India’s goes to vote  from 7 April to 12 May 2014 , the longest election in the country’s history, to select the 16th Lok Sabha. Elections in India are conducted by the Election Commission. Guess. 2014 general election is  being compared to the general election in 1977.   Have you thought how much will  Lok Sabha election 2014 will cost – for Election Commission to conduct the elections, for candidates. This also will be the longest and the costliest general election in the history of the country with the Election Commission of India estimating that the election will cost the exchequer Rs 3,500 crores, excluding the expenses incurred for security and individual political parties.Parties are expected to spend 30,500 crores (about US$5 billion) in the election. This is three times the amount spent in the previous election and is the world’s second highest after the US$7 billion spent on the 2012 U.S. election

Overview of General Elections in India in 2014

Elections in India is a big,HUGE gargantuan event. Some facts of General Elections in Indian in 2014 are as follows :

• India’s national elections will be from April 7 to May 12 2014.
• Voting will be held in a nine phases .The staggering of elections over nine phases across India,(six phases are needed to conduct polling in UP and Bihar  to shift police and paramilitary forces from one part of these state to another just to keep order). India may justifiably celebrate democracy but it is almost a garrisoned democracy.
• Counting of votes is scheduled on May 16 and a new government is expected to be formed by end May
• Voting would take place for 543 of the 545 Lok Sabha seats. Two members are nominated by the country’s President
• A total of 272 seats are needed for majority.
• There will be 930,000 polling stations spread across the diverse climatic and geographic zones in the country.
• More than 1.2 million electronic voting machines will be put into use in the election.
• Dozens of political parties and thousands of candidates will be participating. Did you know, In 1996 one constituency in Tamil Nadu had a record 1,032 candidates and 88 of them did not get a single vote.
• 814 million voters are eligible to vote in the upcoming elections. Of these, 97 million new voters were added since the previous general elections in 2009

2014 General Elections are being compared to Lok Sabha elections in 1977. In the Indian general election 1977 the ruling Congress lost control of India for the first time in independent India . The election came after the end of The Emergency that Prime Minister Indira Gandhi had imposed in 1975  , Janata alliance of parties opposed to the ruling Congress party, won 298 seats. Prime Minister Indira Gandhi and her son Sanjay Gandhi both lost their seats. Morarji Desai was chosen as the leader of the alliance in the newly formed parliament and thus became India’s first non-Congress Prime Minister on 24 March. The Congress lost nearly 200 seats.

Cost of Conducting the General Election

The cost for elections is tracked by Ministry of Statistics & Programme Implementation (MOSPI)  under Miscellaneous Sector at mospi.nic.in/Mospi_New/site/India_Statistics.aspx . As per Ministry of Law and Justice, 2009 election cost was around 1200 cr. Indian politicians are expected to spend around $5 billion or Rs. 30,500 crore (at 1 dollar=61 rupees) on campaigning for elections. India’s projected campaign spending is only rivalled by the $7 billion (Rs 42,700 crore) spent by candidates, parties and support groups in the 2012 U.S. presidential race, according to data provided by the U.S. election commission.

Cost of Elections in India : Election Commission

 Election Commission oversees elections in India. The Election Commission of India is an autonomous, constitutionally established federal authority responsible for administering all the electoral processes in India ,Parliament of India and the state legislatures and of elections to the office of the President of India and the Vice-President of India. The commission consists of a Chief Election Commissioner (CEC) and two Election Commissioners (EC), appointed by the President of India. The current CEC is V.S.Sampath. T.N.Seshan who served as the 10th Chief Election Commissioner of India (1990–96) left his mark as he successfully ended many electoral malpractices in India.

India’s national elections are a huge administrative undertaking involving 11 million government workers, 930,000 polling stations and 1.7 million electronic voting machines, with administrative costs expected to exceed $645 million. The Election Commission sends personnel and supplies to every corner of India using cars, trains, planes, elephants, mules, camels and boats

For the convenience of the voters, polling stations will be set up in the desert sands of Rajasthan, in the snowy Himalayan mountains and in the tiny islands in the Indian Ocean. The Election Commission stipulates that no person should have to travel more than two kilometers to cast a vote. So, in the previous general election in 2009, voting booths even catered to two or three voters for example in Gujarat, a temple caretaker was a single voter.

The Election Commission has estimated that the 2014 Lok Sabha elections will cost the exchequer 3,500 crore, about 150% more than the amount spent for the 2009 polls ( 1,400 crore). This does not include the expenses incurred for security and the amount political parties will spend. Every state sends expenditure statements to the Centre for reimbursement. The Union law ministry then peruses the statements and reimburse the states. Some of the expenses by Election Commission are :

•  Six months before polling, EC starts campaigns across the country asking people to enrol. They release advertisements, visit places and stage street plays.
•  After the rolls are finalized, they are digitized.
•  Other expenses include payment of honorarium to officials involved in election related work. The officials are paid for attending training sessions and for their travel.
•  Another major expense is preventing parties from distributing cash to voters

opengovernanceindia.org Lok Sabha Election Expenditure  shows in pictorial form the expenses which we have captured in the image below . Click on the image to enlarge

Lok sabha election expenditure

Spending on previous Indian elections have benefited a wide range of businesses, from media groups and advertisers that rake in campaign-ad revenues to consumer-based firms that capitalise indirectly on the overall jump in spending. Election spending largesse will help to boost Indian consumption expenditure over the second quarter of 2014, but this will be a temporary spike.

Cost of Lok Sabha Elections : By Parties and Candidates

The real big expenses, however, relate not to the conduct of the elections, but the money spent by parties and candidates. Thousands of crores will be expended by candidates and parties  in the race for power.

On 28 February, the UPA cabinet raised the limit on election spending by candidates from Rs 40 lakh to Rs 70 lakh per parliamentary constituency (in big states like UP, Bihar and Maharashtra) and from Rs 22 lakh to Rs 54 lakh for constituencies in smaller states (like Goa or the north-east).  We can never really know how much a candidate or party has spent in reality but as per  research by Centre for Media Studies, Indian politicians are expected to spend around  Rs. 30,500 crore or $5 billion or (at 1 dollar=61 rupees) on campaigning   Compared to 2009 General Elections, this amount is almost three times of the total expenditure done by various parties and support groups to entice voters.  Ref India’s spend on elections could challenge US record: report

In June 2013, BJP MP Gopinath Munde created a flutter when he claimed that he had spent Rs 8 crore on an election campaign, only to retract when the Election Commission sent him a notice. His statutory declaration was Rs. 19.36 lakh,  “When I first contested the elections to the Maharashtra Assembly in 1980, my expense was Rs. 9,000, of which Rs. 7,000 was borne by the party. But my expenditure in the last elections [2009 Lok Sabha polls] was Rs. 8 crore. Ref Hindu EC notice to Munde over poll expenses claims. AAP leader Mayank Gandhi, who is contesting polls from the North West Mumbai Lok Sabha seat, has alleged that the poll spending of the candidates from his rival parties was much beyond the Rs 70 lakh limit as set by the Election Commission. However, he denied of having any proof about this. “We do not have any proof. A large amount of money is being given to party workers in cash and it is a common practice. We do not need to give any evidence,” he said.  Ref TimesofIndia Lok Sabha polls 2014: Other candidates’ poll expense much beyond Rs 70 lakh, says Mayank Gandhi 

Where does the money go

Taking Rs 5-8 crore are the average spent by each candidate, and assuming an average of three key contestants per constituency, candidates alone will be spending Rs 8,145-13,000 crore in the aggregate. The BJP and Congress are planning to spend Rs 400-500 crore on an ad blitz, and the parties organisations could end up spending another Rs 500-1,000  crore for other forms of campaign-related expenses – banners, hoardings, organisation of public meetings, transport of key campaigners by helicopter or chartered flights, etc. Assuming the smaller regional parties together spend as much as the Congress and BJP put together, we are talking of total party spends in the region of Rs 2,000-4,000 crore. In a first, the election commission has decided to include the cost incurred by politicians on maintaining their social media image in their total expenditure allowance in the upcoming Lok Sabha polls.

Political parties are known for distributing cash bundles, alcohol and even cars during elections. In the last 3 years, Election Commission has seized Rs 198 crore from various politicians as concealed cash which would have been used for influencing voters and their votes. Cash has been seized from milk vans, helicopters and even funeral vans.The recent assembly elections witnessed newer methods of distributing money such as mobile recharge andmoney hidden within newspapers.

Where do Parties get money from 

The money mainly comes from top industrialists and IT companies. Cash transactions are the lifeblood of a political party and have always been. A recent study , Analysis of Income Tax Returns Filed and Donations Received by Political Parties – Between FY 2004-05 and 2011-12, by the Association for Democratic Reforms says 75 percent of the income of the six national political parties from 2004-05 to 2011-12 – Rs 4,895.96 crore – came from “unknown sources”. The Congress received 90 percent of its income in cash donations, and the BJP around 67 percent.  About half of this came during the elections, a period of about four months, from the date of the announcement of each election to the date of completion of elections. The image below captures the data from the report, on income and expenditure, compiled by us. Click on image to enlarge.

Income and Expenditure of Political Parties from 2004-05 to 2011-12

The EC has been tightening the screws on parties. It has demanded donations be made by cheques and other traceable transactions. All accounts must be audited and then made public. During elections, candidates have to maintain a separate account to issue money. Candidates must also maintain a register and bring it for inspection to the returning officer thrice in 14 days. In 2010, a permanent election expenditure monitoring division, headed by senior IRS official PK Dash, was created. After polls, all expenses must be submitted to the EC. If expenses are not found in order or cross limits, a candidate can be disqualified for three years. If details of contributions aren’t submitted, the money will be taxed at 30%.

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Every election is important in determining the political and economic choices that a country makes. For India, 2014 is special. Indians have tasted the fruits of high growth and prosperity. While economic issues have been raised in general elections before,for example in 1971 when Indira Gandhi promised the ending of poverty.  Because of changing demographic and educational trends, this is possibly the first time that Indians are raising and demanding answers to economic questions from their prospective leaders. Conducting a General election is an achievement that makes India stand out in the world, the number of voters 815 million in the coming election will be 2.5 times those in the world’s most powerful democracy,the US . The task of running such an election with minimal glitches is impressive in itself.  What do you feel about the General Elections of 2014? Will any party get majority? What if no party gets a majority? When will the next General elections? Please vote because not taking a decision is also a decision.