Election-Year Spending and the Model Code of Conduct

How the Election Commission's Model Code of Conduct restricts new government announcements during elections, and how governments time spending and schemes around it.

When elections are announced in India, the Model Code of Conduct (MCC) comes into force.

What the MCC does

The Election Commission enforces rules for parties and governments during elections, including:

No new schemes, projects or financial grants announced by governments.
No laying foundation stones for new projects.
Restrictions on using official machinery for campaigns.
No appeals to caste or religion for votes.

The MCC isn’t a law but is enforced by the Election Commission with Supreme Court backing.

Timing effects

Because announcements stop once the MCC begins, governments often:

Announce schemes and launch projects just before elections are declared.
Transfer benefits, like cash instalments, before the code starts.

Interim budgets

In election years, the central government presents an interim budget or vote on account, usually avoiding major new policies. Some interim budgets, however, have included significant announcements, such as PM-KISAN in the February 2019 interim budget.

Economic effects

Delays in approvals and project starts during MCC periods.
Pre-election surges in announcements and spending.

Debate

Some argue long election periods and frequent state elections mean governments often operate under MCC somewhere, slowing decisions, an argument used for simultaneous elections.

The pre-code rush

Weeks before an election is announced, a state government launches several welfare schemes and inaugurates projects. Once the Model Code begins, new announcements stop until results.

Thinking the Model Code stops all government work

Ongoing schemes continue; the code restricts new announcements and misuse of official resources.

Key takeaways

The Model Code of Conduct restricts new schemes and projects during elections.
Governments often announce schemes just before elections are declared.
Interim budgets usually avoid big changes, though PM-KISAN came in the 2019 interim budget.
Frequent codes are cited in simultaneous elections debates.