1. How to Improve Transparency of Party/ Candidate funding for Elections and Expenditure : Indian experience 1

2. What is political finance? 2 Party Finance ( Finance of Political Parties not related to election ) Campaign Finance ( Election related finance of Party and candidates )

3. 3 Expenditure permissible under the law [public meetings, posters, banners, vehicle etc.] Illegal expenditure [ Distribution of money, Gifts, liquor or any other item among electors with the purpose of influencing them ] Ceiling for Lok Sabha- Rs 70 lakh ($0.11mn) Assembly –Rs 28lakh ($43,000) Such type of expenditure of election expenses of the candidate is stopped Election expenditure can be classified into two types on the basis of legal provisions INDIAN EXPERIENCE:TYPES OF ELECTION EXPENDITURE Gray Area (Paid News, Freebies in Manifesto)

4. NOTHING OFFICIAL ABOUT IT… Ceiling Limit for a candidate

5. E-filing of accounts by parties and candidates  E-filing introduced (optional) on Pilot basis during Loksabha elections  ECRPs trained by ECI in all states  ECRP fees for e-filing borne by ECI  For the First time e-filing of candidates’ accounts made compulsory in Bihar elections  Time for making e-filing compulsory for Parties 5

6. Party Election Expenditure Party Name Total Expenditure (in rupees crore) BJP712.48 INC486.21 NCP64.48 BSP30.05 CPI(M)8.8 CPI6.72 Table 1: Total Expenditure of National parties in Lok Sabha election, 2014.

7. 7

8. 8

9. 9

10. INDIAN EXPERIENCE  Laws and Rules  Supreme Court Judgments in response to PILs  Model code of Conduct and ECI instructions 10

11. INDIAN EXPERIENCE  Individuals,  Corporates (limit: 7.5% of average profit)  Other entities  Electoral Trusts Political Parties Fund Raising  From Foreign sources  Govt. Agencies  Companies making losses Prohibited

12. 12 Contribution reports in excess of Rs 20,000 ($313) from a single person or entity, filed with Commission (Statutory) Audited accounts to be filed with Income Tax Deptt (Statutory) Election Expenditure statements filed with Commission within 90 days of declaration of result (Court direction) Transparency guidelines for the parties by the Commission INDIAN EXPERIENCE Regulations

13. 13 Name and address of all donors to be maintained excepting cash collected in rallies Cash payment exceeding Rs. 20,000/- ($313) prohibited Cash payment to candidates by parties prohibited Cash donations to be deposited in bank account within 10 days and Restriction on huge amount of cash in hand Copy of audited account to be sent to Commission INDIAN EXPERIENCE Transparency guidelines for the parties by the Commission

14. INDIAN EXPERIENCE  Own source  Political Party  Others (Friends, Well wishers, electors)  No prohibited source for Candidates nor any restriction on amount to be received Candidates Funding and Expenses

15. INDIAN EXPERIENCE Open a separate Bank account (Non-statutory) Maintenance of accounts and Inspection and Disclosure (statutory) Ceiling on Expenditure of candidates (statutory) Election Petition for exceeding the ceiling (statutory) Lodging accounts (both Source and expenditure) with ECI after election (Statutory) Regulations

16. INDIAN EXPERIENCE Disqualification by ECI for not lodging in time or for lodging incorrect accounts (statutory) SC and ECI restrictions on transport of cash during election (Non-statutory) Model Code of Conduct, limiting number of campaign vehicles and campaign days (Model Code) Party to indicate resources for freebies (Model Code) Symbols order of the Commission for recognized Parties Regulations

17. Inducement of voter or any candidate Unauthorised exp. for the candidate Publication in Print media without authorisation Defacement of public property Pre-certification of advertisement in electronic media ( Case Law) Paid News expenditure added to candidate (ECI) INDIAN EXPERIENCE Laws on Corrupt practices and unlawful acts

18. If the areas are not covered under any law, ECI can issue instructions to the candidate and party, which are binding ECI can derecognize a party, under its Symbols Order, if party violates its lawful instructions. ECI Suspended the recognition of a NPP for not filing election expenditure account in time 18 INDIAN EXPERIENCE Plenary power of Commission under Constitution (Art. 324)

19. ECI measures (Click to view video footage)PreventiveMeasures Campaign for ethical Voting through Media Booth level Awareness Group Involving schools/colleges/ CSOs Signing pledge for ethical voting

20. For transparency : ECI measures  ECI uploads all 3 reports of parties on its website for public viewing (Contribution Report, Annual Audited accounts, Election expense report)  Contribution reports of Parties sent to Income tax department, Home ministry and MCA for verification  ECI sends the election expense accounts of Parties to the CEOs to verify with the shadow register maintained during election  Audited accounts of Parties sent to ICAI for verification of Auditors’ discipline  ECI forms Booth level awareness groups with independent citizens and empowers them to capture photos of malpractice and upload to website for ECI action 20

21.  ECI takes videos of Rallies and campaign materials of Candidates and tallies with expenses  ECI Monitors the helicopter or air craft expense of the candidates and parties  ECI also records the media expense of Parties and candidates  Candidates asked to open separate bank account for election expenses  Independent expenditure Observers to inspect accounts of candidates 3 times and upload on the website 21

22. ECI measures Flying Squads to act on complaints Static surveillance Teams to put check post Video Surveillance Team to photograph all events, hoardings Media certifying and monitoring committee to certify electronic advertisement and to monitor Paid News Shadow Observation Register for each candidate Enforcement Complaint Monitoring cell at District level with toll free number Mobile software given to public to upload photos of corrupt practice to ECI website

23. Result of ECI Enforcement Cash seizure Rs.3038 million ($47.46 million) Liquor seizure Rs.65.94 lakh litres (worth Rs.918 million/ $14.34 mn) Drugs seized Rs. 48,004 kg ( worth Rs.8045 million/ $125 mn) 23

24. Measures required for transparency i. Defining third-party campaigners and threshold for registration with ECI ii. Reporting obligations and expenditure limits for third-party campaigners iii. Prohibition on certain sources of funding/ contributions for third-party campaigners (Experience of UK, USA and S. Korea)

25. Measures required for transparency i. E-filing of accounts of Party and candidates made compulsory ii. Separate bank account for Campaign expense of the Political Party during election period iii. Funds received during campaign period by Political Parties and candidates need disclosure during election period iv. Limited Direct State funding of campaign expense of political parties, (media expense or Public rallies) to leverage transparency v. Restraint on receipt of anonymous donations by parties and candidates during election period

26. Thanks