April 5: The government is holding election in all 753 local levels on May 13. With 38 days left for the election, experts have analyzed the impact of election on the economy from various angles. 

The Ministry of Finance has allocated a budget of around Rs 9 billion to the Election Commission (EC). The ministry has also given approval to the Ministry of Home Affairs to spend around Rs 10 billion. The Home Ministry will deploy temporary police in polling stations across the country for election security and pay them from the allocated budget. These two government bodies will spend around Rs 19 billion. 

According to Shaligram Poudel, spokesperson of the EC, the amount will be spent on voter education, printing and transportation of ballot papers, election observation and salaries and allowances of polling staff. 

A high-ranking official of the Ministry of Finance estimates that Rs 30 to 40 billion will be spent on local level elections including the expenses of the Election Commission and the Home Ministry. Not only the government, but the political parties and the candidates also spend money for the election campaigns. The EC has issued a code of conduct that does not allow a candidate to spend more than Rs 300,000. However, Gopinath Mainali, former secretary of the EC, says that this code of conduct is not applicable in practice. 

"The code of conduct is just for the sake of formality. Since the commission appoints officials on from political parties, no action will be taken even if the parties and candidates violate the code of conduct," he said. Former Secretary Mainali is of the view that the electoral economy has both positive and negative aspects. According to him, the parties spend a few billion rupees on propaganda and publicity. Even the NGOs and INGOs can spend on voter education. 

Economist Dr Dilliraj Khanal said that apart from the problem of increasing budget deficit and reducing development expenditure, there is a risk of inflation when a lot of money flows into the economy all of a sudden. He said that the election would create short-term employment. However, Khanal is of the view that the election has not had a significant impact on the overall economic growth. 

He sees the election as a threat that is likely to increase liquidity crisis, increase consumption, increase imports and put pressure on foreign exchange reserves. "Increased economic activity has some positive effects on gross domestic product (GDP). However, according to the rules of economics, exports have a positive effect on the economy and imports have a negative effect," he said. Khanal believes that the election will not have much impact on domestic production but it will not have much impact on the economy as imports will increase. 

According to the Election Commission, in the previous election, there was a provision of keeping a deposit of Rs 1,500 when registering for the candidacy of chief of municipality and rural municipality. There is a provision of to exempt half the deposit amount for women, Dalits and people from the minority groups or poor candidates. 

The commission has arranged deposits of Rs 1,000 for ward chairperson and Rs 500 for ward members. If a candidate gets less than 10 percent of the total votes, the deposit will be confiscated. There is a rule that the confiscated amount should be deposited in the state coffers.