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State funding of elections is a bad idea!

August 13, 2012

I continue to completely reject State funding of elections despite the fact that, IF done right, it can attract talent to politics by somewhat lowering the high entry barriers imposed by our first-past-the-post electoral system.

(NOTE: To substantially reduce the ‘need’ for state funding and for other massive benefits, we NEED to change our electoral system from FPTP to proportional representation).


State funding can make politics a profitable (or less loss-making) profession even for honest people. Currently, honest politics is very high risk-very low reward and that keeps our best minds away. The argument is that if we can change this, we can gradually change India!


2 broad issues with campaign finance:

  1. Honest youngsters are unable to choose politics as a profession since winning an election requires immense time, effort, talent AND money. Even if they win, the cash remuneration is not great (though we waste a lot of money on rent-free bungalows and other perks to MPs).
  2. As a result, only very rich/connected/dishonest people compete in elections. This also means that, once elected, they indulge in corruption to recover the ‘investment’. Honest people can join politics only after they have made enough money in some other profession.

If we can fund the election campaign of ‘serious’ candidates, our politics will attract some talent making politics more competitive (also forcing all politicians to shape up).

How to fund elections?

Post elections, all candidates who receive atleast 5% votes (to discourage non-serious candidates) should be reimbursed a fixed sum per vote, say Rs. 20 per vote. It can also be dependent on % of votes received. eg: No payment for the first 5%, Rs 15 per vote for the next 5%, Rs 20 per vote for 10-20%, Rs 25 per vote thereafter. To limit costs, there can be a upper limit to reimbursement per candidate. The per vote funding may be reduced for candidates who have been funded before or those who have been elected before. Will also need tax exemption for income from state funding 🙂

How will this help?

  • Consider a honest, patriotic, intelligent and hardworking youth making a career choice. State funding will make it easier for him to join politics.  Politics need to attract talented people, not just crooks. Even if one loses an election or two, he can improve and fight as long as he gets 5% votes.
  • People get to vote for honest people, hopefully, leading to higher voter turnout.
  • Reasonable spending by all serious candidates will ensure a well-informed electorate somewhat reducing the advantage to the guy spending obscene amounts of money

Limitations/negatives of state funding:

  • Like all govt intervention, a harmful version of state funding (see ‘Bad Ideas’ below) is and will be eventually implemented. This is enough reason to oppose it.
  • Costs money! Assume 3 elections in 5 years, 50 crore Indians vote per election, Rs. 20 per vote. Max cost is 3000 crores per 5 years. Not very high IF this can change things.
  • Honest people will be able to compete but may still not win since money will continue to play an important role in elections and given FPTP’s high entry barriers. The massive amounts currently spent on most election campaigns will only increase since state funding will be available to all.
  • Votes splitting amongst higher no. of ‘clean’ candidates in 1 constituency might allow the big guys to win with an even smaller vote share! The power of vote-banks will increase giving politicians more incentive to polarize votes on the basis of caste, religion and similar issues!
  • Some increase in ”paid news’ since elections will become a bigger market for media
  • The ‘price’ of election tickets for established parties will increase further.
  • To manage costs, the state can only fund candidates who poll a certain minimum % of votes. A poor candidate will still need to risk electoral failure leading to unpaid debt.

Beware of BAD IDEAS on state funding of elections:

  • Fund all candidates or all ‘new’ candidates – this will attract too many non-serious candidates
  • Fund only state / national political parties or only existing representatives – it discourages independents, smaller parties and new faces who need the funding the most
  • Let the taxpayer choose (via his return of income or otherwise) which candidate will receive his share of the total state funds – the problem is poor people (who pay indirect taxes but do not pay income tax) won’t get to choose …if they do, there will be serious admin/ cost issues in collecting and updating this ‘fund allocation’ opinion from the public. Finally, who will fund my campaign to persuade voters to allocate funds to me?

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