Alternate electoral financing: Enhance transparency in political funding

Abstract

India is the largest democracy in India with 900 million eligible voters. The Indian elections have long been plagued by 3Ms (money, muscle and mind). While there have been a lot of talk regarding black money used for drive elections. A major share of these black money are funds generated by political parties. The political parties are completely opaque regarding their source of funds and their public accountability negligible. The purpose of study is to determine the parameters of a transparent system where black money and undisclosed money does not find its way into the election process, thereby influencing election outcome. The use of money in a democracy is analyzed and how it helps reaching the voters. However, there are risks associated too with the use of money in the economy. This leads to unequal playing field and constraints competition which is not fair for a healthy democracy to thrive. The use of money in Indian politics is then analyzed. The paper ‘Cash for Votes: Evidence from India’ sheds light how the use of money to influence election is rampant in India. Data related to elections are analyzed with consumption data during 2004 to 2011. It concludes that during elections consumption pattern of households increased and hence imply the flowing of money to households before elections. The legal framework for an ideal electoral funding is laid down. The current electoral funding procedures in India and Norway are studied based on the framework proposed in this report. The findings of the comparison are discussed extensively. Analyzing the World Happiness Report comparison is drawn between the level of happiness (satisfaction with political system) among India and Norway. A positive correlation is drawn between the level of happiness (i.e. satisfaction with the political system) and the extent of participation of citizens in the electoral process. Recommendations are suggested to set up a more transparent electoral funding process in India bases on our analysis. The legal framework suggested forms the basis of these recommendations. Best practices from Norway are also incorporated in the proposed Indian system. Having derived a causality for the lack of happiness or lack of trust in the electoral process, a solution is tried to be reached to increase citizen participation and hence increase trust of the citizen