In India, the unrealistically low limits set by the Election Commission of India on campaign spending by political parties and candidates can be attributed as one of the reasons that have fuelled the black money economy.
In theory, State funding would provide a level playing field for political
parties and cut out
money power from the equation,
but in practice things may not work out so linearly.
So long as India's politics is systemically
dependent on unaccounted money for its finances, there can be no decisive political will to eradicate black money.
Political parties spend huge amounts of money every year and even more in election years. They report income that is only a fraction of what they spend.
When the bulk of their spending is financed by unaccounted income, it compromises the integrity of governance, suborns the civil service, promotes crony capitalism
and makes managing the government a decisive
core competence of entrepreneurship.
All this will change if the sources of political funding are made fully transparent.
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