Report No. 255

C. Laws Regulating Election Expenditure, Contributions, and Disclosure

(i) Laws regulating election expenditure for candidates

2.19.1. Limits on electoral expenditure for contesting candidates have been set out in Section 77 of the RPA and the Election Rules, 1961, reproduced below:

"Section 77: Account of election expenses and maximum thereof-

(1) 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 subsection.

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

2.19.2. Section 77(3) of the RPA limits the electoral spending by candidates within the limits prescribed by Rule 90 of the Rules, stipulating the maximum election expenditure that can be incurred by a candidate in a parliamentary or assembly election. By the recent Conduct of Elections (Amendment) Rules, 2014, notified on 28th February 2014, the limit for candidate expenditure is between Rs. 54-70 lakhs for parliamentary constituencies, and between Rs. 20-28 lakhs for assembly constituencies.26

The incurring or authorising expenditure in violation of Section 77 amounts to a corrupt practice under Section 123(6) of the RPA and can result in disqualification for a maximum period of six years, both as a candidate and a voter, under Sections 8A and 11A. Section 10A additionally provides for disqualification for failure to lodge accounts of election expenses.

26. ECI, Conduct of Election (Amendment) Rules 2014, No. 3/1/2014/SDR-Vol.-III, 5th March 2014,
<http://eci.nic.in/eci_main1/current/ImpIns1_06032014.pdf>