RBI's refusal to hike withdrawal limit may leave candidates with Rs 96,000 in cash during election process

EC has reminded the RBI that as per law, candidates contesting Assembly polls in Uttar Pradesh, Uttarakhand and Punjab can spend Rs 28 lakh each for electioneering.

New Delhi: The Reserve Bank of India (RBI) has rejected the request of the Election Commission to enhance the weekly cash-withdrawal limit, imposed after demonetisation, for those contesting Assembly elections in five states, prompting an angry reaction from the poll panel.

RBI has rejected the EC request stating that it was not possible for it to hike the limit at this stage.

The EC has said that with a weekly withdrawal limit of Rs 24,000, a candidate would be able to withdraw Rs 96,000 in cash during the election process which lasts three to four weeks.

EC also reminded the central bank that as per law, candidates contesting Assembly polls in Uttar Pradesh, Uttarakhand and Punjab can spend Rs 28 lakh each for electioneering.

The limit in Goa and Manipur is Rs 20 lakh each. The poll panel said despite paying amounts through cheques, candidates still need hard cash for petty expenses. Also the issue is further adversely effected in rural areas where banking facilities are negligible.

The poll panel further requested the candidates to incur their election expenses by account payee cheque or RTGS/NEF`T for all payments made to any person exceeding Rs 20,000 during the entire election process.

The Election Commission had last week requested Reserve Bank of India (RBI) to enhance the withdrawal limit of candidates to Rs 2 lakh from Rs 24,000 per week imposed post demonetisation as the nominees would find it difficult to meet their campaign expenditure.

An apparently peeved Commission has now written back to RBI Governor Urjit Patel expressing "serious concern about the cursory manner in which the issue has been dealt with".

"...(It) appears that the RBI has not realised the gravity of the situation...It is reiterated that it is the constitutional mandate of the Commission to conduct free and fair elections and to provide level-playing field to all candidates...In order to facilitate proper conduct of elections, it is imperative that directions issued by the Commission are complied with," the poll panel said.

It urged the central bank to reconsider the proposal.

The EC said the facility be extended till March 11, the day of counting. Candidates are bound to open an election account for meeting poll-related expenditure which is monitored by the EC.

With Agency Inputs