It also wants a ceiling on the campaign expenditure of political parties that is used as a ruse to pump in unlimited resources.
Chief Election Commissioner V S Sampath says that if paid news is made an electoral offence, then it will serve as a "deterrent" on those violating the law.
"Paid news is really a matter of serious concern for the Commission...It is not an electoral offence. We have proposed to the Law Ministry that paid news should be made an electoral offence," Sampath told PTI.
The EC's proposal in this regard to the government is pending for two years.
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"Action will be more deterrent. Action now is without backup of law," he explained.
He said political parties in various states the EC has visited have expressed concern over the issue of paid news.
The CEC was of the view that organisations such as the Press Council of India and News Broadcasters Association should also use their powers to curb the practice of paid news.