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4.3.1. This part of chapter relates to proposal for state
funding of elections put forward in the working paper. The
working paper had reiterated the proposals contained in the
Dinesh Goswami Bill of 1990 which, as has been stated
herein before, was based upon the consensus of all the
political parties.
4.3.2. It is necessary at the outset to refer to Inderjit
Gupta Committee which was appointed by the Parliament to
got into the question of state funding. The Committee has
also recommended partial state funding of political parties
more or less on the lines of the Dinesh Goswami Bill 1990.
4.3.3. Views of participants in seminars considered. Shri
Som Nath Chatterjee, who presided over the session devoted
to 'Election Expenses and State Funding' in the National
Seminar held on 24.1.1999 supported the idea of state
funding. (Hew as a member of the said Committee.) Mr.
Chatterjee referred to a 1971 Parliamentary Committee known
as 'Jagannadha Rao Committee' of which S/Shri. Atal Bihari
Vajpayee and L.K. Advani were members besides himself,
which Committee had also recommended state funding. He
referred to the deliberations of the Committee appointed by
Shri Jayaprakash Narayan, provisions of Dinesh Goswami Bill
and to the recommendations and resolutions of the
Inter-Parliamentary Council (at which all parliamentarians
were represented), held in May 1994. All of them
recommended the idea of state funding. Mr. Chatterjee
referred in some detail to the contents of the Inderjit
Gupta Committee Report recommending partial state funding
of the recognised political parties; both at the national
and state levels. The recommendations made, he said, were
designed to meet the unavoidable expenditure required to be
incurred by each political party though it may not satisfy
their total requirements. Such a course, he said, will
help the bona fide candidates. He also expressed himself
in favour restrictions being placed upon ostentatious
expenditure on elections including on cut-outs, banners,
arches, public meetings and so on. According to him, the
proposals of the Inderjit Gupta Committee Report represent
a good beginning though they do not exclude private funding
of the political parties. He also supported the idea of
creating a state fund, as recommended by the Inderjit Gupta
Committee. This fund should have a reserve of six hundred
crores. The said amount, he said, was fixed keeping in
mind the rate of rupees ten per elector. Mr. Chatterjee
also stressed the importance and necessity of vigilance by
public, media and all other organisations interested in
public welfare.
4.3.3.1. Shri K.K. Venugopal, senior Advocate, was
also of the opinion that time had come for seriously
considering the state funding of elections. He referred to
the fact that in several countries such a practice was in
vogue. He pointed out that in no case, money as such
should be paid to the candidate or to a political party.
Only certain material, which was necessary for every
political party to convey its message and its programme to
the electorate should be provided. If the state funding
was in the shape of cash, he opined, millions of candidates
would come forward to contest elections only for the sake
of money. He also referred in this connection to the
practice in England where free television time was made
available by BBC and by independent television companies.
Postal communication was also accessible free of charge to
the candidates. Council halls are made available for
holding the meetings. The cost of printing and compiling
of the registers were all paid by the State. He then
referred to the French electoral system which he said is
the most generous in this respect. Money is not given
there directly by the state but pamphlets, leaflets,
posters, handbills and other publicity material including
election manifestos and statements are printed by the state
machinery at the specific request of the candidate.
Vehicles including oil and petrol are provided by the
State. Help was extended to the candidate to organise
public meetings and public address systems. Radio time and
television time was also made available to a candidate free
of cost. Turning to India, Mr. Venugopal said that the
problems confronting the country were very acute and that
election funding on a major scale could not be undertaken
at the cost of poverty, primary education, primary health
care, population control, clean drinking water, creation of
employment and so on. He opined that any deprivation in
these areas would negate the very socialist democratic
foundation of the nation. While commending the proposals
of the Law Commission in this behalf, he referred to France
again where, with a view to preventing a large number of
independent candidates from taking advantage of state funding, it has been provided that every candidate
receiving State funding shall execute a bond and also
furnish a bank guarantee for the financial support extended
to him so that in case he got less that 8 per cent of the
total votes polled, he would forfeit his bond and money
would be recovered from the guarantor. He was of the
opinion that such a provision should be made in the Indian
law also, if state funding was to be provided. Such a
course, he submitted would prevent a host of candidates
appearing on the electoral scene and, at the same time, would render great service to democracy by providing a
level playing field to all the persons who genuinely
desired to serve the nation as representatives of the
people. He submitted that the existing professional
politicians alone could not represent the people and that
it was necessary to bring into existence a new generation
of educated individuals who desired to serve the country.
4.3.3.2. One of the participants suggested that it
should be open to private individuals and other bodies to
make contributions to the Election Fund and that
contributions thereto should be exempt from income-tax.
While some of the participants wanted the State funding to
be restricted to recognised political parties(RPPs), some
others suggested that it should be extended to all the
candidates. As a matter of fact, there was a sharp
division of opinion, in this session, on this question.
4.3.3.3. At the seminar held on 14th November, 1998
too, these proposals had elicited mixed response.
At the Banagalore seminar, some of the participants
suggested that if the state funding was to be introduced,
it must be made conditional upon internal democracy being
assured within the political party. To the same effect
were the opinions expressed at the Thiruvananthapuram
seminar. In the responses received to the working paper,
differing opinions were expressed. While some members
agreed with by the opponents of this proposal is that such
a course would place an unwanted burden on the public
exchequer and that unless other proposals relating to
maintenance of accounts etc., were also given effect to,
state funding should not be resorted to.
4.3.4. Conclusions - After considering views expressed by
the participants in the seminars and by various persons and
organisations in their responses and after perusing
relevant literature on the subject, the Law Commission is
of the opinion that in the present circumstances only
partial state funding could be contemplated more as a first
step towards total state funding but it is absolutely
essential before the idea of state funding (whether partial
or total) is resorted, the provisions suggested in this
report relating to political parties (including the
provisions ensuring internal democracy, internal
structures) and maintenance of accounts, their auditing and
submission to Election Commission are implemented. In
other words, the implementation of the provisions
recommended in Chapter one Part three should be a
pre-condition to the implementation of the provisions
relating to partial state funding set out in the working
paper in the Law Commission (partial funding, as already
stated, has also been recommended by the Inderjit Gupta
Committee). If without such pre-conditions, state funding,
even if partial is resorted to, it would not serve the
purpose underlying the idea of state funding. The idea of
state funding is to eliminate the influence of money power
and also to eliminate the influence of money power and also
to eliminate corporate funding, black money support and
raising of funds in the name of elections by the parties
and their leaders. The state funding, without the
aforesaid pre-conditions, would merely become another
source of funds for the political parties and candidates at
the cost of public exchequer. We are, therefore, of the
opinion that the proposals relating to state funding
containted in the Inderjit Gupta Committee Report should be
implemented only after or simultaneously with the
implementation of the provisions contained in this Report
relating to political parties viz., deletion of Explanation
1 to Section 77, maintenance of accounts and their submission etc. and the provisions governing the
functioning of political parties contained in chapters I
and II of Part IV and chapter I of Part III. The state
funding, even if partial, should never be resorted to
unless the other provisions mentioned aforesaid are
implemented lest the very idea may prove counter-productive
and may defeat the very object underlying the idea of state
funding of elections.
4.3.5. It is desirable that total state funding should be
introduced but on the condition that political parties are
barred from raising funds from any other source. In this
chapter, we have proceeded on the assumption that only
partial instead of total state funding is feasible in the
prevailing economic conditions in the country.
4.3.6. In the Inderjit Gupta Committee report on State
Funding of Elections also, it has been recommended -
" 6.14 The committee, therefore, sees full
justification constitutional, legal as well as on
ground of public interest, for grant of State
subvention to political parties, so as to establish
such conditions where even the parties with modest
financial resources may be able to compete with
those who have superior financial resources, on a
level with a fair chance of success at the
hustings."
The committee also emphasised that such funds could
not be doled out to independent candidates and that such of
the registered parties as had secured recognition as
national and State parties under the Symbols Order on the
manifest demonstration of their popular support among the
electorate for State sunvention. We concur with the
suggestion.
4.3.6.1. On the issue as to whether full or partial
State funding should be admissible, the said Committee
further observed:
"Para 9.1. Given the budgetary constraints and
financial stringencies being faced currently by the
country, compounded by the recent economic
sanctions imposed by certain foreign countries,
sparing or diverting from the meagre financial
resources of the country at this juncture, huge
funds that may be required to provide full State
funding to political parties will neither be
advisable nor feasible. A harmonious balance has
to be struck. Therefore, to being (sic) (read
instead "begin") with political parties may have to
contend with only partial funding by the State."
The Committee further recommended that for the
present, only part of the financial burden of political
parties may be shifted to the State. This should be so
done that it provides them relief not only in carrying out
their electoral activities and meeting partly the cost of
essential items of electioneering campaigns of their
candidates but also helps them partially in the current
administration of their day to day functioning during
non-election period.
4.3.6.2. The Committee recommended that, to begin with,
State subvention may be given only in kind, in the form of
certain facilities to the recognised political parties and
their candidates.
4.3.6.3. The Committee underlined the need to curb
the mounting expenses of parties and candidates and
ostentatious show of money power by them, by placing
reasonable restrictions by law in respect of all or any of
the following matters:
(i) Wall writings;
(ii) Display of cut-outs, hoardings, banners;
(iii) Hoisting of flags (except at party offices,
party offices, public meetings and other
specified places);
(iv) Use of more than a specified number of
vehicles for election campaigns and fro
processions;
(v) Announcements or publicity by more than a
specified number of moving vehicles;
(vi) Holding of public meetings beyond the
specified hours;
(v) Display of posters at places, other than
those specified by the district/electoral
authorities.
4.3.7. We reiterate all the recommendations made in the
Indrajit Gupta Committee Report subject to the reservations
made in para 4.3.4. So far as the Explanation I to section
77 (1) of the Representation of the Peoples Act 1951 is
concerned, we have already recommended its deletion.
4.3.8. As a post-script, we may also refer to the report
of the Committee on Standards in Public Life (the Neill
Committee: Cmd. 4057) submitted on October 13, 1998 by
that Committee to the Government of the United Kingdom.
They have made several proposals, inter-alia, for
regulating the election expenditure as well as for making
auditing and accounting rules for political parties. The
proposals are generally aimed at encouraging (i) more
openness about the sources and use of party funds; and (ii)
greater public confidence that individuals and
organisations were not buying influence with political
parties.
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