How are elections in India financed?

In recent weeks, there has been renewed interest in how elections in India are financed. This is, in part, a reflection of recent events in Tamil Nadu, whose voters cast their ballots today for a new state assembly. Tamil Nadu has long been reputed as one of the most expensive states in which to contest elections in India.

The Hindu reports that the Election Commission of India postponed elections in two constituencies, Aravakurichi and Thanjavur, until “the vitiating effect of the money power created by the distribution of money and gifts to electors loses its intensity and a more congenial atmosphere conducive to the conduct of free and fair election is created.”

It just so happens that E. Sridharan and I recently authored a chapter on the financing of Indian elections that is part of a broader comparative analysis of election financing in democracies around the world. The book, Checkbook Elections, can be ordered here. I have posted a pre-print of our chapter on India here. A policy version of the book’s main findings, including summaries of all the chapters, is posted here.

Here is one of our central takeaways:

Despite the vibrancy of its democracy, India has struggled mightily to regulate political finance in ways that would both contain the costs of elections and curb impropriety in their funding. India does not suffer a dearth of reform ideas; innumerable government sponsored commissions and independent analyses have outlined potential solutions that would improve the credibility of India’s system of regulation. Rather, India’s political finance reform has been stymied by two major factors: a lack of political will for reform, and an economy in which the state exerts a heavy hand, thus incentivizing illicit funding.