efect of election on economy

1. Effects of Election on
Economy
Vikas Singh
Prakash
Praveen Kr. Dinkar
Manish Rathore
Ravi Singh
Priyanshu Barua

2. Introduction
India is a constitutional democracy
with a parliamentary system of
government, and at the heart of
the system is a commitment to
hold regular, free and fair
elections. These elections
determine the composition of the
government, the membership of
the two houses of parliament, the
state and union territory legislative
assemblies, and the Presidency and
vice-presidency

3. Indian Electoral Process
There is a government at the Central level that makes policies and gets implemented.
The legislative or law making body at the centre is called The Parliament.
The Parliament consists of the Council of states Rajya Sabha or Upper house and the house of the people Lok
Sabha or lower house
Each state or UT is further divided into Parliamentary constituencies.
India is also divided into areas according to population there are 545 Parliamentary constituencies in the
country
for example there are 26 Parliamentary constituencies or PCs in Gujarat
when we vote in Lok Sabha general election we elect a member of parliament (MP) from each Parliament
constituency

4. These MPs from the Lok Sabha 543 elected members of the Parliamentary constituencies plus two
members of Anglo Indian community nominated by the President of India forms the Lok Sabha or lower
house.
Each parliamentary constituency consists of few assembly constituencies.
All the Assembly Constituencies is put together in a state form the Legislative Assembly of the state or
The Vidhan Sabha.
When we vote for our Vidhan Sabha general election we are voting for MLA is a member of legislative
assemblies who will form the state government.
Parliamentary constituencies consists of several assembly constituencies.
for example- assembly constituencies(ACs) of Gandhinagar PC
Gandhinagar PC has seven ACs within it
Gandhinagar North AC is 1 AC within Gandhinagar PC

5. Each constituency is divided into polling station( PSs) where we go to vote.
Ex. Gandhinagar North AC has number of PSs.
Each state is governed by its own Legislative Assembly from these constituencies
members of Legislative Assembly (MLA) are elected in the state assembly.
Elected members of the Legislative Assembly elect the members of the Rajya
Sabha( Upper house)
Lower house + Upper house = Parliament

6. How can a political party be funded?
There are various
methods of getting a
political party funded.
Most popular methods
of funding of political
parties, by individual
person, public funding
and corporate funding

7. 1. Public funding or State funding
State funding or Public funding is where the Government provides funds to
political parties for election related purposes.
State funding can be of two types
1. Direct funding
2. Indirect funding

8. 2. Corporate funding
Corporate funding correspondence to
the funding of political parties by
corporate bodies in India. It has been
ordered that most of the donations to
political parties are made by
companies. In the year 2013-14, 90% of
funds of political parties came from big
corporations in the country.

9. Donation by corporate bodies in government by the Companies Act, 2013 section
182 of the act provides that :-
1. Acompany need to be at least three years old since the date of its existence to
be able to donate to a political party
2.Companies can donate a maximum of 7.5 % of the average net profit they made
during 3 years immediately preceding financial years
3. Such contribution must be disclosed in the profit and loss account of the
companies.
4. No contribution shall be made without obtaining the approval of the board of
directors by passing a resolution.
5. If a company contravenes the provisions of this section, it may be held liable
to pay fine which may extend up to five times the amount of contributed in the
default and officer is guilty of such contravention may be imprisoned for a
term which may extend to 6 months and with fine which may extend upto 5
times the amount contributed in default.

10. Electoral Trust in India
Electoral trust is a non-profit company established to receive voluntary fund is
subject to receive voluntary funds is subject to section 29 B of the
representatives of the People Act 1951 and donate the same to the political
parties.
The electoral trust may donate at least 95% of the contribution required to
political parties for campaigning.

11. Limits on Expenditures by Political
Parties
The maximum expenditure by a political party
in an election is governed by Rule 90 of the
Conduct of Elections Rules, 1961. Earlier, the
limit set was considered to be lower than
necessary. In fact, experts were of the view
that the lower limits invite under-reporting of
the actual expenses incurred, leading to
dishonesty in one of the very fundamental steps
of the democracy of India, i.e. elections. After
the amendment done in the year 2014, the
limits set by the new rule are:

12. 1. The maximum limit of election expenses in the Parliamentary
constituency is Rs.70,00,000/- for all the states except Arunachal
Pradesh, Goa and Sikkim, for which the maximum limit is Rs.54,00,000/-.
For Union Territories, the maximum limit is set at Rs.54,00,000/- except
Delhi, the maximum limit for which is Rs.70,00,000/-.
2. The maximum limit of election expenses in Assembly constituency
varies from Rs.20,00,000/- to Rs.28,00,000/- in varies states and UTs
wherever applicable

13. Section 77 of the RPA further clarifies as to what comes
under the purview of ‘expenditures of the party’. The
expenditures by a political party include all expenditures
incurred by the candidate of such party or his authorised
agent in connection with the election since the date of his
nomination till the date the result is declared. An account
shall be maintained of such expenditures by the candidate
himself or his authorized agent.

14. All the political parties contesting in Lok Sabha assembly election are
required to maintain thetotal funds collected during the election period
from the date of announcement of election till thedate of completion in
cash ,cheque and in kind. Similarly they are also required to maintain the
Total expenditure incurred in cash and cheque during the same period
apart from various heads under which the funds were spent. These has
include publicity, travel an candidate and other expenses.
The contesting political are required to file their expenditure statement
to the election commission of India in the format specified by the
commission within 75 days of assembly election and 90 days of Lok Sabha
elections.

15. Positive Impacts of
Election

16. 1. Infrastructure Development
During the election government will done infrastructural work for the
public like Road, street lights, Park etc. for collecting votes.Government
also give the order for the accomplishment of incomplete projects before
the election for publicity. During election government started so many
policies and campaign in state to state for which local authorities also
focused on infrastructure.

17. 2. Employment opportunities
Election is a costly and time consuming process. During
election government spend a huge amount on advertisement
transportation policies etc. So government hiring peoples for
completing these works and providing short term
employment.

18. 3. A vibrant democracy create some
positive image of country
This ensures social harmony, order and peace in the society.
In election every people have voting right who is above 18
years.It shows the equality of people in society.A bad law
and order situation and frequent closeness in society are bad
for economy

19. 4. Generate revenue for Media Houses
During election time for huge amount of Expenditure is done by the
government. In which a huge amount is spend on advertisement like
posters, banner, electronic advertisement etc. The advertisement in
print and electronic media generates revenue for media houses, thereby
boosting the economy

20. 5. More Activism of government
Before election the government will work more actively.
Government always tries for attracting the people during the
election through the changes in policy and administration.
For example recently government decided the merger of
Vijaya Bank Dena Bank and Bank of Baroda for controlling
the NPA.

21. 6. Promoting welfare schemes
Government promote the welfare schemes for attracting the
people during election for example recently finally finance
minister increase the interest on small investment schemes
like public provident fund provide 7.6 % interest but now it
increasing at 8% .Sukanya Samriddhi Yojna also increased by
0.4% and providing 8.5%.

22. Negative Impacts of
Election

23. 1. Impact on governance due to
imposition of Model Code of Conduct
The Model Code of Conduct (MCC) is a set of norms that
lay’s down several do's and don't that political parties,
consisting candidates, parties in power have to strictly abide
by during the election.

24. 2 Massive Expenditure by Government
Elections lead to huge expenditure. Every year the Government of India
and /or respective state government bear expenditure on account of
conduct and supervision of election.

25. 3. Vote Buying
Elections are rumored to be very expensive in India and analysts
frequently speculate that with each passing year, the cost
of campaigning are rathering further upwards. The perceived increase in
campaign costs is often assumed to mean that bribes -what political
scientist refers to as “vote buying”.

26. 4. Investment Declines
It is directly related to the perception of investors towards the result of
the election. Usually at the time of election investors tends to play safe
and tries not to in wear the level of money invested in the country.

27. 5. Inflation
Government spending is usually opportunistic ahead of elections, the spike in
spending fails to lift the economy and instead stokes the fires of inflation.
Inflation measured by the gross domestic product deflator spikes up around
national elections . The average inflation during election years is 8.56% since
1980, compared with 7.55% for non-election years.

28. Simultaneous
Election
System
Simultaneous election is a political
proposal in India by which national
elections i.e. Lok Sabha and the
state elections i.e. State legislative
assemblies would be conducted at
the same time.

29. Favors of Simultaneous
Elections
1 Efficiency of government.
2 Cost Reduction in elections.
3 Stability In Elected bodies.
4 Transparency about the new government.
5 Time reduction in Election

30. Challenges with the System
1. Mammoth task to accomplish
2. Diversity in election result
3. The risk of centralization of power in one party

31. Thank You !