It, however, said the funding should be in kind and not in cash and be confined only to the parties recognised as national or state parties by the Election Commission and to candidates fielded by such parties.

State funding of elections is ``fully justified -- constitutionally, legally and also in the larger public interest,'' the committee, offshoot of an all-party meeting on May 22 last year, said in its report presented to Union Home Minister L K Advani today.

To begin with, the Central Government should contribute Rs 600 crore annually, at the rate of Rs 10 per elector for the total electorate of about 60 crore, towards the corpus of the fund, the committee, headed by former Home minister Indrajit Gupta, said.

``The state governments, all taken together, may also contribute proportionately a matching amount of Rs 600 crore annually, in accordance with the present financial arrangement between the Centre and the states whereby all capital expenses on election items are shared by them on 50:50 basis,'' the committee said.

Later, Advani said it would not be difficult for the government to enact a law on state funding of elections since the committee was unanimous in its report.

Later, Advani said since the report of the committee was unanimous, it would not be difficult for the government to enact a law on state funding of elections.

Besides Gupta, other members of the committee are Somnath Chatterjee, Manmohan Singh, Madhukar Sirpotdar, Vijay Kumar Malhotra, R Muthiah, Digivijay Singh and Ram Gopal Yadav.

The committee has come out with a series of ``do's and dont's'' to make the election process clean and transparent.

It has recommended that political parties should compulsorily submit their annual accounts regularly to the Income Tax authorities, showing all details of their receipts and expenditure.

No state funding should be provided to any party or its candidates if the party has failed to submit its annual return for the previous assessment year under the Income Tax Act.

Political parties should also file a complete account of their election expenditure at every general election to the Election Commission of India. Such account should show the receipts and expenditure, both on the general party propaganda and on individual candidates.

To bring transparency in party accounts, all donations received by political parties above Rs 10,000 should be accepted only by means of cheques/drafts and the names of such donors should be fully disclosed in their accounts.

The committee said these accounts may be audited by such Chartered Accountants as may be selected by the political parties themselves, which may, however, be further checked by the Income Tax authorities by their own agencies, wherever considered necessary by them.

Ban on donations by government companies for political purposes should continue.

The question whether there should be any ban on donations by other corporate bodies for political purposes may be decided by government and Parliament in their collective wisdom.

Besides, the question whether election expenses of political parties and other bodies or associations and individuals should be included or not in the accounts of election expenses of candidates may also be decided by the government/Parliament in their collective wisdom.

The high-powered committee, has, however, held that given the budgetary constraints and the present financial stringency, only part of the financial burden of political parties may be shifted to the state, for the time being.

``Gradually, more and more of their expenses burden can be progressively shifted to the state so that ultimately all their legitimate expenses become a charge on the state,'' it said.

The committee has also come out with a set of recommendations as regards provision of facilities to the parties. Every recognised national party may be allotted rent-free accommodation in the national capital at Delhi, with one rent-free telephone. Similar facility may be given to each recognised state party in the state in which its headquarters is situated.

The recognised national and state parties may be granted sufficient free air time on state owned Doordarshan and All India Radio for their election propaganda over the electronic media.

Other private channels, including cable operators, may also be required to like-wise make sufficient free air time available for use by the recognised national and state parties, during general election.

Each candidate of a recognised political party may be provided with a specified quantity of petrol or diesel for vehicles used for his election campaign as also a specified quantity of paper for printing his election literature and the unofficial identity slips for distribution to voters.

Candidates should also be provided free of cost postal stamps of a specified amount, five copies of electoral rolls of his constituency and one set of loudspeakers (one micro-phone and two loudspeakers) for every Assembly constituency or for every Assembly segment of a parliamentary constituency.

The candidates should also be provided one deposit-free telephone with a specified number of free calls for his main campaign office in every Assembly constituency/segment (subject to a maximum of six such telephone for the entire parliamentary constituency).

Some minimum arrangements should be made for his camps outside each polling station on the day of poll and refreshments and food packets for his counting agents inside the counting hall on the day of counting.

The quantities of petrol, diesel, paper and postal stamps to be given to candidates may be worked out by the Election Commission on a realistic basis for different states and for different constituencies keeping in mind the territorial extent of constituencies, size of electorate, geographical features of the areas and means of communication available.

In order to curb mounting election expenses of parties and candidates and ostentatious show of money power by them, the committee said reasonable restrictions may be placed by law on several matters like wall writings, display of cutouts and hoardings, hoisting of flags, use of more than a specified number of vehicles, holding of public meetings beyond specific hours and display of posters at places, other than those specified by district authorities.

Submitting the report, Gupta said the recommendations, if implemented, would go a long way in removing corruption from the electoral system.