Unfair demand

Election Commission must review its call on cash withdrawal

The Election Commission and the Reserve Bank of India (RBI) appear to be engaged in an unseemly battle over the desirability of relaxing the limits on cash withdrawals by candidates in the forthcoming Assembly elections in five states. Last week, the commission advised the central bank that candidates in the electoral fray be allowed to withdraw cash up to Rs 2 lakh a week, against the current restrictions of Rs 24,000 for all savings bank account holders. The relaxation was justified by the commission on the ground that candidates would thus be able to meet their poll expenditure. In response, the RBI said increasing the cash withdrawal limit was neither desirable nor possible. This apparently logical response, however, evoked a strong reaction from the Election Commission as it took serious exception to the central bank’s refusal to comply with its order. It noted that the RBI had not realised the gravity of the matter, reminding the central bank that it was the commission’s constitutional mandate to conduct free and fair elections.

It is unfortunate that two of the country’s most venerable regulatory institutions are involved in an unedifying debate where one is seeking to defend its constitutional right to conduct elections and the other is citing the impracticality and unfairness of the kind of relaxation that is being sought. In reality, however, the issues are not that complex. Of course, the Election Commission is within its rights to ensure conditions that allow free and fair elections. But what it also needs to consider is whether it is necessary to allow candidates contesting elections to withdraw more cash than the limit imposed on ordinary citizens. If businesses, traders and ordinary citizens, including voters, can make do with the limits imposed by the RBI on their cash withdrawals for the last several weeks by switching over to greater use of digital transactions and payment through cheques, there is no reason why candidates seeking votes in the forthcoming elections also should not follow the same principle by going digital or using cheques for their various poll-related payments.

The question the Election Commission must also answer is whether the preferential relaxation in the cash withdrawal limit for candidates will amount to unfairly treating the rest of the country, which continues to work within the limit imposed by the RBI. Indeed, instead of seeking the relaxation, it should have advised candidates to embrace digital payment modes to contribute to the success of the government’s digital campaign. There is yet another reason why the Election Commission should reconsider its suggestion to the RBI; relaxing the cash withdrawal limit for candidates will be prone to misuse as monitoring the withdrawal of cash from different bank accounts will pose a challenge. More worryingly, this could provide an undesirable boost to greater use of cash by candidates to seek recourse to illicit methods of influencing voters, thereby ironically undermining the very goals of holding free and fair polls. Instead of escalating the current tension, the Election Commission will do well to see the logic in the RBI’s reluctance to make preferential relaxation in cash withdrawal norms for poll candidates and defuse the crisis through necessary consultations with the central bank.