The expenditure of conducting the Lok Sabha elections are conducted by the government of India. However, there is no specific limit to the expenses used during the election, but records are maintained by the government officials.

There are no limits on the expenditure incurred by the political parties and large sums of money are raised and spent by them during their election campaigns. The primary function of monitoring is to ensure that the expenditure does not exceed the budget provided by the government.

Election expenditure is broadly categorized into two ways. The first type is the election expenditure, which is allowed under the law for electioneering, subject to it being within the permissible limit. This would include expenditure connected with campaigning like on public meetings, public rallies posters, banners, vehicles, advertisements in print or electronic media etc. The second type is the election expenditure which is not considered under law or is called illegal for eg. Bribing, distribution of alchohol to the voters purposely to gain support etc. The expenditure on such items is illegal.

Election expenditure monitoring mechanism- The election expenditure on day to day basis is guided by putting the election expenditure mechanism in each ward or constituency. It is mandatory to maintain the day to day account and stats of the election expenditure. Though the account of election expenditure is required to be submitted within 45 days from the date of the declaration of the result, the monitoring has to be done on a regular basis during the campaign period for it to be of any use. The election officers collect every details about the expenditure before the campaign and submit all the data and expenses of each party to the Election Commission. Further, there is checking of the data and expenses so make sure everything is correct.

The election expenditure monitoring team is a group of various members who are assigned for a specific purpose. It includes Expenditure Observers (EO),Assistant Expenditure Observers (AEO), Video Surveillance Teams (VST), Video Viewing Team (VVT),Flying Squads (FS),Static Surveillance Team (SST) and Accounting Teams (AT). There are Complaint Monitoring Control Room and Call Centres available for enquiries. The call centre is given toll free telephone number with 3 or 4 hunting lines which is widely publicized for the public to inform corrupt practices related to election.

The Expenditure Observer shall reach the District on the day of the notification of elections for the duration of 3 clear days. During this visit he shall meet all the teams, engaged in election expenditure monitoring. If Expenditure Observer is not satisfied with the performance of AEO (Assistant Expenditure Observer) he/she shall ask for change and the DEA concerned, shall provide additional list of officers; he/she may change AEOs depending on their suitability.He/she shall again visit the District for the second time, on the date immediately after the date of withdrawal of candidatures and shall remain in the District during the entire campaign period, and shall leave the District only after the poll. The Expenditure Observer is responsible for all the functioning and checking of the expenditure.

The Video Viewing Team shall make CDs in house out of the video recordings, captured by video surveillance Teams.The Flying Squads (FS) and Static Surveillance Teams (SST) are assigned for the purpose of maintaining purity of elections.The MCMC (Monitoring of Campaign through Electronic/ Print Media including Cable Network) closely watches the campaign through Electronic/ Print Media including Cable Network, radio etc. and a pre-certification is done in case of advertisement in electronic media.

The expenditure monitoring is supervised by a special unit called the Expenditure Monitoring Cell.

The Monitoring mechanism also includes Monitoring Accounts of Self Help Groups, NGOs etc, Checking Distribution of gift articles, serving of food in Marriage and Community Halls,Checking Distribution of Tokens to be exchanged for gifts or cash or distribution of money through various means,Checking distribution of cash by candidates/political parties along with disbursement of wages under any Government scheme and Monitoring of cash withdrawal from Banks.