RBI must be pragmatic on election spending

The Reserve Bank of India's (RBI) order to limit the weekly withdrawal to Rs24,000 from savings account, including in poll-bound States, smacks of a lack of understanding of electoral spending. The RBI has done well though, to enhance the ATM withdrawal limits on current account. As the Election Commission of India (ECI) had already urged the Central bank to raise the limit up to two lakh rupees, the latter should have followed the directive. The RBI has clearly not realised the gravity of the situation. Poll pundits say that if the withdrawal limit on savings account is not immediately raised, it could lead to false declaration of expenses by many candidates. It will also allow malpractices throughout the elections in five States of Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur. The RBI should have engaged the ECI in a detailed discussion before taking the decision. Though the bank is working under severe stress since the unfolding of demonetisation drive, yet it should have acted in a pragmatic manner on savings account withdrawals.

Simply put, a bare minimum of thousands cannot be sufficient to meet poll expenses for a week. The bank should reconsider its order as the Assembly elections in Punjab and Goa are due on February 4. If this is not revised now, poll candidates in these States will face a financial crunch. Also, if the RBI does it at a later date, it will be advantageous to candidates contesting in the rest of the country. The issue could rake up legal battles between the two top agencies of the Union Government. Already, the ECI has in a communication to the RBI stated that “it is the constitutional mandate of the ECI to conduct free and fair elections, and provide a level playing ground to all the candidates”. It underlines the idea that the bank is violating, or rather interfering in the very objectives of the poll panel. Meanwhile, if at all the RBI does not move from the red line, the ECI can use its power under Article 324 of the Constitution of India, to issue a directive to the former to ensure compliance. Why should there have been this showdown between the RBI and the ECIIJ Does it indicate further troubles for the ECI in conducting polls coming up in the futureIJ

Needless to say, the powers and functions of the ECI are precisely delineated. In such a case, knowing fully well about the fallout of such a decision, the RBI should have restrained from moving in the current direction. Further, such seasonal steps should never lead to future confrontation between the two organisations. Ironically, the withdrawal hike was requested in election-bound States by the ECI, only for a specified period, till the declaration of results in March 11. Around the same time, the poll body has also asked the Union Cabinet Secretary to issue strict instructions to the Ministries and departments to refer such matters that could affect the level playing fields of all the poll-bound States for prior clearance from it. Democracy thrives on equality and fairness. There has to be a level-playing field for all parties and candidates.It is the responsibility of the ECI to ensure this happens. While the poll panel has been doing a wonderful job in conducting elections that has left many nations envious, it must not engage in dishing out impractical diktats.