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  • Regulating electoral funding in India to increase transparency

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    Mansi Gupta
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    The document discusses electoral funding in India and proposes regulating it through a "public utility" approach. It outlines three phases of funding regulation since 1947 and notes that over 1.57 trillion rupees have been collected by national parties from unknown sources from 2004-2005 to 2021-2022. It analyzes rent-seeking behavior between political parties and corporate donors using game theory. The impacts of off-the-book transactions are discussed. A typology model compares different jurisdictional approaches and a public utility approach for India is proposed, focusing on transparency, empowering the Election Commission of India, and limiting expenditures and sources of funding.

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    The document discusses electoral funding in India and proposes regulating it through a "public utility" approach. It outlines three phases of funding regulation since 1947 and notes that over 1.57 trillion rupees have been collected by national parties from unknown sources from 2004-2005 to 2021-2022. It analyzes rent-seeking behavior between political parties and corporate donors using game theory. The impacts of off-the-book transactions are discussed. A typology model compares different jurisdictional approaches and a public utility approach for India is proposed, focusing on transparency, empowering the Election Commission of India, and limiting expenditures and sources of funding.

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    © All Rights Reserved
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    8 views12 pages

    Regulating electoral funding in India to increase transparency

    Uploaded by

    Mansi Gupta
    The document discusses electoral funding in India and proposes regulating it through a "public utility" approach. It outlines three phases of funding regulation since 1947 and notes that over 1.57 trillion rupees have been collected by national parties from unknown sources from 2004-2005 to 2021-2022. It analyzes rent-seeking behavior between political parties and corporate donors using game theory. The impacts of off-the-book transactions are discussed. A typology model compares different jurisdictional approaches and a public utility approach for India is proposed, focusing on transparency, empowering the Election Commission of India, and limiting expenditures and sources of funding.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 12

    Electoral Funding in India:

    Increasing the costs of


    representative democracy
    Mansi Gupta (2487)
    Introduction
    Aim and Objective
    • To establish electoral funding as a means of co-optation of
    business interests in politics through political parties
    • To recognize the core objectives for regulating the campaign
    finance and propose a model of regulation for political parties

    Thesis
    • A ‘public utility’ approach for electoral funding which limits
    private financing of election and follows a stringent disclosure
    mechanism for political parties.
    • Treating Political party akin to state agency
    Phases of Funding Regulation

    01 02 03
    1947-1990 1990-2003 2003 onwards
    Laws framed but no State funding, Common RTI, Disclosure,
    proper laws on donations Cause decision Electoral Trust, Bond
    Scheme
    1,57,70,00,00,000
    Funds collected by National parties from 2004-05 to 2021-22
    from unknown sources
    Rent Seeking by Market Giants
    Favourable policies
    Rent Seeking
    Donors asking for Tax free donations
    favours

    Twin aspect
    Rent Threat of destruction of wealth

    Extraction
    Govt forcing donors to Heavy regulation
    pay
    Rent Seeking
    Iterated Prisoner’s Dilemma
    ● Pay off in one time interaction would be best in defection
    ● Mutual Cooperation strategy is the best in long run
    ● No certainty who will win, still pays based on speculation

    PLAYERS POLITICAL PARTIES IN INDIA

    CORPORA Strategy Co-operate Defect


    TE
    Co-operate 3,3 0,5
    DONORS
    Defect 5,0 1,1
    Rent Seeking
    Contributions of DLF Group and Bharti Airtel
    Group to electoral trusts(2013-22)
    60

    50

    40
    Amount [In Rs. Cr]

    30

    20

    10

    0
    2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
    Financial Year of Contribution
    Electoral Bonds
     Anonymous
     Foreign Donation
     No cap on corporate
    donation
     PIL pending since 6 years
     Disparity between parties
     Money Laundering and tax
    evasion
    Impact of Off-the-Book Transactions

    01 Economic Costs Kanwar Lal Gupta Case [1974]


    Lower corporate taxes, huge Due to the involvement of money power in
    money wasted – opportunity cost elections “some voters are denied an
    of money
    'equal' voice and some candidates are
    Conglomerate capitalism
    denied an “equal chance.””

    02 Social Costs
    Democracy as Basic structure;
    Violation of Article 19 – Right to
    know;
    EBs as manifestly arbitrary;
    Typology Model: Jurisdictional Analysis

    Market Based Public Utility


    Less restrictions on donations, Heavy disclosure requirement,
    disclosure not very strict, self- cap on contribution/
    regulation by parties expenditure, State funding

    State Coopted Least regulated


    State funding, complete Least disclosures, no caps on
    regulation, discriminatory contribution/expenditure, self-
    towards ruling party, less compliance
    transparency
    Public Utility Approach for India

    01 Transparency 02 Powers to ECI


    • Ban anonymous funding • Make ECI more powerful
    • Complete disclosure of assets • Power to deregister political
    • RTI made applicable
    parties
    • Coordination with other agencies
    • Independent secretariat

    03 Limitations
    • Revised limits of expenditure
    • List down permissible sources
    • Limit corporate donations
    [Art 19 challenge]
    Thanks!

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