Capstone · PGP in Public Policy · May 2026
Breaking the entry barrier
A proposal for how India might finance its elections without pricing ordinary people out of contesting them.
Across the last three general election cycles, spending on Indian elections rose from roughly ₹30,000 crore in 2014 to ₹1.35 lakh crore in 2024. Spending per candidate went from about ₹6 crore to over ₹16 crore, adjusted for inflation. Per capita annual income in India, in the same year, was a little over ₹2 lakh.
The arithmetic is the argument. To be competitive, a candidate must spend a sum that no ordinary earner could assemble — which means the field narrows to those who already have wealth, or who are willing to incur obligations to those who do. That is a barrier to entry, and it feeds the cycles of corruption and concentrated power that follow from it.
E-TRAC — Electoral Transparency, Restrictions and Augmented Contributions — brings together four instruments that are individually familiar and, in combination, are meant to make transparent money cheaper to raise than opaque money.
The system
Four instruments
01
Monitored candidate accounts
Every candidate is assigned a unique ECI-monitored bank account for a specific campaign. Deposits and donations are identity-verified through Aadhaar or EPIC. Only 1% may be held as petty cash; everything else is spent digitally. Account details are published to the electorate, and any surplus is returned to the ECI after the election.
02
Transparent electoral bonds
The bond mechanism returns, without the anonymity that sank it. Every purchase is tied to an Aadhaar or EPIC identity. Bonds come in multiples of ₹1,000, ₹10,000 and ₹1 lakh up to a ₹10 lakh cap, and can only be accepted by a monitored candidate account for a named campaign. Tax exemptions stay, to keep pulling money out of the informal system.
03
Matching donations
The state augments funding for candidates who build a broad donor base. Individual donations under ₹2,000 are matched one-for-one; larger individual and corporate contributions are matched at 10%. Matching only triggers once a candidate has 1,000 unique donors or 0.2% of the electorate, and is capped at ₹1 crore. Candidates worth more than ₹10 crore get no match at all.
04
Contribution and spending restrictions
Total corporate donations to a candidate cannot exceed what that candidate raised from individuals — a corporate anchor that forces attention back onto the electorate. Individual donations are capped at ₹1 lakh for the Lok Sabha and ₹40,000 for a state assembly; corporate at ₹10 lakh and ₹4 lakh. Total account spending is capped at ₹3 crore and ₹1.2 crore respectively.
Cost
What it would take
E-TRAC is designed to be rolled out over five years, beginning with a pilot in local body elections and scaling upward. It leans on infrastructure that already exists — the banking system and the ECI — rather than asking for new machinery.
- ₹150 crore
- Municipal pilot, large metro
- ₹400 crore
- One medium-sized state
- ₹2,500 crore
- A Lok Sabha election
The Lok Sabha figure assumes roughly four eligible candidates per seat, and would mean monitoring more than 8,000 candidate accounts, running the digital bond portal, triggering and auditing matching disbursements, and verifying payback surety bonds.
Honestly
What could go wrong
Shadow funding
Candidates may still spend from outside the system. Mitigated through CAG audits and state funding in kind.
Party spending
Parties may spend on a candidate's behalf. Current law already restricts this to general propaganda.
Extraction
Low-wealth candidates could farm the match through small-donor loops. Mitigated by ECI monitoring of donor patterns.
Consequences
Winners and losers
Better off
- Non-wealthy candidates — a level field for those who are popular without being rich.
- Voters — visibility into who funds their representatives.
- Small donors — their contribution multiplied by the state match.
Worse off
- Corporations seeking quid pro quo — transparency removes the point of the transaction.
- Shadow financiers — the matching incentive pulls money into the formal system.
- Wealthy candidates — the monopoly of wealth is what the design is built to dismantle.