Election Commissioner SY Quraishi said, "An 'Expenditure Monitoring Division' is being created with senior officials of the Income Tax Department manning it."
"The new division shall be in position in the next few months," he said.
Quraishi pointed out that the new division will maintain the expenditure statements of parties and candidates and take follow up action.
Noting that cash garlands is an "old phenomenon", he said the question of scale and magnitude has now changed.
"The money in cash garlands will come under the category of donation to political parties. Since there is no election right now, it does not seem to be in violation of the election law," Quraishi said.
"We are concerned about use of money power, it needs to be controlled," the Election Commissioner said, suggesting that beyond a point the poll panel was helpless as "money changes hands secretly."
On the ensuing Bihar Assembly polls, Quraishi said the EC has taken enough safeguards to ensure free and fair polls.