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Contesting elections in India is becoming progressively expensive each year, a trend underscored by data. According to the Election Commission of India (ECI), between FY14 and FY23, total poll spending by all political parties amounted to ₹15,647 crore. Of this, the Bhartiya Janata Party (BJP) accounted for 55 per cent of expenditure, followed by the Indian National Congress (INC) and the Communist Party of India - Marxist (CPI-M) with 30 per cent and 6 per cent share, respectively.
The annual expenditure of national political parties encompasses the total funds spent on both state assembly elections and Lok Sabha (LS) elections.
Prior to assuming power, the BJP’s share in total poll expenditure of all parties, stood at 29 per cent in FY2013-14. However, subsequent years saw a gradual increase, reaching 48 per cent share in FY2014-15, 53 per cent in FY2019-20 and peaking at 66 per cent in FY2022-23. In contrast, the INC, during its tenure, exhibited a higher share of poll expenditure of 58 per cent in FY14. Nevertheless, its spending progressively declined, registering a share of 40 per cent, 32 per cent and ultimately 22 per cent in the corresponding years.
Overall, election expenses in India have been sharply increasing. Over the past ten years (FY14 to FY23), all national political parties combined have spent a total of ₹15,647 crore. The highest spending was recorded in FY20, at ₹3,073 crore. It was the year when the LS election was conducted. BJP and INC were the largest spender.
Sarthak Bagchi, Assistant Professor at the School of Arts and Sciences, Ahmedabad University, said, “In Indian political financing law, there is no limit on party expenditure, but there is a cap on candidate expenditure. This loophole grants parties the advantage of spending significant sums on their campaigns, which can be a major contributing factor to higher overall expenditure.”
According to the Centre for Media Studies (CMS) report, the 2019 LS election witnessed the highest poll-bound expenditure due to a significant influx of funds donated to political parties through electoral bonds. Unlike other transparent means of donation, which impose a cap of 7.5 per cent of three-year average profits’ of any company, electoral bonds did not have such limitations. Consequently, corporates were able to contribute substantial amounts of money to political parties, resulting in a surge in donations during the 2019 LS election cycle.
The BJP’s expenditure surged from ₹714 crore in the 2014 LS election to ₹1,264 crore in the 2019 LS election. Conversely, the Congress’s expenditure rose from ₹516 crore to ₹820 crore during the same period.
The analysis of the annual audit reports of the BJP and INC for the previous two LS elections from the ECI reveals that both parties primarily allocated their funds towards media advertisements, travel expenses and candidate expenditures.
The data from ECI indicates that the BJP’s expenditure on media advertisements increased from ₹289 crore in the 2014 LS election to ₹460 crore in the 2019 LS election, representing a growth of 34 per cent. Additionally, travel expenses rose from around ₹160 crore in 2014 to ₹247 crore in 2019, marking a substantial 54 per cent growth.
The INC also demonstrated increased expenditure, with its spending on media advertisements rising from ₹289 crore in the 2014 LS election to ₹411 crore in the 2019 LS election. Moreover, its expenditure on candidates experienced significant growth, increasing from ₹29 crore in 2014 to ₹193 crore in 2019.
Bagchi points out the main reason for higher expenditure in certain categories of expenditures, “Travel expenditure and media advertisements are inherently interconnected, as political parties frequently utilise expensive modes of transportation, such as helicopters, to move between constituencies. Simultaneously, they advertise their travel schedule in regional or local newspapers to capture voter’s attention during campaigns. This extensive advertising linked to travelling incurs substantial costs for political parties in India.”
The media investment firm, Group M, anticipates that the 2024 LS election will result in a 10.2 per cent increase in advertising spending by political parties in India.
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