>> homomorphic encryption for anonymity.
>You lost me there
Intuitively: you can add a list of encrypted numbers and then decrypt only the result. Additionally, you can prove that the decryption is correct without revealing the private keys. Decryption keys can be distributed so that no single person can decrypt the votes directly. So, you track your encrypted and signed vote until it goes into the counting process and then you verify the zero-knowledge proofs that tell you the counting was done correctly, but the counting itself doesn't tell anyone anything about individual votes, just the sum of votes for each candidate.
> But then I say paper requires less technical skills and is an order of magnitude less expensive than the cost associated with a safe and sane voting system ?
Right now? For national elections every X years? With our current understanding and computing infrastructure? Absolutely! I am not in favor of online voting right now (except perhaps for a limited number of remote votes for nationals outside their countries, possibly with reduced anonymity).
Where secure electronic voting could shine is in direct democracy systems, where you vote on at least some important resolutions directly or where you can revoke an administration's mandate at any time by getting a threshold number of "votes of no confidence" on it. If you have to vote every week, or every month (let alone daily...), then paper voting is unworkable.
> Wow. That is indeed a good example in favour of electronic voting system.
Actually, we have had electronic fraud before as well (in the global counting). So, I doubt electronic voting would fix democracy in Mexico either. At least not by itself. Just pointing out that the system being replaced is not infallible either...