit", The Times of India, 11 April 2014, http://timesofindia.indiatimes.com/news/How-candidates-cook-books-to-spend-crores-over-Election-Commission-limit/articleshow/33577943.cms

        10. ECI report on illegal cash, liquor, etc. seizures used to bribe voters - Election Commission of India, Search and Seizure Information http://eci.nic.in/ecimain1/GE2014/RptConsolidatedsearchsezuireStatewise%20-%20for%20merge.htm

        11. Use of dummy candidates to deflect election expenditure - "EC declares 7 contestants campaigning for other aspirants in Muzaffarnagar as 'dummy' candidates", Press Trust of India, 30 March 2014 http://ibnlive.in.com/news/ec-declares-7-contestants-campaigning-for-other-aspirants-in-muzaffarnagar-as-dummy-candidates/461341-80.html

        12. On “paid news” - "Model Code violation: 93 complaints registered in Haryana", Press Trust of India, 3 April 2014 http://www.business-standard.com/article/pti-stories/model-code-violation-93-complaints-registered-in-haryana-114040301249_1.html

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        In practice, to what extent were there no news reports or other documented incidents of vote-buying?More about indicator

        Vote buying in India takes the shape of election-eve supply of cash, alcohol, food - dry supplies, cooked food, and increasingly domestic appliances like refrigerators, television, mixer-grinders, clothes, etc. The modus operandi involves cash slipped inside newspapers, supplying liquor, drugs, sometimes through local grocery shops, loan waivers, bribing local leader to ensure vote for one party or not vote, disbursements through local NGOs and self-help groups, fake parties organized and food and gifts distributed, etc.

        While there is some media coverage of vote-buying instances, these mostly report the search and seizure operations of the Election Commission of India (ECI). The news reports in no way reflect the gravity and the proportions of the menace of vote buying that pervades election campaigns. Independent investigative stories on vote-buying are very few. The ECI seized about Rs. 300 crores ($ 50 million) in cash, 16 million litres of alcohol and 17000 kg of drugs during the period of the elections. These seizures are minuscule compared to the illegal freebies distributed during the elections. Apart from reporting on these figures, there media rarely follows up on stories behind these seizures, like the candidates/ parties involved. While anecdotally journalists may have the information, few stories are published.

        According to Dr. Jayaprakash Narayan, President of Lok Satta Party, "80-90 percent of the political funding is unrelated to the campaign. It is about vote-buying. The current political discourse on funding is unproductive." On the role of the media, he said that "Media has failed to do what is the right thing - failed to do a deeper analysis and understanding of issues, has trivialized issues and have therefore, failed in their ability to persuade the public."

        Because of the constraints of paid news on the media, Rajdeep Sardesai, senior journalist, states that "It puts a limit to the abilities of newspapers to report fairly and honestly."

        Scoring Criteria

        A 100 score is earned where there were no news reports or other documented incidents of vote-buying during the most recent national election.

        A 50 score is earned where there were news reports or other documented incidents of no more than two cases of vote-buying during the most recent national election.

        A 0 score is earned where there were frequent news reports or other documented incidents of vote-buying during the most recent national election.

        Sources
        1. "Cash-for-votes in Tamil Nadu Polls", By Vibhuti Agarwal, Wall Street Journal, 9 May 2014 http://blogs.wsj.com/indiarealtime/2014/05/09/cash-for-votes-in-tamil-nadu-polls/

        2. "Rs 29.10 crore worth liquor, Rs 12 crore cash seized in Rajasthan by Election Commission", DNA, 1 December 2013 http://www.dnaindia.com/india/report-rs-2910-crore-worth-liquor-rs-12-crore-cash-seized-in-rajasthan-by-election-commission-1927901

        3. Election violation cases against DMK, IJK candidate, The Hindu, 27 March 2014 http://www.thehindu.com/news/cities/Tiruchirapalli/election-violation-cases-against-dmk-ijk-candidates/article5838507.ece

        4. Election Commission of India, Search and Seizure Information, http://eci.nic.in/ecimain1/GE2014/RptConsolidatedsearchsezuireStatewise%20-%20for%20merge.htm

        5. "Doled out by Gehlot, stopped by Raje", by Sweta Dutta, The Indian Express, 18 August 2014 http://indianexpress.com/article/india/regional-india/doled-out-by-gehlot-stopped-by-raje/99/

        6. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        7. Interview with Rajdeep Sardesai, Senior Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        8. "How candidates cook books to spend crores over Election Commission limit", The Times of India, 11 April 2014, http://timesofindia.indiatimes.com/news/How-candidates-cook-books-to-spend-crores-over-Election-Commission-limit/articleshow/33577943.cms

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        In practice, to what extent do civil society organizations use political finance data?More about indicator

        A few civil society organizations have effectively used official data available on the websites of the Election Commission of India (ECI) and the Chief Electoral Officers of the various States in India. Most of the information refer to voting information, patterns and outcomes. Two civil society organizations like National Election Watch and Association for Democratic Reforms have analyses of official political finance data, including candidate information like asset declaration, criminal record, election expenditures of candidates, and financial information of political parties. Empowering India is an interactive online portal making available similar information for voters to analyze. PRS Legislative Research informs about the performance of elected representatives. Praja is an example of a local initiative in Mumbai which provides information on candidates standing for elections as local body representatives and follows their performance once elected.

        Newspapers and television channels have used the data/ information generated by these civil society initiatives. Rajdeep Sardesai, Senior Journalist said that "CNN-IBN and some other media houses have covered candidate information and election data analyzed by civil society organizations like Association for Democratic Reforms and also the ECI."

        Dr. Jayaprakash Narayan, President of Lok Satta Party, believes that, "The civil society's role in effectively using political finance data has been very little. They think they are the surrogates of the EC and that the EC can do no wrong. In general, the analysis put out by the civil society was very superficial and casual. The general impression created was that the politicians are all bad, they are evil and have joined hands in looting the masses."

        Barun Mitra, Director, Liberty Institute-Empowering India, says that "There is a huge perception gap between the official data and what the general public believes. The public perception is that the campaign finance data submitted by the candidates, or the income tax returns and donors list submitted by political parties are not the true reflection of the real situation. Civil society does not have the capacity to undertake investigations to determine the validity of the election expenditure statements and contribution reports of candidates and political parties. The Election Commission itself has failed to verify the election expenditures, since with rigorous attempts to monitor campaigns and create shadow accounts for each candidate, much of the campaign related expenditure has gone underground. In fact, one of the key objectives of digitising candidate's affidavits at Empowering India, has been to stimulate voters at a local level to try and scrutinise some of the assets, particularly real estate, related data."

        Dr. Jayaprakash Narayan further said with regard to the asset declaration mandated for candidates, "As an author of this law, since Lok Satta had filed the first public interest litigation in the Supreme Court and led the movement in the country demanding asset declarations, I am not happy with the way the media and the civil society is responding. It is a nitpicking kind of response which is counterproductive. The purpose of the asset declarations is not the disclosed asset, but the undisclosed assets. A person who leads a lavish lifestyle and discloses paltry assets is the problem, not someone who has legitimately made his money and paid his taxes. The current discourse makes out that having money itself is sinful, not whether the money is illegitimate money or through corruption. The analyses which is done is clerical. Reputation of a candidate is generally well known, whether he is corrupt or not. If we are not able to do a minimum of credible research and come up with some benami assets or unreported assets and put pressure on the system, then this is no discourse."

        Since it is hard to find direct proof of illegal sources of political funding, some activists believe that the quantum of jump in assets or the nature of acquisitions, may indicate or provoke enquiries into source and purpose for which these assets were acquired. In one case, a party leader and chief minister of the state of Uttar Pradesh, had a case registered against her for disproportionate assets. In her defence she mentioned that she had been given personal gifts of cash of small denominations by her supporters which she used for her party. Though this example is from 2010, it is still pertienent today.


        Peer Reviewer comment: Agree. Very few civil society organisations have used published political finance data on parties or candidates; however, there are at least two which have done so frequently and systematically - ADR and NEW, with ADR using data on both parties income and expenditure and candidates assets.

        Scoring Criteria

        A 100 score is earned where at least three civil society organizations have used officially published political party or individual candidate financial information as part of their advocacy or awareness work.

        A 50 score is earned where one civil society organization has used officially published financial information as part of its advocacy or awareness work.

        A 0 score is earned where no civil society organization has used officially published financial information as part of its work.

        Sources
        1. Election Commission of India http://eci.nic.in/eci_main1/GE2014/ge.html

        2. Chief Electoral Officers of States http://eci.nic.in/eci_main1/Links.aspx

        3. National Election Watch http://myneta.info

        4. Association for Democratic Reforms http://adrindia.org

        5. Empowering India http://www.empoweringindia.org

        6. PRS Legislative Research http://www.prsindia.org

        7. Mera Neta https://www.youtube.com/user/meracandidate

        8. Praja http://www.praja.org

        9. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        10. Interview with Rajdeep Sardesai, Senior Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        11. Interview with Barun Mitra, Director, Liberty Institute - Empowering India, Date of Interview: 20 August 2014 Liberty Institute - www.InDefenceofLiberty.org Empowering India - www.EmpoweringIndia.org

        12. "How to net a Neta", The Telegraph, by Manjula Sen, 10 March 2013 http://www.telegraphindia.com/1130310/jsp/7days/story16654205.jsp#.UQ7fFZQW2y

        13. Additional Source: "Defiant Mayawati felicitated with another cash garland", March 17, 2010, http://timesofindia.indiatimes.com/india/Defiant-Mayawati-felicitated-with-another-cash-garland/articleshow/5693422.cms?referral=PM

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        Open Question: Have there been political finance legal reforms or reform bills presented to the legislature in the last 10 years?More about indicator

        No legal reform legislation on political finance has reached the Parliament in the last 10 years. Various aspects of political finance reforms have been part of government committee reports in the last two decades or more: (1) Goswami Committee on Electoral Reforms (1990); (2) Vohra Committee Report (1993); (3) Indrajit Gupta Committee on State Funding of Elections (1998); (4) Law Commission Report on Reform of the Electoral Laws (1999); (5) National Commission to Review the Working of the Constitution (2001); (6) Election Commission of India – Proposed Electoral Reforms (2004); (7) The Second Administrative Reforms Commission (2008); (8) Law Commission Report on Electoral Disqualifications (2014).

        The last major amendment to election related laws happened in 2003 when political parties were permitted to accept donations which were tax exempt, given partial subsidy allocating airtime to recognized parties, free supplies of electoral rolls, etc. and pursuant to a Supreme Court of India direction, candidates were required to file a statement giving (i) information relating to all pending cases in which cognizance has been taken by a Court, (ii) assets and liabilities, and (iii) educational qualifications, on affidavit, at the time of filing his/ her nominations.

        The Election Commission of India (ECI) has also been sending its reforms proposals to the government since 2004 (compiled in the Background Paper on Electoral Reforms, National and Regional Consultation on Electoral Reforms, attached). These reform proposals covered independence of ECI, measures to clean up the political process and bring transparency into the functioning of political parties.

        In 2010, the Law Ministry started nationwide consultations on electoral reforms sponsored by the ECI. The consultations have not resulted in any final outcomes/ proposals. A draft Points to Ponder was arrived at in 2011 from ideas generated at the regional consultations.

        In 2013, the Law Commission of India was requested by the government for comprehensive electoral reforms proposals and a consultation paper was circulated. This has so far resulted in the Law Commission's 244th report (2014) on Electoral Disqualification relating to the effect of conviction on candidates and filing false affidavits, as a result of the Supreme Court of India requesting the Law Commission to look into these issues early.

        According to an expert source who requested anonymity, urgent reforms are needed to make the electoral process clean and transparent which must include - (1) Auditing of contribution reports of political parties by auditors from a panel approved by the Comptroller and Auditor-General of India (C&AG) and the ECI; (2) Banning of cash transactions for amounts above Rs. 20000 ($ 333); (3) making all electoral offenses cognisable to allow EC officials to conduct searches, seizures and arrests without requiring the permission of a Magistrate; (4) Increasing the frequency of disclosures of financial reports of political parties rather than the annual reports submitted now and during election period, parties must submit their financial reports on a weekly basis; (5) Imposing heavy pecuniary penalties for political finance regulation violations. Disqualification of candidates or de-registration/ de-recognition of political parties are difficult to enforce and should be used as an ultimate weapon.

        T.S. Krishna Murthy, Former Chief Election Commissioner of India, said that "There is urgent need for an absolute change in the law relating to donations. Corporates / Individuals / Institutions should be allowed to donate only to a newly setup National Election Fund which will qualify for 100% tax exemption. No political party should be allowed to get donations except from Members of the Party. Even here, there should be ceiling for Members' donations as is prevalent in Canada. This Fund should be administered by the EC supported by guidelines framed in consultations with all State/National Parties.The Fund will be allocated to all candidates and no candidate can spend from funds other than allocated.This will ensure a level playing field among all contesting candidates and they will be required to render accounts for the contribution. As far as possible, funding in such cases should be maximum in kind to prevent misuse.The second advantage is that this method will snap the obnoxious incestuous relationship between political parties and the corporates/individuals as is in vogue now."

        Civil society has been campaigning for clean politics and driving discussions in this regard. A lot of discussions have revolved around expenditure limits and political party transparency issues.

        Dr. Jayaprakash Narayan, President of Lok Satta Party, said that, "When most people discuss campaign finance reforms in India, they are trying to solve an American problem in India. It will not be solved with public funding, or with just changing the law. India's problem is an incentives problem. If you buy the vote you have a chance to get elected, if you don't buy the vote you don't have a chance to get elected. Once you get elected by buying votes, you have a chance to recover the money in multiples in the system that is existing now. This can be altered only by an electoral system change, if we can go in for some kind of proportional representation model. There are problems here too and needs some safeguards, but the incentive to buy votes is significantly reduced. Our system now is all or none system. Even if I get one vote more than my rival, I win the elections. From the people's perspective, there is no incentive to vote for an honest candidate if they perceive such a candidate has no chance of winning. Political parties which are seriously in pursuit of power as opposed to our party, the Lok Satta Party, which is a reform party making a statement more than pursuing power, can't afford to make a political statement and lose power. This incentive problem is a combination of abject poverty, phenomenal illiteracy, a lack of sense of citizenship, and corruption because of the political and economic models that we have adopted. Despite laws, the election model that we see today has come to be a dominant model and we must understand that it is so because there is an equilibrium around this model. The kind of people who are capable of governing the country effectively and honestly are increasingly unelectable and the kind of people who are electable in this system are incapable of governing. We are facing a serious crisis. We could wait another 50 years for our democracy to evolve, or we could act now to bring in a proportional representation model that would serve the purpose of bringing good leadership into politics, offering an alternative agenda to the public, and having come to power, changing the way in which services are delivered and the country is run. Without understanding the deep crisis that we are facing, badmouthing the politicians and parties doesn't help."

        Association for Democratic Reforms in their submission to the government's national consultation on electoral reforms made several recommendations requiring declaration of sources of income by candidates, implementing a ceiling on expenses of political parties during election period, auditing of expenses of political parties by the C&AG, bringing transparency into the appointment of CEC and SEC with a multi-party system that would include the Prime Minister, Leader of the Opposition, the Speaker of the Lok Sabha, Deputy Chairperson of the Rajya Sabha and the Chief Justice, bringing financial transparency in the accounts of political parties by making the Income Tax returns and the contribution reports open for scrutiny by public.

        Barun Mitra, Director, Liberty Institute-Empowering India, says that "It is time to ask if there is any need to have limits on election expenditure, given that election expenditure and political party financial reports and submissions can neither be scrunitinised nor authenticated. Ruling parties frequently lose elections which indicates that just by being able to spend more than their opponents does not ensure electoral success for ruling parties. This also demonstrate that by and large voters are not so easily swayed by vote buying. Secondly, making political donations to parties completely tax exempt has not really ensured transparency and accountability. This is because of the nature of governance institutions. Given that there continues to be enormous discretionary power at the political bureaucratic levels, the political donor and the recipient find this relationship mutually beneficial. It implies that this aspect of political finance cannot be effectively dealt without seriously exploring governance reforms to reduce discretionary powers. "

        Advocate Ranjeev C Dubey, Managing Partner, N South Advocates says that "As a society, our relentless appetite for pointless symbolism has propelled us to create a plethora of laws which we have no intention of implementing. This cultural construct seems set to persist, regardless of the logic of the law under review. As a pragmatist, I take the view that you ought not to cap election expenses unless you are ready to rigorously enforce it. And if you want to enforce it, the caps have to reflect the reality on the ground. The caps then would need to be set very high, if at all. The jury may well still be out on the other issue – do high expenses mean more votes? If they don’t mean more votes, it doesn’t matter where a wealthy man spends his money. Indeed, in a faltering economy, elections could provide a great fiscal stimulus. If they do mean more votes, than a level playing field is better created by helping the underfunded, rather than pauperize every candidate. But if there should be a cap, what is reasonable depends on what you consider appropriate expense. If you want to appeal to a rural community, you have to pay cash to their Pradhan (the village headman). If you want to appeal to the city dwellers, you have to pay a TV channel a lot of money to tell their voters how your prime ministerial candidate is the greatest thing since sliced bread. What influences your electorate: a direct cash hand out, or a cash handout to Times TV? If you take your ethical prejudices out of the equation, the “realistic caps” you impose depend on what it costs you to persuade your voters, or more crudely, your mode of payment!"

        Advocate Dubey further says that "The parallel economy exists for many reasons of which election funding is only one. Mainly, it exists because our democracy (indeed our governance) is not representative, responsive or oriented to serving the customer. Evolving away from the ‘spoils of office’ system will be an uphill task and I suspect better enforcement will be a major factor. We are in the robber baron phase that the USA transitioned. To call it crony capitalism may be an error since industry may own politics! You could ask yourself if the Congress needed to be defeated in the last elections because it resisted raising gas prices sufficiently. The scamming is one part of the story. The judiciary’s stellar role is another. The electronic media and the way it has changed the contours of the battle is perhaps the most fascinating piece of the plot. These historic processes are unexceptional but the drivers have changed since the American experience. Despite the compulsions that drive election funding underground, we are compelled to try and bring it to a surface because this is an inevitable next step in our journey as a democracy. Campaign funding may never turn completely white, because sleaze and grease are inseparable from the human condition, but we must continue to try."

        In their paper "Reforming India’s Party Financing and Election Expenditure Laws", the authors say that flawed political party funding and election expenditure laws drive parties and politicians to misuse the government’s discretionary powers over resource allocation to raise funds for election campaigns and political parties. The paper finds election expenditure limits unreasonably low and that the real cost of running a successful campaign has not kept pace with the rate of inflation. High costs have a tendency to induce illegal fundraising and spending. This despite, two leading parties, the BJP and Congress sources pointed out that higher spending does not necessarily produce victory. The paper suggest that maintaining confidentiality of donations helps avoid reprisals by political parties that might want to penalize the donor for favoring their opponents and that donors generally regarded confidentiality as more important than any tax benefit. Reliance on small sum donors with tax credits, public funding of parties in proportion to the amounts they raise openly from identified small-sum private donors conditional on parties’ adherence to internal democracy, transparency and accountability, or a combination of several such methods tried and successful in other countries, was recommended as reforms.

        On expenditure limits, Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms believes that "We can’t have a situation where there are no spending limits at all. We support a reasonable limit on spending. Contrary to public perception, the spending limits are set by the Government and not by the EC. If they have set the limits, they should stick to them. Even for transparency reasons, desegregated information (spending by political party and candidates) is always better. What the political parties declare to the Income Tax authorities is only a fraction of the funds that they actually have. Even of the amount they declare, about 75% are those received from individuals under the Rs. 20000 limit whose names are not required to be mentioned as per a loophole in the current law."

        The ECI rationale defining the limits is based on the increase in the inflation rate and number of voters and polling booths and also takes into consideration modern methods of campaigning and the demands of political parties. A source however stated that not all stakeholders believe that the limits are low and some smaller parties in fact believe that higher limits encourage more spending. These limits are needed because the ECI has not been able to control the funding sources. So if there are no expenditure limits either, then there would be no level playing field.

        The new government has expressed its desire to bring in political financing reforms to curb money power in elections soon.

        Peer Reviewer comment: Agree. The Current Research is correct except for its omission of the introduction of the Electoral Trusts Scheme 2013. The Finance Act (no. 2) 2009 introduced a set of provisions for the electoral trusts under the Income Tax Act, 1961, and the Scheme was notified in January 2013, following which a number of electoral trusts were set up in the run-up to the 2014 election. The political context for the various suggested political finance reforms of the 1990s and 2000s listed in the Current Research is broadly the following. The liberalisation of the economy after 1991 resulted in the lowering of tariff protection and increased competition for Indian industry resulting in their need to use their retained profits for modernisation for competitiveness, leaving them less resources to fund parties during the 1990s. The CII called for state funding in 1993 and this resulted among other things in the setting up of the Gupta Committee on State Funding. The context was also shaped by the relative frequency of elections (1996, 1998, 1999) and the increased demands on industry for funding. Furthermore, the growth of political competition in an era of minority coalition governments from 1996-2014 led to increasingly competitive elections with no party feeling assured of victory and hence increased spending as a means to assure victory. Along wth these factors was the growth of corruption in general and criminalisation of politics which resulted in civil society, media and court decisions coming together to force a degree of transparency and disclosure in the 2003 ECI notifications to disclose candidate assets, criminal records and educational records, and the 2005 RTI-inspired disclosure, post-2008, of party incomes and expenditures. The various proposals to reform political finance have to be seen in the context of the the above factors taken in their totality over the years. Tax deductibility introduced in 2003 was a measure to compensate the corporate sector for demands placed on it.

        Scoring Criteria

        Please list and describe all documented instances of: 1) political finance reforms, including bills passed, executive orders signed, court rulings and any other legal act that had a direct effect on existent political finance regulation, and 2) all legal reform attempts presented to the legislature even if they were not approved. Please describe the political context that produced the reforms or reform attempts.

        Sources
        1. The Representation of the People Act 1951 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        2. Background Paper on Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, December 2010; (Attachment) http://lawmin.nic.in/legislative/ereforms/ereforms.htm

        3. Points To Ponder-On Electoral Reforms, National and Regional Consultation on Electoral Reforms, Ministry of Law and Justice, 27 April 2011 (Attachment) http://lawmin.nic.in/legislative/ereforms/ereforms.htm

        4. Consultation Paper on Electoral Reforms, 2013 http://lawcommissionofindia.nic.in/archives.htm

        5. Law Commission of India, 244th Report on Electoral Disqualifications, 2014 http://lawcommissionofindia.nic.in/reports/Report244.pdf

        6. Interview with expert source who requested anonymity. August 2014.

        7. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        8. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        9. Association for Democratic Reforms, Recommendations for Electoral & Political Reforms by ADR & NEW, 2011 http://adrindia.org/research-and-reports/recommendations/2011/recommendations-electoral-political-reforms-adr-new

        10. Interview with Barun Mitra, Director, Liberty Institute - Empowering India, Date of Interview: 20 August 2014 Liberty Institute - www.InDefenceofLiberty.org Empowering India - www.EmpoweringIndia.org

        11. Interview with Advocate Ranjeev C Dubey, Managing Partner, N South Advocates [http://www.ranjeevdubey.com/]; Date of interview - 30 July 14.

        12. "Reforming India’s Party Financing and Election Expenditure Laws", M. V. Rajeev Gowda and E. Sridharan, Election Law Journal, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]

        13. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        14. "Measures to curb money and muscle power in elections soon: Ravi Shankar Prasad", The Times of India, 12 August 2014 http://timesofindia.indiatimes.com/india/Measures-to-curb-money-and-muscle-power-in-elections-soon-Ravi-Shankar-Prasad/articleshow/40082673.cms

        Reviewer's sources: 1`. "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]. 2. “Toward State Funding of Elections in India: a Comparative Perspective on Possible Options”, E. Sridharan, JOURNAL OF POLICY REFORM, Vol. 3, No. 3 (October) 1999.
        3. "Committee on State Funding of Elections", Ministry of Law and Justice, 1998. http://lawmin.nic.in/ld/erreports/Indrajit%20Gupta%20Committee%20Report.pdf.
        4. Election Commission of India, "Guidelines on Transparency and Accountability in Party Funds and Election Expenditure" (No. 76/PPEMS/Transparency I 2013). (http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf).

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    Third Party Actors

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      Applicability of the Law to Third-Party Actors
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        NO
        In law, third-party actors (foundations, think tanks, unions, political action committees, etc.) report itemized contributions received and expenditures to an oversight authority and the information is made publicly available.More about indicator

        There are no laws requiring third-party actors to report contributions received and expenditures to any oversight authority and no such information is made publicly available. Several political parties have affiliated unions but their activities are not regulated under the election laws.

        Section 16 of the Trade Unions Act, 1926 makes it possible for a registered Trade Union to constitute a separate fund, from contributions separately levied for or made to that fund, from which payments may be made for the promotion of the civic and political interests of its members. The objects include paying for a candidates election campaign expenses. The relevant provision of the law is follows:

        "16. Constitution of a separate fund for political purposes.-(1) A registered Trade Union may constitute a separate fund, from contributions separately levied for or made to that fund, from which payments may be made, for the promotion of the civic and political interests of its members, in furtherance of any of the objects specified in sub-section (2).

        (2) The objects referred to in sub-section (1) are:--

        (a) the payment of any expenses incurred, either directly or indirectly, by a candidate or prospective candidate for election as a member of any legislative body constituted under the Constitution or of any local authority, before, during, or after the election in connection with his candidature or election; or (b) the holding of any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate; or (c) the maintenance of any person who is a member of any legislative body constituted under the Constitution or of any local authority; or (d) the registration of electors or the election of a candidate for any legislative body constituted under the Constitution or for any local authority; or (e) the holding of political meetings of any kind, or the distribution of political literature or political documents of any kind."

        The Trade Unions Act, 1926 further requires filing of annual audited statements of its income and expenditure to the Registrar of Trade Unions (Section 28) . There is no requirement of filing this statement before the Election Commission.

        Under Sections 77 and 78 of the Representation of the People Act, 1951, candidates are required to keep, either by himself/ herself or by his/ her election agent, a separate and correct account of all expenditure in connection with the election incurred or authorized by him or by his election agent between the date on which he has been nominated and the date of declaration of result of the election, both dates inclusive. Every contesting candidate has also to lodge a true copy of the said account within 30 days from the date of declaration of result of the election, with the District Election Officer. Along with the details of expenditure, the candidate should also report (1) any lump-sum grant received from a political party, any other association / body, any individual by the candidate; (2) maintain a day to day account of election expenses giving the details of the expenditure incurred or authorized by any association/ organization/ body supporting him, in addition to the political party which has set him up, any other political party supporting him, and any other individual supporting him.

        A political party is required to report contributions received in excess of Rs. 20000/- ($333) from any source, except a foreign source or a government company, and this may include third party actors. Some political parties have affiliated trade unions which usually donate to political parties through their collections from members.

        Scoring Criteria

        A YES score is earned where: 1) third-party actors are required to report to the oversight authority itemized contributions received and expenditures related to their support of electoral campaigns, and 2) the information must be publicly available.

        A MODERATE score is earned where third-party actors are required to report itemized contributions received and expenditures related to their support of electoral campaigns, but the information is not required to be publicly available. A MODERATE score is also earned where regulations exist, but only apply to electoral campaigns of one actor (whether political party or individual candidate).

        A NO score is earned where no such law exists.

        Sources
        1. Trade Unions Act, 1926, Section 16, 1926, http://pblabour.gov.in/pdf/actsrules/tradeunionsact1926.pdf

        2. The Representation of the People Act, 1951, Sections 29B, 29C, 77 and 78, 1951, http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf

        3. Election Commission of India, Candidate Handbook 2014, APPENDIX-XXXI-A - REGISTER FOR MAINTENANCE OF DAY TO DAY ACCOUNTS OF ELECTION EXPENDITURE BY CONTESTING CANDIDATES; pp. 346-349 http://eci.nic.in/ecimain1/current/CandidateHandbook201419032014.pdf

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        0
        In practice, to what extent do third-party actors (foundations, think tanks, unions, political action committees, etc.) report itemized contributions received and expenditures to an oversight authority?More about indicator

        There is no legal requirement for third parties to report itemized contributions and expenditure in relation to a political purpose or election campaign to the Election Commission of India or any oversight authority. Several political parties have affiliated unions but their activities are not regulated under the election laws. The Trade Unions Act, 1926 which govern activities of trade unions have to file their audited statement with the Registrar of Trade Unions.

        Scoring Criteria

        A 100 score is earned where all third-party actors report to an oversight authority both itemized contributions received and itemized expenditures.

        A 50 score is earned where third-party actors report to an oversight authority either itemized contributions received or expenditures, but not both. A 50 score is also earned where the reports refer only to one type of third-party actor, but do not cover others.

        A 0 score is earned where third-party actors rarely or never report itemized contributions received or expenditures.

        Sources
        1. Rajdeep Sardesai, Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        2. Prof. Trilochan Sastry, Founder Member, Association for Democratic Reforms, Date of Interview: 20 July 2014 http://adrindia.org/about-adr/founders-and-trustees

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        0
        In practice, to what extent can journalists and citizens easily access the financial information of third party actors, including the political spending of those actors in support of political parties and individual candidates?More about indicator

        There is no legal requirement for third parties to report their financial information in relation to a political purpose or election campaign. Party affiliated trade unions, who do contribute to their parties, report their financials to the Registrar of Trade Unions.

        According to Rajdeep Sardesai, Journalist, says "contributions made and expenditures incurred by third parties are all under the table. We don’t have laws which allow us to monitor third party actors."

        Prof. Trilochan Sastry, Founder Member, Association for Democratic Reforms, says that "There has to be greater transparency of international standards wherever there are corporate, individual and third party donations. If the public has to fund part of the party’s or candidate’s elections, people have the right to know where the private funding is coming from. For instance, third party spending has to be included in the spending of the party or candidate. Law must provide for specific sign off from candidates agreeing to receive the support from the third parties and expenses incurred by third parties must be counted towards the expenditure limit. Otherwise, it is an easy ploy to say that it is not the candidate's expense it is the third party's."

        Scoring Criteria

        A 100 score is earned where: 1) all relevant financial information is freely available online or in hard copy at the cost of photocopying, 2) it can be obtained within two days of requesting it, and 3) it is in a machine readable format (for example in csv or xml format).

        A 50 score is earned where: 1) information is available but in some cases is incomplete or lacking detail, 2) obtaining complete information takes up to a month, or 3) it's not necessarily in machine readable format.

        A 0 score is earned where: 1) the information is not publicly available, or 2) obtaining it takes more than three months, or 3) the cost of obtaining it is prohibitive for the regular citizen.

        Sources
        1. Rajdeep Sardesai, Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        2. Prof. Trilochan Shastri, Founder Member, Association for Democratic Reforms, Date of Interview: 20 July 2014 http://adrindia.org/about-adr/founders-and-trustees

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        --
        Open Question: Please describe how third party-actors (even if they are not regulated by your country's laws) obtain contributions and spend in support of political parties and/or individual candidates.More about indicator

        There are no laws regulating third parties in India. A candidate is required to maintain a day to day account of election expenses giving the details of the expenditure incurred or authorized by any association/ organization/ body supporting him, in addition to the political party which has set him up, any other political party supporting him, and any other individual supporting him. A political party is required to report contributions received in excess of Rs. 20000/- ($ 333) from any source, except a foreign source or a government company, and this may include third party actors. Some political parties have affiliated trade unions which usually donate to political parties through their collections from members.

        Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms, says that "There has to be greater transparency of international standards wherever there are corporate, individual and third party donations. If the public has to fund part of the party’s or candidate’s elections, people have the right to know where the private funding is coming from. For instance, third party spending has to be included in the spending of the party or candidate. Law must provide for specific sign off from candidates agreeing to receive the support from the third parties and expenses incurred by third parties must be counted towards the expenditure limit. Otherwise, it is an easy ploy to say that it is not my expense it is the third parties."

        Rajdeep Sardesai, senior journalist, says "contributions made and expenditures incurred by third parties are all under the table. We don’t have laws which allow us to monitor third party actors."

        Dr. Jayaprakash Narayan, President of Lok Satta Party says, "Earlier the law said the expenditure incurred by the third party does not come under the candidate's expenditure. The law was amended in 2003 and now the law specifically says that expenditure incurred by the third party is the candidate's own expenditure unless he can show that someone unrelated to the candidate without his knowledge has made the expenditure. So expenditure incurred on behalf of the candidate is his own expenditure. But the issue is not whether third party expenditure should be monitored or not. The focus should be on how the money is spent, whether on legal or illegal expenditure."

        It is common knowledge that expenditures, big and small, from lending aircrafts to buying votes, third parties pick up tabs for parties and candidates.


        Peer Reviewer comment: Agree. While it is true that expenditures of parties and candidates are picked up or donated in kind (vehicles, drivers, materials, catering, for example) by donors apart from declared and undeclared donations ostensibly under Rs. 20,000, who are the third party donors other than individuals and corporations? There is a huge layer of medium and small businesses which are not under the Companies Act, and might be partnerships or proprietorships (the largest number of businesses in India) or co-operatives, usually very local in scope, and which could include builders and mine/quarry ownersbesides wholesale and retail traders, but which are important as donors to parties and candidates in cash and kind, which are probably the most important third parties, more so than trade unions or foundation (negligible). As for co-operatives, sugar co-operatives in Maharashtra have historically played an important role in funding the Congress and Nationalist Congress Party in that state. There is no organised information on the donation activities of such actors but these are very susbstantial from earlier interview material with parties, and is largely undeclared, but the loophole of the Rs.20,000 floor allows such donor activity to be concealed or beyond legal objection. The problem is that the law is so structured (the Rs.20,000 floor for anonymous donations and the ECI's inability to fine or deregister violators) that circumvention of the expenditure ceiling in effect becomes easy.

        Scoring Criteria

        To answer this question please: 1) list the types of third-party actors that exist in your country and describe how they work to influence campaigns, 2) explain how important such actors are or not in the context of campaigns, including whether their expenditures are substantial in relation to that of political parties and individual candidates, and 3) if documented evidence indicates they circumvent laws intended to regulate political finance, please explain how and include references to the evidence.

        Sources
        1. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        2. Sample filing of expenditure report by a candidate, http://ceodelhi.gov.in/PDFFolder2/621_LS.pdf

        3. . Interview with Rajdeep Sardesai, Senior Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        4. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        5. How political parties have a well-oiled system of hiring aircraft during elections Binoy Prabhakar, ET Bureau, 23 March 2014 http://articles.economictimes.indiatimes.com/2014-03-23/news/484915471air-india-narendra-modi-aircraft

        6. "How candidates cook books to spend crores over Election Commission limit", The Times of India, 11 April 2014, http://timesofindia.indiatimes.com/news/How-candidates-cook-books-to-spend-crores-over-Election-Commission-limit/articleshow/33577943.cms

        Reviewer's sources: 1. Interview with senior ECI official who requested anonymity, Nov. 5, 2014, and Congress source who requested anonymity, Nov. 5, 2014.

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    Monitoring and Enforcement

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      Monitoring Capabilities
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        YES
        In law, political finance information is monitored by an independent oversight authority.More about indicator

        Election Commission of India (ECI) is a permanent Constitutional Body. The superintendence, direction and control of the process for conduct of elections to the Parliament and Legislature of every State and to the offices of President and Vice-President of India is vested in the ECI by the Constitution of India. In conducting the elections, ECI is insulated from executive interference. The ECI does not however, have law making powers to regulate elections. That vests with the government and the concerned administrative ministry to make election laws is the Ministry of Law and Justice.

        ECI is mandated to conduct free and fair elections by the Constitution. This is a very wide power. There is no law barring the ECI from conducting audit and investigate political finance or authorising an agency to do so on its behalf.

        Section 77 of the Representation of People Act of 1951, read with Rule 90 of the Conduct of Election Rules of 1961, prescribes the maximum expenditure that can be incurred by a candidate and this expenditure has to be accounted for as per procedure. Using its plenary powers under Article 324 of the Constitution of India, the Election Commission of India (ECI) has issued orders/ guidelines for transparency in the election process and requires political parties to furnish annual contribution and audit reports, expenditure statements during elections.

        The ECI issues elaborate instructions on election expenditure monitoring mechanism for candidates during elections. The structure of Election Expenditure Monitoring Mechanism comprises (1) Expenditure Observers (EO) to observe the election expenses by the candidates at least one to a district; (2) Assistant Expenditure Observers assigned to each constituency to assist the EO; (3) Video Surveillance Teams for each Assembly Constituency / Segment to cover sensitive events and big public rallies in the constituency; (4) Video Viewing Team for each Assembly Constituency /Segment; (5) Accounting Teams, at least one for each Assembly Constituency/ Segment to maintain "Shadow Observation Register" and "Folder of Evidence" for each candidate of the Assembly Constituency / Segment; (6) Complaint Monitoring Control Room and Call Centre, a 24X7 Call Centre for the public to inform corrupt practices related to election; (7) Media Certification and Monitoring Committee in each district for certification of advertisements in electronic; (8) Flying Squads under each Assembly Constituency/ Segment for tracking illegal cash transactions or any distribution of liquor or any other items suspected of being used or bribing the voters; (9) Static SurveillanceTeam under each Assembly to man check posts and keep watch on movement of large quantities of cash, illegal liquor, any suspicious item or arms being carried in their area; (10) Expenditure Monitoring Cell responsible for video graphing all public meetings/ rallies political parties/ potential candidates during the period between announcement of election and notification of election and expenditure incurred by political parties as per the video CDs/ DVDs are calculated by this Cell for estimating the expenditure by the political parties.

        The ECI has full access to all the manpower requirements under Article 324 (6) of the Constitution of India and election officials are for the period of elections on deputation to the ECI. This Article states - "(6) The President, or the Governor of a State, shall, when so requested by the Election Commission, make available to the Election Commission or to a Regional Commissioner such staff as may be necessary for the discharge of the functions conferred on the Election Commission by clause (1)."


        Peer reviewer comment: Disagree and recommend a 50. While the ECI has expenditure monitoring and investigation powers during elections, political finance is broader than just election expenditure limited to the election period; outside of this, it does not have monitoring and investigative powers. Also, the accounts of political parties are audited by auditors appointed by them not by the ECI or by the Comptroller and Auditor-General of India.

        Scoring Criteria

        A YES score is earned where: 1) an independent oversight authority is mandated to monitor political finance information, and 2) the authority has investigation and audit powers.

        A MODERATE score is earned where the independent oversight authority is mandated to monitor political finance information, but doesn't have investigation or audit powers.

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of People Act of 1951, Sections 8-A, 10-A, 77, 123, 1951 read with Rule 89, 90 of the Conduct of Election Rules of 1961 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf; http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        2. Election Commission of India, Compendium of Instructions on Election Expenditure Monitoring, January 2014 http://eci.nic.in/ecimain/ElectoralLaws/compendium/compendium201403022014.pdf

        3. Election Commission of India, No. 76/EE/2012/PPEMS, dated 21 January 2013, Statement of Election Expenditure by Political Parties http://eci.nic.in/ecimain/mis-PoliticalParties/Election_Expenses/PPEMS%2021012013.pdf

        4. Constitution of India, Part V-Elections, Article 324(6) http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss(21).pdf

        Reviewer's sources: 1. Interview with senior ECI official, Nov. 5, 2014.

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        NO
        In law, high-level appointments to the oversight authority are based on merit.More about indicator

        Article 324 of the Constitution of India provides for the appointment of the Chief Election Commissioner and any number of Election Commissioners as may be fixed by the President of India. The appointment of the Chief Election Commissioner and other Election Commissioners is made by the President in accordance with law made by the Parliament.

        The manner of appointment of the Election Commissioners in India is opaque. Election Commissioners have mostly been from the Indian Administrative Service, which is a premier civil service, and on fewer occasions from other civil services, like the Indian Revenue Service or from the government legal service. The Commissioners are appointed by the government of the day which recommends the name of a senior officer to the President of India. After the President approves, the Ministry of Law and Justice which is the administrative ministry for the ECI, issues a notification appointing the officer as an Election Commission. The senior-most EC is the Chief Election Commissioner.


        Peer Reviewer comment. Agree. While there is no law mandating merit and a public appointment process, the Commissioners are highly autonomous once appointed.

        Scoring Criteria

        A YES score is earned where: 1) high-level appointments must be based on merit in a public appointment process; and 2) appointees must be free of conflicts of interest due to personal loyalties, family connections, political party affiliations, business partners or other biases.

        A MODERATE score is earned where high-level appointments must be based on merit in a public appointment process, but the regulations don't forbid appointments involving conflicts of interest or other biases.

        A NO score is earned where no such law exists.

        Sources
        1. The Constitution of India, Elections Part XV http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss(21).pdf

        2. The Chief Election Commissioner And Other Election Commissioners (Conditions Of Service) Act, 1991 http://www.indiankanoon.org/doc/1435091/

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        50
        In practice, to what extent are high-level appointments to the oversight authority based on merit?More about indicator

        The manner of appointment of the Election Commissioners (EC) in India is opaque. Election Commissioners have mostly been from the Indian Administrative Service, which is a premier civil service, and on fewer occasions from other civil services, like the Indian Revenue Service or from the government legal service. The appointment of the Chief Election Commissioner and other Election Commissioners is made by the President in accordance with law made by the Parliament. From 1950 to 1989, Election Commission was a single member body, became a two-member body from 1989 to 1990, reverted to single member body till 1993. The Election Commission became a three member Commission from 1993. By convention, the ECs are appointed by the government of the day which recommends the name of a senior officer/ civil servant to the President of India. After the President approves, the Ministry of Law and Justice which is the administrative ministry for the Election Commission of India (ECI), issues a notification appointing the officer as an EC. The senior-most EC is the Chief Election Commissioner.

        No Election Commissioners were appointed in the study period. The last time there was a controversy regarding appointment of a CEC was in 2009. Such controversies are rare and despite the lack of transparency in the selection process (which includes vetting for public office), the officials appointment are otherwise competent.

        While the prospective candidates are senior officials with sufficient experience required for the position, there is no transparent selection process and why a particular officer is chosen over another is not in the public domain. There have been allegations of partisan appointments in the past. In 2009, the opposition parties objected to the appointment of Navin Chawla as the EC and later when he was to become the Chief Election Commissioner (CEC) because of his proximity to ruling party in power. In fact, the outgoing CEC recommended to the President that Navin Chawla should be removed from the position of the EC and not elevated to the position of CEC because of instances of partisan decision making. India was going into parliamentary elections in 2009 and there were concerns that elections with Navin Chawla at the helm would not be free and fair. V.S. Sampath is the current Chief Election Commissioner appointed with effect from 11 June 2012 (he was an Election Commissioner from 21 April 2009). The other two Election Commissioners are H.S. Brahma (appointed with effect from 25 August 2010) and Naseem Zaidi (appointed with effect from 7 August 2012). All these appointees are senior civil servants. However, despite such allegations of partisan appointments, the ECs have conducted themselves with the integrity required of their positions and the outcomes of elections have not been challenged by opposition parties.

        There have been recommendations from opposition parties and civil society for making appointments of Election Commissioners and State Election Commissioners, through a collegium system which should include leaders of opposition parties, judiciary, apart from government representatives.

        Scoring Criteria

        A 100 score is earned where: 1) there is an advertised competition and public vetting process, 2) candidates with the most merit and without conflicts of interest or other biases are appointed.

        A 50 score is earned where the public competition is usually advertised and the vetting process public, but exceptions exist. A 50 score is also earned where candidates with the most merit and without conflicts of interest or other biases are appointed but exceptions exist.

        A 0 score is earned where there's rarely or never a public competition, or appointees are rarely selected on merit or without conflicts of interest or other biases.

        Sources
        1. "Institutional coup" by Praful Bidwai, Frontline, 14-27 February 2009 http://www.frontline.in/static/html/fl2604/stories/20090227260409800.htm

        2. "Fine-tune Election Commissioners appointment procedures: former CEC", The Hindu, 16 February 2009 http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/finetune-election-commissioners-appointment-procedures-former-cec/article355655.ece

        3. "Navin Chawla takes over as CEC on Tue", The Indian Express, 20 April 2009 http://archive.indianexpress.com/news/navin-chawla-takes-over-as-cec-on-tue/449165/

        4. Recommendations on Electoral and Political reforms, National Election Watch (NEW) and Association for Democratic Reforms (ADR), 2011 http://adrindia.org/sites/default/files/reforms%20v4_2.pdf

        5. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

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        MODERATE
        In law, the independence of high-level appointees is guaranteed.More about indicator

        Article 324 of the Constitution of India empowers the Election Commission of India with the superintendence, direction, and control of the preparation of electoral rolls for, and the conduct of, all elections to Parliament and State Legislatures and to the offices of President and Vice-President held under this Constitution.

        Article 324 of the Constitution of India provides for the appointment of the Chief Election Commissioner and any number of Election Commissioners as may be fixed by the President of India. The President of India appoints the Chief Election Commissioner (CEC) and other Election Commissioners (EC) in accordance with law made by the Parliament. From 1950 to 1989, the Election Commission of India (ECI) was a single member body. It became a two-member body from 1989 to 1990, reverted to single member body till 1993. The ECI has been a three member body since 1993.

        The Chief Election Commissioner and Other Election Commissioners (Conditions Of Service) Act, 1991 provides a term of six years for the CEC and EC or till he/ she attains the age of 65 years before the expiry of the six-year term. The CEC and the ECs enjoy the same status and salary as judges of the Supreme Court of India. To insulate the EC from executive interference, the Article 324 of the Constitution provides that the CEC can be removed from office only through impeachment by the Parliament. However, similar protection is not provided for the other ECs who can be removed if the CEC recommends their removal to the government.

        The Supreme Court laid down the law on the government's power to determine the number of ECs in S.S. Dhanoa vs Union of India and others. The court held that the Constitution empowered the government to increase or decrease the numbers of ECs and if the numbers are decreased, the excess posts of ECs stand abolished. The service rules relating to the term of office therefore ceases to have effect and the ECs service stands terminated.

        Article 324 of the Constitution of India provides the ECI with plenary powers under which the ECI can issue orders/ guidelines for a free and fair election process even beyond what is provided by any statute. Under these plenary powers the ECI has enacted Election Symbols (Reservation and Allotment) Order 1968, and issues instructions and guidelines like the Model Code of Conduct, expenditure monitoring guidelines, etc., to ensure integrity of the election process from time to time. The plenary powers of the ECI was endorsed by the Supreme Court of India in Mohinder Singh Gill and another vs Chief Election Commissioner and others that Article 324 vests the whole responsibility of national and state elections in the ECI and if any law made by the Parliament is silent, Article 324 gives the power to the ECI to fill the vacuum.


        Peer Reviewer comment: This is a very tricky question. The Gopalasway vs. Chawla conflict of 2008-09 established, according to the Law Ministry's point-by-point reply to CEC Gopalaswamy's suo motu recommendation to remove Chawla, that the CEC has no suo motu powers to recommend the removal of an EC without reference to and concurrence of the government, and Chawla remained in place and became CEC. However, if the government wishes to remove an EC and the CEC concurs, something that has never cropped up barring the qualitatively different case of abolition of the two additional ECs in 1991 (upheld by the Supreme Court), the independence of the two ECs, whose security of tenure is not similar to that of the CEC which is like that of a Supreme Court judge, comes into question. It is difficult as of now to decide on a score of 100 or 50, Iif it were an option perhaps a 75 would be more accurate representation.

        Scoring Criteria

        A YES score is earned where: 1) appointees have the authority or mandate to review cases and issue decisions, 2) the law establishes security of tenure, and 3) removal or disciplinary actions are based on due process conducted by a peer panel or independent oversight body.

        A MODERATE score is earned where appointees have the authority or mandate to review cases and issue decisions, BUT one of the second two conditions mentioned in the YES criteria is not met.

        A NO score is earned where no such law exists.

        Sources
        1. The Constitution of India, Elections Part XV http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss(21).pdf

        2. The Chief Election Commissioner And Other Election Commissioners (Conditions Of Service) Act, 1991 http://www.indiankanoon.org/doc/1435091/

        3. Election Commission of India, Model Code of Conduct for the Guidance of Political Parties and Candidates, No.437/6/Manifesto/2013, dated 19 February 2014. http://eci.nic.in/ecimain1/current/ci19022014.pdf

        4. Election Symbols (Reservation and Allotment) Order, 1968, http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/PoliticalParty&ElectionSymbolOrder2013Eng.pdf

        5. Supreme Court of India, S.S. Dhanoa v. Union of India and others, (1991) 3 SCC 567, 584. http://indiankanoon.org/doc/852842/

        6. Supreme Court of India, Mohinder Singh Gill v. Chief Election Commissioner, AIR 1978 SC 851. http://indiankanoon.org/doc/1831036/

        Reviewer's sources: 1. Interviews in 2013 and 2014 with three former Chief Election Commissioners who were earlier Election Commissioners before becoming CECs and one former Deputy Election Commissioner for unpublished paper (Sridharan-Vaishnav, 2014).

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        50
        In practice, to what extent is the independence of high-level appointees guaranteed?More about indicator

        The Election Commission of India (ECI) is highly regarded for conducting free and fair elections despite the mammoth proportions of this exercise. During the election period, opposition parties frequently allege partisan behaviour by the ECI over its decisions. But no party has challenged the outcome of any elections. ECI’s orders are generally complied with by the candidates, political parties, governments and officials, sometimes even under protest. ECI does face difficulties in disciplining officers who have misconducted themselves during the elections as the officials are on deputation to the ECI for the duration of the elections and parent departments are unwilling to follow up with disciplinary proceedings once the officials revert to their departments/ governments.

        According to Dr. Jayaprakash Narayan, President of the Lok Satta party, “there is no coercion or manipulation in the election process.”

        The Election Commissioners (EC) have security of tenure as mandated by law. The only time appointments of ECs were terminated was when the government reduced the number of ECs in 1991, a decision which was upheld by the Supreme Court of India when challenged by one of the ousted ECs. In 2009, an attempt was made by the outgoing CEC to remove an EC from his position because of instances of partisan decision making, but the government of the day did not agree with the recommendation of the CEC.

        However, absence of adequate legislative provisions that would allow the ECI legal authority to effectively enforce funding and expenditures by political parties and candidates, limits the independence of the ECI. ECI's approach has been not to get adversarial with political parties but consult with and persuade them to comply with funding/ expenditure guidelines and instructions issued by the ECI. Recently the ECI could issue guidelines on transparency on political funding and expenditure adopting such a strategy. A confrontationist approach could lead to political parties not cooperating during elections which would negatively impact the smooth conduct of elections.


        Peer Reviewer comment: Agree. Part of the reason for the ECI's "persuasion" approach is that similar to the Model Code of Conduct which not a law but an agreed inter-party code, recourse to legal action could drag on for a very long time and would not facilitate the conduct of elections which has to be done day-to-day over a few weeks.

        Scoring Criteria

        A 100 score is earned where all of the following conditions are met: 1) appointees review cases and issue decisions without fear or favor from other branches of government, and 2) appointees are granted security of tenure and 3) no appointees are removed, disciplined or transferred without due process by a peer panel or independent oversight body.

        A 50 score is earned where any of the following conditions apply: 1) appointees generally operate without fear or favor from other branches of government but exceptions exist, or 2) some but not all appointees are granted security of tenure, or 3) appointees are occasionally removed, disciplined or transferred without due process by a peer panel or independent oversight body.

        A 0 score is earned where at least one of the following conditions apply: 1) appointees operate with fear or favor from other branches of government, or 2) are not granted security of tenure, or 3) are usually removed, disciplined or transferred without observing due process by a peer panel or independent oversight body.

        Sources
        1. “Standoff with Election Commission ends as Mamata Banerjee blinks first”, by Sumit Moitra, DNA, 9 April 2014 http://www.dnaindia.com/india/report-standoff-with-election-commission-ends-as-mamata-banerjee-blinks-first-1976481

        2. “How Election Commission makes law return to India during polls” by Mahesh Vijapurkar, firstpost.com, 11 April 2014 http://www.firstpost.com/politics/how-election-commission-makes-law-return-to-india-during-polls-1476461.html

        3. "Why India is so good at organizing elections", The Economist, 6 April 2014 http://www.economist.com/blogs/economist-explains/2014/04/economist-explains-1

        4. “Election Commission rejects BJP’s charge of bias, says not afraid of anyone”, PTI, The Times of India, 8 May 2014 http://timesofindia.indiatimes.com/news/Election-Commission-rejects-BJPs-charge-of-bias-says-not-afraid-of-anyone/articleshow/34838221.cms

        5. “Arun Jaitley on Varanasi rally: Biased EC is pro-Rahul, anti-Modi”, by Arun Jaitley, firstpost.com, 8 May 2014 http://www.firstpost.com/politics/arun-jaitley-on-varanasi-rally-biased-ec-is-pro-rahul-anti-modi-1513907.html

        6. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        7. "Institutional coup" by Praful Bidwai, Frontline, 14-27 February 2009 http://www.frontline.in/static/html/fl2604/stories/20090227260409800.htm

        8. Supreme Court of India, S.S. Dhanoa v. Union of India and others, (1991) 3 SCC 567, 584. http://indiankanoon.org/doc/852842/

        9. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

        10. Interview with expert source who requested anonymity. August 2014.

        Peer Reviewer comment: 1. Interviews in 2013 and 2014 with three former Chief Election Commissioners and one former Deputy Election Commissioner for unpublished paper (Sridharan-Vaishnav, 2014).

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        --
        Open Question: How does decision-making work in the oversight authority?More about indicator

        Under Section 10 of The Chief Election Commissioner And Other Election Commissioners (Conditions Of Service) Act, 1991, the Election Commission (EC) takes decisions unanimously, as far as possible. In case of difference of opinion, the majority view would prevail. All the three ECs including the Chief Election Commissioner, have equal powers and functions.

        "10. Disposal of business by Election Commission. (1) The Election Commission may, by unanimous decision, regulate the procedure for transaction of its business as also allocation of its business amongst the Chief Election Commissioner and other Election Commissioners. (2) Save as provided in sub- section (1), all business of the Election Commission shall, as far as possible, be transacted unanimously. (3) Subject to the provisions of sub- section (2), if the Chief Election Commissioner and other Election Commissioners differ in opinion on any matter, such matter shall be decided according to the opinion of the majority."

        There have been only a few occasions when differences of opinions between ECs have come into the public domain. In 2009, the outgoing CEC recommended to the President that the incumbent CEC, Navin Chawla, should be removed from the position of the EC and not elevated to the position of CEC citing "12 instances" of partisan decision making. In the 2014 General Elections, the CEC felt compelled to give an interview to clarify that there was no difference of opinion among the ECs because of contradictory statements given by another EC on election related decisions taken by the EC.

        T.S. Krishna Murthy, Former Chief Election Commissioner of India, says that "The practice has generally been that all the Members of Election Commission including the Chief Election Commissioner sit together in the presence of senior officials and take decisions collectively. Sometimes depending upon the urgency and availability of the Commissioners, approvals are taken on file by circulation. Very often decisions taken used to be unanimous but if there are differences they are discussed threadbare and and unanimous or near unanimous decisions are arrived at. The law provides that if there are differences, the majority view will prevail. I have no hesitation in stating that the EC has a tradition of high degree of independence. Being human beings, there may be biases in individual thinking but being a three member body, individual biases if any will be ironed out by discussions and majority view."


        Peer Reviewer comment: The key decisions are the timing and time frame of elections, and the monitoring of the conduct of elections, particularly the monitoring of the conduct of parties and candidates and the election administration officials, for adherence to the Model Code and against misuse of the government machinery, and immediate stopping of violations thereof. In this the ECI has been successful in that the losers accept electoral verdicts as fair. The three-member ECI's functioning protocols were worked out and stabilised in the tenure of CEC M. S. Gill till 2001 and this set the template for this successors. The only hiccup was the Gopalaswamy-Chawla conflict of 2008-09 for which see response to Q.41. Apart from this there have been no significant complaints about the functioning of the ECI or any of the ECs.

        Scoring Criteria

        Please describe: 1) the composition of the decision-making body within the oversight authority, 2) the type of decisions it's allowed to make and makes in practice, and 3) in which cases majority is required. If there have been well substantiated complaints about the decision-making process being ineffective or politicized please explain.

        Sources
        1. The Chief Election Commissioner And Other Election Commissioners (Conditions Of Service) Act, 1991, Section 10, 1991 http://www.indiankanoon.org/doc/1435091/

        2. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        3. "CEC rejects differences at the top in the Election Commission", Press Trust of India, 10 May 2014 http://indianexpress.com/article/india/politics/cec-rejects-differences-at-the-top-in-the-election-commission/99/

        4. "Institutional coup" by Praful Bidwai, Frontline, 14-27 February 2009 http://www.frontline.in/static/html/fl2604/stories/20090227260409800.htm

        Reviewer's sources: 1. Interviews in 2013 and 2014 with three former Chief Election Commissioners and one former Deputy Election Commissioner for unpublished paper (Sridharan-Vaishnav, 2014).

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        100
        In practice, to what extent does the authority have sufficient capacity to monitor political finance regulations?More about indicator

        There are no resource constraints in the conduct of elections. The Finance Ministry generally accepts the recommendations of the Election Commission of India (ECI). Administratively, the ECI comes under the Ministry of Law and Justice and election expenditure for Parliamentary elections and elections to Union Territories are reflected in the budget of the Ministry. The State governments provide the budget for elections to the State Legislatures. The Secretariat of the ECI has a separate budget meant to meet its establishment costs and voter awareness schemes. The ECI also raises demands for capital expenditure for equipment, preparation for electoral rolls and Electors' Identity Cards, etc. for which the expenditure is shared equally between the Centre and States.

        The manpower demands of the ECI are also comfortably met comprising polling personnel, police forces, observers, model code violation and expenditure monitoring teams, etc. All the personnel required for conducting elections is deemed to be on deputation to the ECI and is subject to its control, superintendence and discipline during the election period, extending over a period of one and half to two months.

        Figures released by the ECI after the 2014 general elections showed that it was the most expensive Lok Sabha election, entailing a cost of Rs. 3426 crore ($ 567030750) to the national exchequer, a substantial jump of 131% over the cost of the 2009 polls.

        According to a source, the EC has done a good job in the 2014 elections to keep legal expenditure under check and have repeatedly invoked powers of search and seizure that even the law does not permit. The question really is not whether the ECI has the capacity to monitor the reports filed by candidates and political parties, but whether the body has the powers to act on the violations. Huge amount of data is gathered by the ECI by way of political contributions and election expenditure reports by political parties and candidates. But this data is rarely reviewed or analysed. According to the source, not much can be achieved by proactive reviews for compliance because ECI's sanctioning powers are limited. Therefore, the only reviews done are on the basis of complaints.

        Scoring Criteria

        A 100 score is earned where: 1) the authority has sufficient budget to monitor all incoming reports, and 2) it has sufficient staff to review all incoming reports.

        A 50 score is earned where: 1) the authority has insufficient budget to monitor all incoming reports, or 2) its staff can only review half of all incoming reports.

        A 0 score is earned where: 1) the authority can't fulfill most of its essential functions due to budget constraints, or 2) its staff only has the capacity to review 25% or less of all incoming reports.

        Sources
        1. Election Commission of India, Budget and Expenditure, http://eci.nic.in/ecimain1/thesetup.aspx#budget

        2. Ministry of Finance, Allocation for Ministry of Law and Justice, Budget 2014, Para 2 http://indiabudget.nic.in/ub2014-15/eb/sbe64.pdf

        3. Ministry of Finance, Allocation for the Election Commission of India, Budget 2014, http://indiabudget.nic.in/ub2014-15/eb/sbe63.pdf

        4. At Rs 3,426 crore, 2014 Lok Sabha elections costliest ever, PTI, Livemint, 13 May 2014 http://www.livemint.com/Politics/H62lpkVafdBdQGBQpEvibK/At-Rs3426-crore-2014-Lok-Sabha-elections-costliest-ever.html?utm_source=copy

        5. Interview with expert source who requested anonymity. August 2014.

        The names of anonymous sources are known to Global Integrity and Global Integrity has agreed not to disclose them.

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        0
        In practice, to what extent does the authority conduct investigations or audits when necessary?More about indicator

        There is no legal requirement for auditing of political finance reports. The Election Commission of India (ECI) has recently introduced transparency guidelines on political party and candidate funds and expenditures. Political parties have so far resisted accepting auditing requirements including a Guidance Note on Accounting and Auditing of Political Parties prepared by the Institute of Chartered Accountants of India (ICAI) (body that regulates the profession of Chartered Accountants in India) in 2012 on the request of the ECI. These transparency guidelines come into effect from 1 October 2014 and it remains to be seen to what extent it will be complied with.

        In respect of candidates, the ECI's investigations are limited to enquiring whether the expenditure reports have been filed in time and in the manner required by law. Most enquiries are therefore of technical nature relating to delayed filing and improper furnishing of information.

        In recent years, ECI has enquired into non-reporting of expenditure in candidate reports in 3 cases. These cases were on the basis of complaints received from other contestants. The first concerned a sitting State Legislature for incorrect reporting of expenditure and paid news during the 2007 State Assembly elections for Uttar Pradesh which has since concluded. The ECI has two important in hand presently, those of two former Chief Ministers of two States - Madhu Koda (Jharkhand) and Ashok Chavan (Maharashtra) - in respect of elections held in 2009. The allegations against Madhu Koda was that he had spent more than what he reported. Ashok Chavan had not reported "paid news" in his election accounts. All three candidates had appealed up to the Supreme Court of India which in a landmark judgment held that the ECI had powers to conduct an enquiry into the accounts of daily expenditure submitted by the candidates who are contesting in general elections and the powers of ECI to disqualify a candidate in case the account of expenditure is false or incorrect. These candidates had challenged that the ECI had no powers to enquire into the correctness or otherwise of their election accounts.

        According to a source, the ECI considers political parties as stakeholders in the process of conducting free and fair elections. In the absence of legislative teeth, the approach of the ECI has been not to get adversarial with political parties but consult with and persuade parties to comply with funding/ expenditure guidelines and instructions issued by the ECI. A confrontationist approach may lead to political parties not cooperating during elections which would negatively impact the smooth conduct of elections. ECI's efforts at investigating and auditing contributions are pointless without the power to take action against violations. The laws provide for disqualification of a candidate as a consequence of violations which should really be the ultimate weapon. There are no consequences on political parties for contravention of laws and instructions of the EC except for deregistration in some cases. Enforcement would work better if monetary penalties could be imposed.

        As a result of these constraints relating to enforcements, the ECI's focus has been on the preventive side. The ECI's Election Monitoring Teams shadowed public meetings, advertisements (including paid news), campaigning, etc., during the 2014 elections and ensured that expenditures on these components were put down into the candidate accounts and kept within legal limits. In some cases, candidates cancelled public meetings because accounting for such meetings would result in over-shooting the legal limits and not accounting for them would be noticed by the EC's monitoring team.

        But the general perception is that the ECI has created a mammoth monitoring machinery of about 50,000 personnel with little to show. Itemised shadow registers of candidates expenditures are maintained by the monitoring team but this is not made public unlike the candidate's expenditure statements. Nor are there investigations comensurate with rampant illegal expenditure.

        According to Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms, "It is not impossible or complicated to monitor candidate expenditure returns. The filing could be computerized. CEC can easily get staff that they need. The CEC has been doing some amount of monitoring as evident from the Ashok Chavan paid news case. There are Election Observers – 3 to a constituency including from the revenue service, but we have no information about what they do. Their reports are confidential. We hear of seizures of alcohol, arms and cash, but there is not much beyond that. They need to do more after the event to monitor spending information instead of leaving submitting their reports up to the close of the elections. It is tedious work but not impossible."

        Barun Mitra, Director, Liberty Institute-Empowering India, says that "There is a huge perception gap between the official data and what the general public believes. The public perception is that the campaign finance data submitted by the candidates, or the income tax returns and donors list submitted by political parties are not the true reflection of the real situation. The EC has failed to verify the election expenditures, since with rigorous attempts to monitor campaigns and create shadow accounts for each candidate, much of the campaign related expenditure has gone underground. The election expenditure and political party financial reports and submissions can neither be scrunitinised nor authenticated. While the ECI has seized more cash and alcohol at each subsequent election, generally it is believed to be only the the tip of the iceberg."

        Dr. Jayaprakash Narayan, President of the Lok Satta Party, said that "Expenditure monitoring exercise of the Election Commission is a farce and wasteful. If the premise on which it is based is a wrong one, no matter what you do is inconsequential. I haven't seen any outcome. ECI has not stopped any illegitimate expenditure. The Commission accepts the lies submitted by candidates. Honest declarations of expenditure is an exception not a norm even acknowledged by Vajpayee (A.B. Vajpayee, former Prime Minister), who said politicians start their legislative career with a lie (by submitting false expenditure returns). The Commission doesn't realize the truth of this. It doesn't have the power to change the laws, but it can surely mobilize public opinion and persuade the political process. It is a very bureaucratic accountant's approach and misses the big picture, which is not so much about the expenditure ceiling, but the manner in which the money is spent - is it for the illegitimate purpose of vote-buying or has it been spent legitimately in persuading the voter. I don't want technicalities to determine the outcomes."

        Scoring Criteria

        A 100 score is earned where the authority conducted at least three investigations or audits during the most recent electoral campaign.

        A 50 score is earned where the authority conducted at least one investigation or audit during the most recent electoral campaign.

        A 0 score is earned where the authority didn't conduct any investigation or audit during the most recent electoral campaign.

        Sources
        1. EC disqualifies 2,171 candidates for not filing returns in time by J. Balaji, The Hindu, 16 February 2013 http://www.thehindu.com/todays-paper/tp-national/ec-disqualifies-2171-candidates-for-not-filing-returns-in-time/article4420813.ece

        2. Disqualification of Umlesh Yadav, sitting MLA, Uttar Pradesh State Assembly http://eci.nic.in/ecimain/recent/DisqualificationcaseUmkeshYadav.pdf

        3. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

        4. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        5. Interview with expert source who requested anonymity. August 2014.

        6. Supreme Court of India, Ashok Shankarrao Chavan v. Dr. Madhavrao Kinhalkar & Ors. With Madhu Koda v. Election Commission of India & Smt. Umlesh Yadav v. Election Commission of India & Ors., 5 May 2014 http://supremecourtofindia.nic.in/outtoday/SLP%20C%2029882%20of%202011%20latest.pdf

        7. The Institute of Chartered Accountants of India (ICAI), Guidance Note on Accounting and Auditing of Political Parties, 2012 http://220.227.161.86/27383reserach16903-aapp.pdf

        8. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms [http://adrindia.org/about-adr/founders-and-trustees] ; Date of Interview - 20 July 2014.

        9. Interview with Barun Mitra, Director, Liberty Institute - Empowering India, Date of Interview: 20 August 2014 Liberty Institute - www.InDefenceofLiberty.org; Empowering India - www.EmpoweringIndia.org

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        In practice, to what extent does the authority publish the results of investigations or audits?More about indicator

        In cases where the Election Commission of India (ECI) has conducted investigations into political finance violations, its orders issued on various stages of enquiry, from show cause notices to final orders are made available on its website. However, the ECI's powers of investigation is limited to enquiring whether the expenditure reports have been filed in time and in the manner required by law. Most enquiries are therefore of technical nature relating to delayed filing and improper furnishing of information. These findings are available in the public domain in the form of disqualification orders, but does not clearly mention the reasons for its findings. Since no investigations have been carried out during the study period, no full reports on the results of such investigations are publicly available.

        In recent years, ECI has enquired into non-reporting of expenditure in candidate reports in 3 cases. The first concerned a sitting State Legislature, Umlesh Yadav, for incorrect reporting of expenditure and paid news during the 2007 State Assembly elections for Uttar Pradesh which has since concluded. The ECI has two important in hand presently, those of two former Chief Ministers of two States - Madhu Koda (Jharkhand) and Ashok Chavan (Maharashtra) - in respect of elections held in 2009. The allegations against Madhu Koda was that he had spent more than what he reported. Ashok Chavan had not reported "paid news" in his election accounts. These orders are available in the public domain. These orders are speaking order stating in detail the nature of the violations and the findings of the ECI's enquiries.

        According to Barun Mitra, Director of Liberty Institute-Empowering India, New Delhi, "The ECI maintains ‘shadow registers’ of election expenditure for each candidate, but that is not put up in the public domain so that it can be compared with what has been filed by the candidates and parties. Even assuming that the ECI does not have the capacity of verifying the information submitted to it, it can at least make it available to the public in an user-friendly manner which might encourage active citizens to compare and analyse data and ECI could follow up with proper investigations. If couple of leads can be pursued with vigour, then it could have a deterrent impact on violators of the law."


        Peer Reviewer comment: Agree. Ashok Chavan has been exonerated in the paid news case by the Delhi High Court in September 2014 just before the announcement of the state assembly elections in Maharashtra. See The reasons given were that the ads taken out were not reported to him and without his knowledge when filing his election expenditure statement. The Court faulted the ECI for not giving him the 20 days time to explain his statement as per the Conduct of Elections Rules.

        Scoring Criteria

        A 100 score is earned where the authority publishes reports of all its investigations or audits a month or less after their conclusion.

        A 50 score is earned where reports are available to the public more than a month after the conclusion of the investigation or audit.

        A 0 score is earned where reports are not available to the public or they become available after six months or more after conclusion of the investigation or audit. A 0 score is also earned where only summaries of the reports are publicly available.

        Sources
        1. Election Commission of India, Disqualification of Umlesh Yadav, sitting MLA, Uttar Pradesh State Assembly http://eci.nic.in/ecimain/recent/DisqualificationcaseUmkeshYadav.pdf

        2. Election Commission of India, Show cause Notice to Ashok Chavan, former Chief Minister, Maharashtra http://eci.nic.in/ecimain1/current/AshokChavanorder13072014.pdf

        3. Election Commission of India, List of Disqualified Persons http://eci.nic.in/eci_main/ElectoralLaws/DisqualifiedPersons06032014.pdf

        4. Interview with Barun Mitra, Director, Liberty Institute - Empowering India, Date of Interview: 20 September 2014 Liberty Institute - www.InDefenceofLiberty.org; Empowering India - www.EmpoweringIndia.org

        Reviewer's sources: 1. See "HC dismisses Ashok Chavan ‘paid news’ case", by Abhinav Garg, in Times of India, Sept. 13, 2014. http://timesofindia.indiatimes.com/india/HC-dismisses-Ashok-Chavan-paid-news-case/articleshow/42385479.cms

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      Enforcement Capabilities
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        YES
        In law, there are sanctions in response to political finance violations.More about indicator
        1. Illegal election expenses in respect of candidates for elections include bribing voters in cash and kind and any expense that exceeds the legal limits. Electoral offenses/ violations of electoral practices are contained in the Indian Penal Code, 1860, Code of Criminal Procedure, 1973 and Representation of People Act, 1951.

        2. Conviction in offenses relating to elections and corrupt practices results in disqualification under Sections 8 and 8A of the Representation of People Act, 1951 from the election process for six years. While disqualification under Section 8 is automatic (with a 3 month breather for those candidates who are legislators), disqualification under Section 8A requires approval of the President of India.

        3. Charges of corrupt electoral practices identified under Section 123 of the Representation of People Act, 1951 can be agitated by a candidate or a voter in the concerned constituency of the State through Election Petitions under Section 81 of the Act read with Section 100 of the Act in the High Court , against a returned candidate within 45 days of the declaration of the election results.

        4. The Election Commission of India (ECI) has the power to disqualify a candidate under Section 10A of the Representation of People Act, 1951 read with Rule 89(5) of Conduct of Election Rules 1961 for his/ her failure to lodge his account of election expenses within the time and in the manner required by law. Para 16 A of the Election Symbols (Reservation and Allotment) Order, 1968, also empowers the Election Commission of India to suspend or withdraw recognition of a political party as national or state party in the case of violation of the Model Code of Conduct which includes several election related offenses and operated during the election period.

        5. Section 8A of the Representation of People Act, 1951 states - "8A. Disqualification on ground of corrupt practices.—(1) The case of every person found guilty of a corrupt practice by an order under section 99 shall be submitted, as soon as may be, after such order takes effect, by such authority as the Central Government may specify in this behalf, to the President for determination of the question as to whether such person shall be disqualified and if so, for what period: Provided that the period for which any person may be disqualified under this sub-section shall in no case exceed six years from the date on which the order made in relation to him under section 99 takes effect.


        (3) Before giving his decision on any question mentioned in sub-section (1) or on any petition submitted under subsection (2), the President shall obtain the opinion of the Election Commission on such question or petition and shall act according to such opinion."

        1. Section 10A of the Representation of People Act, 1951 reads as - "10A. Disqualification for failure to lodge account of election expenses. —If the Election Commission is satisfied that a person— (a) has failed to lodge an account of election expenses within the time and in the manner required by or under this Act; and (b) has no good reason or justification for the failure, the Election Commission shall, by order published in the Official Gazette, declare him to be disqualified and any such person shall be disqualified for a period of three years from the date of the order."

        2. Rule 89 (5) of the Conduct of Election Rules reads as under – “When the election commission decides that a contesting candidate has failed to lodge his account of election expenses within the time and in the manner required by the Act and these rules, it shall by notice in writing call upon the candidate to show cause why he should not be disqualified under Section 10A for the failure.”

        3. Para 16A of the Election Symbols (Reservation and Allotment) Order, 1968, states that - "16A. Power of Commission to suspend or withdraw recognition of a recognised political party for its failure to observe Model Code of Conduct or follow lawful directions and instructions of the Commission- Notwithstanding anything in this Order, if the Commission is satisfied on information in its possession that a political party, recognised either as a National party or as a State party under the provisions of this Order, has failed or has refused or is refusing or has shown or is showing defiance by its conduct or otherwise (a) to observe the provisions of the ‘Model Code of Conduct for Guidance of Political Parties and Candidates’ as issued by the Commission in January, 1991 or as amended by it from time to time, or (b) to follow or carry out the lawful directions and instructions of the Commission given from time to time with a view to furthering the conduct of free, fair and peaceful elections or safeguarding the interests of the general public and the electorate in particular, the Commission may, after taking into account all the available facts and circumstances of the case and after giving the party reasonable opportunity of showing cause in relation to the action proposed to be taken against it, either suspend, subject to such terms as the Commission may deem appropriate, or withdraw the recognition of such party as the National Party or, as the case may be, the State Party."

        4. Section 81 read with Section 100 of the Representation of People Act, 1951 - "81. Presentation of petitions.—(1) An election petition calling in question any election may be presented on one or more of the grounds specified in 3[sub-section (1)] of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty-five days from, but not earlier than 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."


        "100. Grounds for declaring election to be void. - (1) Subject to the provisions of sub-section (2) if the High Court is of opinion—


        (b) that any corrupt practice has been committed by a returned candidate or his election agent or by any other person with the consent of a returned candidate or his election agent; or


        (d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected— (i) by the improper acceptance or any nomination, or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non—compliance with the provisions of the Constitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void. **"

        1. Section 123 of the Representation of People Act, 1951 states - "** (5) The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate or his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under section 25 or a place fixed under sub-section (1) of section 29 for the poll:

        (6) The incurring or authorizing of expenditure in contravention of section 77. (7) The obtaining or procuring or abetting or attempting to obtain or procure by a candidate or his agent or, by any other person with the consent of a candidate or his election agent, any assistance (other than the giving of vote) for the furtherance of the prospects of that candidate's election, from any person in the service of the Government ….



        Peer Reviewer comment: Agree. While the law clearly defines violiation of political finance laws and there are defined sanctions for specific violations, the problem is the loopholes in the law already discussed earlier which in effect allow exemption of major party expenditures from candidate expenditures and, till October 1, 2014, on the party fund-raising side, the Rs. 20,000 floor for anonymous donations.

        Scoring Criteria

        A YES score is earned where: 1) the law clearly defines violations of political finance laws, and 2) there are clearly defined sanctions for specific violations.

        A MODERATE score is earned where violations are clearly defined but sanctions for specific violations are not.

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of People Act of 1951, Sections 8-A, 10-A, 77, 81, 100, 123, 1951 read with Rule 89, 90 of the Conduct of Election Rules of 1961 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf; http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        2. Election Commission of India, Provisions of law relating to offences and corrupt practices in connection with elections, http://eci.nic.in/eci_main/CurrentElections/Table-MCC.pdf

        3. Election Symbols (Reservation and Allotment) Order, 1968, Para 16A, 1968 http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/PoliticalParty&ElectionSymbolOrder2013Eng.pdf

        4. Election Commission of India, Model Code of Conduct for the Guidance of Political Parties and Candidates, No.437/6/Manifesto/2013, dated 19 February 2014. http://eci.nic.in/ecimain1/current/ci19022014.pdf

        Reviewer's sources: 1. Interview with senior ECI official who requested anonymity, Nov. 5, 2014.

        The names of anonymous sources are known to Global Integrity and Global Integrity has agreed not to disclose them.

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        MODERATE
        In law, the oversight authority has the power to impose sanctions.More about indicator
        1. The Election Commission of India (ECI) has the power to disqualify a candidate only under Section 10A of the Representation of People Act, 1951 read with Rule 89(5) of Conduct of Election Rules 1961 for his/ her failure to lodge his account of election expenses within the time and in the manner required by law.

        2. The ECI initiates criminal complaints and tax investigations in the course of the election campaigns where incidents of violation of law, electoral offenses and corrupt practices have been committed by candidates and their supporters related to illegal election expenses. However, investigation and prosecution of the criminal cases fall within the jurisdiction of the State Governments where such offenses have been committed and economic offenses related incidents are under the jurisdiction of the Finance Ministry. The ECI therefore, does not have any control over the outcome of these investigations.

        3. Para 16 A of the Election Symbols (Reservation and Allotment) Order, 1968, also empowers the Election Commission of India to suspend or withdraw recognition of a political party as national or state party in the case of violation of the Model Code of Conduct which includes several election related offenses and operated during the election period.

        4. Conviction in offenses relating to elections and corrupt practices results in disqualification under Sections 8 and 8A of the Representation of People Act, 1951. While disqualification under Section 8 is automatic (with a 3 month breather for those candidates who are legislatures), disqualification under Section 8A requires approval of the President of India.

        5. Charges of corrupt electoral practices identified under Section 123 of the Representation of People Act, 1951 can be agitated by a candidate or a voter in the concerned constituency of the State through Election Petitions under Section 81 of the Act in the High Court against a returned candidate within 45 days of the declaration of the election results.

        6. Section 8 of the Representation of People Act, 1951 states - "8. Disqualification on conviction for certain offences. - (1) A person convicted of an offence punishable under – (a) section 153A (offence of promoting enmity between different groups on ground of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony) or section 171E (offence of bribery) or section 171F (offence of undue influence or personation at an election) or sub-section (1) or sub-section (2) of section 376 or section 376A or section 376B or section 376C or section 376D (offences relating to rape) or section 498A (offence of cruelty towards a woman by husband or relative of a husband) or sub-section (2) or sub-section (3) of section 505 (offence of making statement creating or promoting enmity, hatred or ill-will between classes or offence relating to such statement in any place of worship or in any assembly engaged in the performance of religious worship or religious ceremonies) of the Indian Penal Code (45 of 1860); or


        (i) section 125 (offence of promoting enmity between classes in connection with the election) or section 135 (offence of removal of ballot papers from polling stations) or section 135A (offence of booth capturing) of clause (a) of sub-section (2) of section 136 (offence of fraudulently defacing or fraudulently destroying any nomination paper) of this Act; or


        shall be disqualified, where the convicted person is sentenced to— (i) only fine, for a period of six years from the date of such conviction; (ii) imprisonment, from the date of such conviction and shall continue to be disqualified for a further period of six years since his release.


        (3) A person convicted of any offence and sentenced to imprisonment for not less than two years other than any offence referred to in sub-section (1) or sub-section (2) shall be disqualified from the date of such conviction and shall continue to be disqualified for a further period of six years since his release. **"

        1. Section 8A of the Representation of People Act, 1951 states - "8A. Disqualification on ground of corrupt practices.—(1) The case of every person found guilty of a corrupt practice by an order under section 99 shall be submitted, as soon as may be, after such order takes effect, by such authority as the Central Government may specify in this behalf, to the President for determination of the question as to whether such person shall be disqualified and if so, for what period: Provided that the period for which any person may be disqualified under this sub-section shall in no case exceed six years from the date on which the order made in relation to him under section 99 takes effect.

        (3) Before giving his decision on any question mentioned in sub-section (1) or on any petition submitted under subsection (2), the President shall obtain the opinion of the Election Commission on such question or petition and shall act according to such opinion."

        1. Section 10A of the Representation of People Act, 1951 reads as - "10A. Disqualification for failure to lodge account of election expenses. —If the Election Commission is satisfied that a person— (a) has failed to lodge an account of election expenses within the time and in the manner required by or under this Act; and (b) has no good reason or justification for the failure, the Election Commission shall, by order published in the Official Gazette, declare him to be disqualified and any such person shall be disqualified for a period of three years from the date of the order."

        2. Rule 89 (5) of the Conduct of Election Rules reads as under – “When the election commission decides that a contesting candidate has failed to lodge his account of election expenses within the time and in the manner required by the Act and these rules, it shall by notice in writing call upon the candidate to show cause why he should not be disqualified under Section 10A for the failure.”

        3. Para 16A of the Election Symbols (Reservation and Allotment) Order, 1968, states that - "16A. Power of Commission to suspend or withdraw recognition of a recognised political party for its failure to observe Model Code of Conduct or follow lawful directions and instructions of the Commission- Notwithstanding anything in this Order, if the Commission is satisfied on information in its possession that a political party, recognised either as a National party or as a State party under the provisions of this Order, has failed or has refused or is refusing or has shown or is showing defiance by its conduct or otherwise (a) to observe the provisions of the ‘Model Code of Conduct for Guidance of Political Parties and Candidates’ as issued by the Commission in January, 1991 or as amended by it from time to time, or (b) to follow or carry out the lawful directions and instructions of the Commission given from time to time with a view to furthering the conduct of free, fair and peaceful elections or safeguarding the interests of the general public and the electorate in particular, the Commission may, after taking into account all the available facts and circumstances of the case and after giving the party reasonable opportunity of showing cause in relation to the action proposed to be taken against it, either suspend, subject to such terms as the Commission may deem appropriate, or withdraw the recognition of such party as the National Party or, as the case may be, the State Party." +F143

        4. Section 81 read with Section 100 of the Representation of People Act, 1951 - "81. Presentation of petitions.—(1) An election petition calling in question any election may be presented on one or more of the grounds specified in 3[sub-section (1)] of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty-five days from, but not earlier than 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."

        "100. Grounds for declaring election to be void. - (1) Subject to the provisions of sub-section (2) if the High Court is of opinion—


        (b) that any corrupt practice has been committed by a returned candidate or his election agent or by any other person with the consent of a returned candidate or his election agent; or


        (d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected— (i) by the improper acceptance or any nomination, or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non—compliance with the provisions of the Constitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void. **"

        Scoring Criteria

        A YES score is earned where: 1) the oversight authority has the power to impose sanctions, and 2) it can directly prosecute violators before the courts or is independent to send cases to public prosecution.

        A MODERATE score is earned where the oversight authority has the power to impose sanctions, but it can't directly prosecute violators before the courts or is not independent to send cases to public prosecution.

        A NO score is earned where no such law exists.

        Sources
        1. The Representation of People Act of 1951, Sections 8-A, 10-A, 77, 81, 100, 1951 read with Rule 89, 90 of the Conduct of Election Rules of 1961 http://lawmin.nic.in/legislative/election/volume%201/representation%20of%20the%20people%20act,%201951.pdf;

        http://lawmin.nic.in/legislative/election/volume%202/conduct%20of%20election%20rules,%201961.pdf

        1. Election Commission of India, Model Code of Conduct for the Guidance of Political Parties and Candidates, No.437/6/Manifesto/2013, dated 19 February 2014. http://eci.nic.in/ecimain1/current/ci19022014.pdf

        2. Election Symbols (Reservation and Allotment) Order, 1968, Para 16A, 1968 http://eci.nic.in/ecimain/ElectoralLaws/OrdersNotifications/PoliticalParty&ElectionSymbolOrder2013Eng.pdf

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        0
        In practice, to what extent do offenders comply with sanctions imposed?More about indicator

        The Election Commission of India (ECI) has little powers of sanction over political parties or candidates. ECI can only disqualify a candidate only under Section 10A of the Representation of People Act, 1951 read with Rule 89(5) of Conduct of Election Rules 1961 for his/ her failure to lodge his account of election expenses within the time and in the manner required by law. The ECI initiates criminal complaints and tax investigations in the course of the election campaigns where incidents of violation of law, electoral offenses and corrupt practices have been committed by candidates and their supporters related to illegal election expenses. However, investigation and prosecution of the criminal cases fall within the jurisdiction of the State Governments where such offenses have been committed and economic offenses related incidents are under the jurisdiction of the Finance Ministry. The ECI therefore, does not have any control over the outcome of these investigations. In respect of political parties, there is no way the ECI can enforce compliance of its guidelines.

        The ECI has compiled 804,433 cases of violations of the Model Code of Conduct and issued Notices in 426077 cases in the course of General Elections 2014. ECI has taken action in 976,012 cases and First Information Reports (with the police) lodged in 16,048 cases. In fact, after the elections are over, the ECI has to follow up with the State Governments to take the prosecution of offenders booked for violation of election laws to its logical conclusion because the general tendency of the governments have been to go slow or withdraw prosecution of the accused. ECI role has therefore been more on the preventive side. In the recent elections, the ECI has reported success in monitoring legal election expenditure and kept a check on cash transportation, liquor distribution and other freebies through its extensive monitoring mechanism.

        In the absence of legislative teeth, the approach of the ECI has been not to get adversarial with political parties but consult with and persuade parties to comply with funding/ expenditure guidelines and instructions issued by the ECI. A confrontationist approach may lead to political parties not cooperating during elections which would negatively impact the smooth conduct of elections. ECI has recently managed to issue transparency guidelines for political parties finances after consultation with the parties. These guidelines come into effect from 1 October 2014 and it is to be seen how far they will be complied with. The laws provide for disqualification of a candidate as a consequence of violations, whereas this should be the ultimate weapon. There are no consequences on political parties for contravention of laws and instructions of the EC. The enforcement would work better if monetary penalties could be imposed.

        ECI has therefore only succeeded in disqualifying a large number of candidates under Section 10A. These disqualifications are mostly on technical grounds. Most of such candidates are not serious contenders and are likely to be dummy candidates put up by political parties. There has been only one instance of a sitting State Legislator who was actually disqualified by the ECI for incorrect reporting of expenditure and paid news during the 2007 State Assembly elections for Uttar Pradesh. The ECI also initiated enquiry agains two former Chief Ministers of two States - Madhu Koda (Jharkhand) and Ashok Chavan (Maharashtra) - in respect of elections held in 2009. The allegations against Madhu Koda was that he had spent more than what he reported. Ashok Chavan had not reported "paid news" in his election accounts.

        The charged candidates do not fail to drag proceedings through the complex judicial process making any penalty meaningless even if a final order is passed. All three candidates referred above had appealed up to the Supreme Court of India challenging the powers of the ECI to to enquire into the correctness or otherwise of their election accounts. The Supreme Court has held that the ECI does have the powers to enquire into the veracity of the expenditure report and disqualify a candidate in case the account of expenditure is false or incorrect. The ECI has now issued a show cause notice to Ashok Chavan, who in the meantime has contested the 2014 elections and has been re-elected.


        Peer Reviewer comment: Agree. Ashok Chavan has been exonerated in the paid news case by the Delhi High Court in September 2014 just before the announcement of the state assembly elections in Maharashtra. See "HC dismisses Ashok Chavan ‘paid news’ case", by Abhinav Garg, in Times of India, Sept. 13, 2014. The reasons given were that the ads taken out were not reported to him and without his knowledge when filing his election expenditure statement. The Court faulted the ECI for not giving him the 20 days time to explain his statement as per the Conduct of Elections Rules.

        Scoring Criteria

        A 100 score is earned where: 1) offenders comply with the sanctions imposed without exception, and 2) they are not repeat offenders.

        A 50 score is earned where: 1) offenders usually comply with the sanctions imposed but exceptions exist, or 2) most are not repeat offenders but some exceptions exist.

        A 0 score is earned where: 1) offenders rarely comply with the sanctions imposed, or 2) most are repeat offenders.

        Sources
        1. EC disqualifies 2,171 candidates for not filing returns in time", by J. Balaji, The Hindu, 16 February 2013 http://www.thehindu.com/todays-paper/tp-national/ec-disqualifies-2171-candidates-for-not-filing-returns-in-time/article4420813.ece

        2. Election Commission of India, Disqualification of Umlesh Yadav, sitting MLA, Uttar Pradesh State Assembly http://eci.nic.in/ecimain/recent/DisqualificationcaseUmkeshYadav.pdf

        3. Election Commission of India, Show cause notice on Ashok Chavan, Order dated 13 July 2014 http://eci.nic.in/ecimain1/current/AshokChavanorder13072014.pdf

        4. Interview with expert source who requested anonymity. August 2014.

        5. Election Commission of India, Letter dated 12 May 2014, Initiating action for violation of election laws, http://eci.nic.in/eci_main1/current/ImpIns04082014.pdf

        6. Election Commission of India, Model Code of Conduct (MCC) Information, http://eci.nic.in/ecimain1/GE2014/MCCInformation.htm

        7. Election Commission of India, Transparency Guidelines for Political Parties, No. 76/PPEMS/Transparency/2013, dated 29 August 2014 http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf

        Reviewer's sources: 1. See "HC dismisses Ashok Chavan ‘paid news’ case", by Abhinav Garg, in Times of India, Sept. 13, 2014. http://timesofindia.indiatimes.com/india/HC-dismisses-Ashok-Chavan-paid-news-case/articleshow/42385479.cms

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        --
        Open Question: How strong is enforcement, and what impedes more effective enforcement?More about indicator

        The ECI has created an elaborate Election Expenditure Monitoring Mechanism comprising of (1) Expenditure Observers (EO) to observe the election expenses by the candidates at least one to a district; (2) Assistant Expenditure Observers assigned to each constituency to assist the EO; (3) Video Surveillance Teams for each Assembly Constituency / Segment to cover sensitive events and big public rallies in the constituency; (4) Video Viewing Team for each Assembly Constituency /Segment (5) Accounting Teams, at least one for each Assembly Constituency/ Segment to maintain "Shadow Observation Register" and "Folder of Evidence" for each candidate of the Assembly Constituency / Segment; (6) Complaint Monitoring Control Room and Call Centre, a 24X7 Call Centre for the public to inform corrupt practices related to election; (7) Media Certification and Monitoring Committee in each district for certification of advertisements in electronic; (8) Flying Squads under each Assembly Constituency/ Segment for tracking illegal cash transactions or any distribution of liquor or any other items suspected of being used or bribing the voters; (9) Static SurveillanceTeam under each Assembly to man check posts and keep watch on movement of large quantities of cash, illegal liquor, any suspicious item or arms being carried in their area; (10) Expenditure Monitoring Cell responsible for video graphing all public meetings/ rallies political parties/ potential candidates during the period between announcement of election and notification of election and expenditure incurred by political parties as per the video CDs/ DVDs are calculated by this Cell for estimating the expenditure by the political parties. Further, the ECI has full access to all the manpower requirements and funds necessary to conduct free and fair elections.

        But despite a Monitoring team of 50,000 personnel chasing 8251 candidates contesting from 543 constituencies, the ECI was unable to bring down money power at play in the 2014 elections. Even before the elections, a study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated that contestants would end up spending Rs. 5-7 crore ($ 827,267 - 1,158,173) each, against a legal expenditure limit of Rs. 70 lakh ($ 115,855) in a large Parliament constituency and Rs. 28 lakh ($ 46,342) in a large Assembly constituency. Rajdeep Sardesai, senior journalist, said "I have spoken to many candidates and I think individual candidates have spent Rs. 10-20 crores ($ 1,654,534 - 3,309,068) on average. In the North, the spending is less about Rs. 5-10 crores ($ 827,267 - 1,654,534) and in the West and South it is about Rs. 20-30 crores ($ 3,309,068 - 4,963,602). EC is fighting a losing battle, not worth the resources being spent on monitoring expenditure. The government should be looking at state funding of elections."

        Dr. Jayaprakash Narayan, President of Lok Satta Party, says that "80% - 90% of the funding is unrelated to the campaign. It is about vote buying, distribution of liquor and other short term goodies. In Andhra Pradesh state where I contested from and which had simultaneous polls for Parliament and State Assemblies (of Telegana and Andhra Pradesh), all candidates put together would have spent Rs. 8000 crores ($ 1.3 billion). Average candidate spending in Assembly seats would be about Rs. 7 - 8 crores ($ approx 1.3 million) and about Rs. 25 - 30 crores ($ 5 million approx. ) in Parliament seats. Several candidates spent about Rs. 50 crores ($ 8.2 million approx.) and a couple of candidates have spent Rs. 150 - 200 crores ($ 25 million approx.). Andhra Pradesh is the worst state for illegal expenditures followed by Tamilnadu, Karnataka and Maharashtra. In Jammu and Kashmir, western Uttar Pradesh, Haryana, it is a growing phenomenon. In Bihar, some candidates have spent Rs. 2 crores. In States like Kerala, West Bengal and Gujarat, money power has the least impact."

        Dr. Jayaprakash Narayan, further said that "Expenditure monitoring exercise of the Election Commission is a farce and wasteful. If the premise on which it is based is a wrong one, no matter what you do is inconsequential. I haven't seen any outcome. ECI has not stopped any illegitimate expenditure. The Commission accepts the lies submitted by candidates. It doesn't have the power to change the laws, but it can surely mobilize public opinion and persuade the political process. It is a very bureaucratic accountant's approach and misses the big picture which is not so much about the expenditure ceiling. The focus ought to be on the manner in which the money is spent - is it for the illegitimate purpose of vote-buying or has it been spent legitimately in persuading the voter. Technicalities cannot determine the outcomes."

        On its part, the ECI has seized about Rs. 300 crores in cash, 16 million litres of alcohol and 17,000 kg of drugs, among other goods intended for the illegal voter inducements. In Andhra Pradesh, the worst offender by all accounts, the cash seizure was a high Rs. 124 crores ($ 20 million). In respect of candidates, the ECI's powers of investigation is limited to enquiring whether the expenditure reports have been filed in time and in the manner required by law. This results in the ECI disqualifying a large number of candidates on mostly technical grounds. Most of such candidates are not serious contenders and are likely to be dummy candidates put up by political parties. There has been only one instance of a sitting State Legislature who was actually disqualified by the ECI for incorrect reporting of expenditure and paid news during the 2007 State Assembly elections for Uttar Pradesh. Process of disqualification against two former Chief Ministers of two States - Madhu Koda (Jharkhand) for spending more than what he reported and Ashok Chavan (Maharashtra) for not reporting "paid news" in his election accounts - in respect of elections held in 2009, is underway. Even this delayed process had to be cleared by the Supreme Court of India after the candidates moved one court after another questioning the ECI's powers to conduct an enquiry into their expenditure accounts. Ashok Chavan in the meantime, has contested the 2014 elections and has been re-elected.

        The ECI does not have any control over the outcome of the investigations initiated by it for electoral offenses during the election period. Investigation and prosecution of the criminal cases fall within the jurisdiction of the State Governments where such offenses have been committed and economic offenses related incidents are under the jurisdiction of the Finance Ministry. In fact, after the elections are over, the ECI has to follow up with the State Governments to take the prosecution of offenders booked for violation of election laws to its logical conclusion because the general tendency of the governments have been to go slow or withdraw prosecution of the accused. In respect of political parties, there is no way the ECI can enforce compliance of its guidelines.

        According to a source, the ECI has done a good job in the 2014 elections to keep legal expenditure under check by monitoring paid news closely and invoking powers of search and seizure that even the law does not permit. Monitoring teams have shadowed public meetings to the extent that in some cases, candidates have cancelled public meetings because accounting for such meetings would result in over-shooting the legal limits and not accounting for them would be noticed by the EC's monitoring team. The media monitoring team have diligently scanned news articles and advertisements and wherever a candidate's name has appeared in the news, it has been presumed to be paid news and the candidate has been asked to account for the news article in their campaign expenditures. Large seizures of cash, liquor, drugs have been made which helped check illegal expenditures.

        But ECI is handicapped in many ways. Instances of vote-buying and other such corrupt practices are non-cognisable offenses under the Indian Penal Code and Code of Criminal Procedure. This means that search, seizure and arrests cannot be done by polling personnel without the permission of the magistrate. During election periods when the action is fast paced, ECI finds its hands tied because it doesn't have the legal power to stop illegal expenditures. Despite these constraints, ECI has been conducting search and seizure operations though its actions can be called to question in court. ECI has been pressing for legislative changes to make these electoral offenses cognisable to allow ECI the legal authority to conduct search, seizures and arrests, but the government has not acted on the ECI's proposals as yet. In respect of political parties, the ECI lacks legislative teeth because of which the approach of the ECI has been not to get adversarial but consult with and persuade political parties to comply with funding/ expenditure guidelines and instructions issued by the ECI. Disqualification of candidates or de-registration/ de-recognition of political parties are difficult to enforce and should be used as an ultimate weapon. Stringent monetary penalties should be introduced by law.

        T.S. Krishna Murthy, Former Chief Election Commissioner of India, says that "I agree that there is a perception about EC not being effective. I am afraid that this is substantially untrue. The EC has to act within the framework of the Constitution of India, Representation of People Acts and the Model Code which has no statutory backup, although it has been approved by the Supreme Court. The Model Code has very limited punishing powers.The maximum it can do is to withdraw the Party Symbol. That cannot obviously be the punishment in the case of every violation. In my opinion, EC should have power to punish the violators with fine or disqualification of the voter or the candidate. It should have the power to impose fines on poltical parties especially in cases repeated violations. This would require legislative backing to the Model Code. It is true that our law relating to Campaign Expenditure is flawed. The ceiling is applicable only to candidates and not to the Political Parties. EC monitoring the candidates expenditure is reasonably good and effective but EC has no control over cash expenditure incurred in subtle manner often anonymously. Cash expenditure leaves very little trace like cash disbursement to voters. The answer to this increasing menace is State funding of Elections under ECs supervision."

        Advocate Ranjeev C Dubey, believes that "Given the complexity of the process, and the perfidy of the political participants, I am of the view that ECI had generally done a magnificent job in the last elections. As for campaign finance violations, they haven’t scratched the surface of the problem, but I am sure they are aware of the magnitude of the task. The systemic failure in the judiciary has its extraordinary impact throughout our polity, and our economy. Election law is only one very tiny bit of that piece. More the pity because the judiciary has no perceptible commitment to reforming itself in a meaningful time bound way."

        Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms, said that "It is not impossible or complicated to monitor candidate expenditure returns. The filing could be computerized. CEC can easily get staff that they need. The CEC has been doing some amount of monitoring as evident from the Ashok Chavan paid news case. There are Election Observers – 3 to a constituency including from the revenue service, but we have no information about what they do. Their reports are confidential. We hear of seizures of alcohol, arms and cash, but there is not much beyond that. They need to do more after the event to monitor spending information instead of leaving submitting their reports up to the close of the elections. It is tedious work but not impossible. The best way of improving things is to countermand or set aside elections where spending limits have been grossly exceeded."


        Peer Reviewer comment: Agree.
        The Current Research explains well the legal and political conditions that prevent effective enforcement of even election expenditure leave alone political finance regulation in general. In the larger context of political finance as a whole, encompassing not only election expenditure by candidates and parties but party funding for both electoral and general party purposes, in my view, two broad complementary sets of reforms need to be put in place. One, complete disclosure of party donations by amount and donor, something that is now there in the 29 Aug. 2014 transparency guidelines although these have the same enforcement problems noted in the Current Research to this question. Two, some system of rule-bound, transparent public funding of political parties, for which a wide menu of options (noted in Gowda and Sridharan, 2012) is available to pick and choose from, combined with and conditioned on regulation that ensures internal democracy, transparency and financial accountability within parties. The transparency guidelines alone, that "strip parties naked" by removing the Rs.20,000 floor will not work because it might lead to drying up of private funding of parties by donors who want anonymity. In the larger context, private funding for expensive elections in a low per capita income country are probably not viable if fully transparent as a lot of the money will be "interested" money; large-scale party funding by disinterested donors who do not seek a quid pro quo from victorious politicians and parties is improbable. Like in a host of much richer democracies some system of fair and transparent public funding will have to be instituted to provide a financial floor to qualifying parties (by some vote/seat criteria) along with freedom to raise private funding provided the latter is fully disclosed along with tax deductibility incentives.

        Scoring Criteria

        Please provide a general explanation of the effectiveness of enforcement, describing: 1) any conditions that may prevent effective enforcement, and 2) explain what are the most urgent areas of reform in the country's political finance system.

        Sources
        1. "Elections to give Rs 60,000 crore GDP boost to economy: ASSOCHAM", 12 March 2014 http://www.assocham.org/prels/shownews-archive.php?id=4421

        2. "How candidates cook books to spend crores over Election Commission limit", The Times of India, 11 April 2014, http://timesofindia.indiatimes.com/news/How-candidates-cook-books-to-spend-crores-over-Election-Commission-limit/articleshow/33577943.cms

        3. "How political parties have a well-oiled system of hiring aircraft during elections" by Binoy Prabhakar, Economic Times, 23 March 2014 http://articles.economictimes.indiatimes.com/2014-03-23/news/484915471air-india-narendra-modi-aircraft

        4. Interview with T.S. Krishna Murthy, Former Chief Election Commissioner of India, Date of Interview: 18 August 2014 http://en.wikipedia.org/wiki/T.S.Krishnamurthy

        5. Interview with Rajdeep Sardesai, Senior Journalist, Date of Interview: 9 August 2014. http://en.wikipedia.org/wiki/Rajdeep_Sardesai

        6. Interview with Dr. Jayaprakash Narayan, President of Lok Satta Party, Date of Interview: 14 August 2014 http://www.loksatta.org/leaders.php#jp

        7. Interview with expert source who requested anonymity. August 2014.

        8. Election Commission of India, Search and Seizure Information http://eci.nic.in/ecimain1/GE2014/RptConsolidatedsearchsezuireStatewise%20-%20for%20merge.htm

        9. Interview with Advocate Ranjeev C Dubey, Managing Partner, N South, Advocates http://www.ranjeevdubey.com/; Date of interview - 30 July 14.

        10. Interview with Prof. Trilochan Sastry, Founder & Trustee of Association for Democratic Reforms http://adrindia.org/about-adr/founders-and-trustees ; Date of Interview - 20 July 2014.

        Reviewer's sources: 1`. "Reforming India’s Party Financing and Election Expenditure Laws, M. V. Rajeev Gowda and E. Sridharan, ELECTION LAW JOURNAL, Volume 11, Number 2, 2012; [http://online.liebertpub.com/doi/abs/10.1089/elj.2011.0131]. 2. “Toward State Funding of Elections in India: a Comparative Perspective on Possible Options”, E. Sridharan, JOURNAL OF POLICY REFORM, Vol. 3, No. 3 (October) 1999.
        3. Election Commission of India, "Guidelines on Transparency and Accountability in Party Funds and Election Expenditure" (No. 76/PPEMS/Transparency I G1022013).(http://eci.nic.in/ecimain1/PolPar/Transparency/Guidelines29082014.pdf).

The Parliament of India comprises two Houses - the Lok Sabha (Lower House) and Rajya Sabha (Upper House). The Lok Sabha (House of the People) has a strength of 543 members who are directly elected by the citizens of India on the basis of universal adult franchise. Elections follow the first-past-the-post system and are held every five years. The Rajya Sabha (Council of States) is a permanent body and can have a maximum of 250 members. 238 members are elected from States and Union Territories and 12 members nominated by the President of India from eminent persons from the field of literature, science, art and social service. One third of the members retire every second year and are replaced by newly elected members. Each member is elected for a term of six years. Elections to the Rajya Sabha are held through the system of proportional representation of elected members of the Legislative Assembly of the State by single transferable vote. In actuality, the Rajya Sabha has 245 members, 233 being elected by the members of the State Legisliative Assemblies.

The President of India is elected by the elected members of the Vidhan Sabhas (State Legislative Assembly), Lok Sabha and Rajya Sabha, and serves for a period of 5 years (the incumbent can stand for re-election). A formula used to allocate votes ensures that there is a balance between the population of each state and the number of votes members from a State Legislative Assembly can cast and gives an equal balance between State Assembly members and National Parliament members. If no candidate receives a majority of votes, the losing candidates are eliminated from the contest and votes for them transferred to other candidates, until one candidate gains a majority.

The powers to legislate on all matters concerning elections, including political finance regulations at the level of the national Parliament and State Legislatures, vests with the national Parliament. By law, political parties are free to receive voluntary contributions from any person and any company, other than a government company, under the condition that the parties must declare to the Election Commission the list of contributions received in excess of Rs. 20,000 in any financial year by amount and identity of donor. Candidates are also free to receive contributions without limit but are subject to expenditure limits during elections and subject to declaring it in their income tax returns and providing receipts as supporting evidence that such donations were used for electoral expenses. Neither a political party nor a candidate can receive funding from any foreign sources except from Indian citizens based abroad.

The 2014 General Elections to the Lok Sabha was held between 7 April 2014 to 12 May 2014 in 9 phases across the country. The Schedule for the General Elections was announced on 5 March 2014 and the Model Code of Conduct (MCC) for the Guidance of Political Parties and Candidates came into operation on the same day in the entire country which was applicable to all Political Parties and to the Union and State Governments and UT Administrations. Results were declared on 16 May 2014.

Additionally, under Article 243K and 243ZA of the Constitution of India, elections are held once in five years to Panchayats (rural local bodies) and Municipalities (urban local bodies). These elections are conducted by the State Election Commission of every State. The State Election Commissioner is appointed by the Governor of the concerned State.