Majority of candidates 'under-reporting' poll expenses: EC

 The majority of candidates contesting polls in India are "under-reporting" their expenses and inadequate laws to regulate political funds may lead to a "fearful" situation where institutions go under the "control of money" and holding fair polls becomes difficult, Chief Election Commissioner(CEC) Nasim Zaidi said today.

He said the existing regime     for regulating donations received and funds raised by political parties are not "deterrent enough" to check black money and illegal inducements that are used to lure voters and disturb the fair play ground of the electoral process in the country.

"With the passage of time, elections are becoming expensive. Ordinary citizens, even with outstanding personal record and public service, cannot even dream to contest elections. Available resources are being garnered by few political parties and their candidates. This situation is making parties dependent on money power with all adverse implications on the society and polity.

"...in the absence of such regulations, it is feared that various institutions can be under control of money and holding free and fair elections can become increasingly difficult, Zaidi said here while addressing a global conference.

While talking about the Indian electoral perspective, the CEC said their data "indicates that candidates are under-reporting expenses within the prescribed ceiling.

"Out of 535 winners in the last Parliamentary elections, expenses of majority of winners reported to the EC were in the range of 40-80 per cent only. In reality, as we all know, candidates spend several times their legal limit to run election campaign," he said.

As per EC guidelines, a candidate trying his luck at public office for Lok Sabha polls can spend upto Rs 70 lakh while those fighting Assembly polls have the upper limit of RS 28 lakh.

Zaidi was speaking while inaugurating the regional conference of South Asian countries on the theme-- 'Use of Money in Politics and Effects on People Representation'.

Amongst the various ways abused to breach the spending limits by candidates, he said, was by the way of including in paid news instances.

"Now, how these spending limits are violated...it is violated by candidates by indulging in paid news...by spending huge amounts under the garb of paid news," he said.

The CEC said in the past few years, several hundred cases of paid news have been detected by its teams and expenses incurred on these have been added to the accounts of the candidates.

"However, since candidates in any case under-report, adding these expenses to the candidates accounts is not affecting their limits and therefore the candidates are escaping the legal scrutiny of law," he said.

Zaidi said the expense limit for candidates was also "becoming meaningless or irrelevant if their political parties spend huge amount in their constituencies under the category of general party propaganda."

The CEC said the only penalty that the poll watchdog can impose for delayed non-compliance of mandated returns by political parties is denial of tax relief but he added that this action was "not deterrent enough to ensure strict compliance."
Calling political parties in the country "loosely governed by law", Zaidi said their data suggests that out of the total funds available with political parties, contribution amount of less than Rs 20,000 constitutes 80 per cent of their total funds.

Any contribution below this threshold is exempted from being reported to the EC.
He said legal amendments are awaited to make paid news and bribing of voters an electoral offence and if this is done it will act as a catalyst "to reduce the cost of elections at constituency level."

"We are of the view that a legal ban on paid news, adding party and third party expenses in the constituency to the candidates' accounts followed by strong public disclosure and penalties may bring the overall cost down at constituency level (for election related expenditure)," he said.

Zaidi also underlined a number of challenges being faced by the poll body.
With the level-playing field between resourceful and less resourceful political parties getting disturbed and number of candidates owing big resources increasing over the years, he said, it "enhances their (resourceful candidates) chances of winning as compared with less resourceful parties and candidates."

He also underlined the need for a proper law to regulate electoral trusts as "donations by corporates and private entities can lead to favourable policies... (by the politicians for the donors)"

"Quid pro quo to such contribution is not ruled out. Now, there are several issues. Should these funds from trusts help in better management and planning of political parties? Or should they be an additional tool to winning elections because they widen the gulf between the resourceful and less resourceful parties. These are issues that need to be considered," he said.

"The legal regime for regulation of trusts does not even exist under the Representation of the People Act. Trusts are not required to maintain, audit and publish their accounts.

"There are no declarations or disclosure requirements for electoral trusts nor there is any penalty for non-compliance of these requirements...there is no provision that bars trusts from receiving foreign funds and in the EC we have suggested a law on this aspect otherwise foreign funds can find a route through electoral trusts and we are receiving complaints in this regard," he said.

He said public trust was "eroding fast" when it comes to the question of political and public morality in democracy.

"Quality of representation from different sections of society is also being compromised. The answer to all these questions and implications lie in regulating resources and their use by political parties and candidates," he said.