By Maj. Gen. Anil Verma (Retd.)
Elections in India are a hugely expensive affair. Large amounts of money are collected by political parties and spent during the elections. Though there is a prescribed ceiling for the candidates’ election expenditure, there is no limit on the expenditure political parties can incur. A large component of this money originates from dubious sources and most of funding is from unknown sources. To be fair, elections in India are also costly due to the large size of constituencies, intensity of political competition and the weakness of the non-electoral system of accounting.
Along with black money in elections, money power is also being used to subvert the essence of democracy. It would not be far from the truth to state that politics has been made a profession for self publicity or consolidating family power by most politician, and it rests on the principle of quid pro quo. Most political parties or politicians accumulate large amounts of resources while in power. They invest their assets where they can avoid public scrutiny while earning decent returns – for example, in real estate. Subsequently during elections, the money parked in such assets is used to offset election expenses.
The Association for Democratic Reforms’ (ADR) research on these aspects clearly brings out the influence of money which manifests itself in the rising cost of elections, increase in number of crorepatis MPs/MLAs, assets growth of the re-elected MPs/MLAs and chances of winning for crorepati candidates. These aspects are elaborated in the succeeding paragraphs.
Rising expenditure by national political parties
While analysing the total expenditure incurred by the national parties during Lok Sabha elections held in 2004, it was observed that 269.42 crores was spent during the election process, 875.81 crores during the 2009 Lok Sabha elections and 1308.75 crores during the Lok Sabha elections in 2014. Thus, over a period of 10 years, the expenditure incurred by national parties during Lok Sabha elections increased by 386 percent.
The same analysis by ADR on election expenditure of national parties during Lok Sabha elections also states that the total funds collected by them amounted to 2237.28 crores during Lok Sabha 2004, 2009 and 2014 elections of which 45 per cent or 1007.81 crores was collected in cash. Funds collected in cash increased from 70.29 crores in 2004 to 528.76 crores in Lok Sabha 2009. It reduced to 408.75 crores in Lok Sabha 2014 but formed 35.28 per cent of the total funds collected by national parties during Lok Sabha 2014 polls.
An increase in the number of crorepati politicians per state
Apart from the finances of parties, which showed a marked increase between elections, there is also a consistent trend of an increase in the number of crorepati MLAs in all the states (except in Delhi). In small states such as Manipur, Meghalaya, West Bengal and Goa, the number of crorepati MLAs has doubled. The pronounced increase could be attributed to the lesser number of constituencies that might affect the average of crorepati MLAs. Seventy-two per cent of states have more than 50 per cent crorepati MLAs.
Out of the 542 winners analysed during Lok Sabha 2014 elections, 443 (82%) were crorepatis while out of 521 winners during 2009 elections, 300 (58%) winners were crorepatis.
From 76 per cent in 2009 Lok Sabha election, Andhra Pradesh had 100 per cent crorepati MPs in 2014 Lok Sabha elections. In 2009, Chhattisgarh had 13 per cent crorepati MPs, however this percentage reached 91 per cent in 2014 Lok Sabha elections. In West Bengal, Madhya Pradesh and Odisha, the number of crorepati MPs in 2014 have doubled from what they were in 2009. States represented by one or two MPs have 50-100 per cent crorepati MPs.
With increasing cost of expenditure for contesting elections, the ‘winnability’ of candidates increases with their assets. By distributing tickets to the wealthier, political parties skew the level playing field and mock the concept of ‘free and fair’ elections.
Winner takes all
Based on the assets (moveable and immoveable) declared by the candidates in 2014, ADR analysed that 415 winners or 77 per cent of the total number of MPs occupied the top three highest asset positions in their respective constituencies. One hundred and sixty MPs or 30 per cent of all winners have the highest declared assets in their constituency.
The above analysis brings out the rise in expenditure/income of political parties and sharp increase in the personal assets of re-elected legislators. There is a persisting lack of transparency in the funding of political parties. The fact that these official reports/submissions to the Election Commission (EC) and the Income Tax Department are gross under-reporting is no secret. When former Prime Minister Atal Bihari Vajpayee had stated, We (legislators) start our careers with a lie, he was referring to the election expenditure statements submitted by the winning legislators.
Recommendations that could be adopted
The Law Commission recommends that there must be a ceiling on expenditure by political parties and shareholders must take contribution decisions instead of corporate boards. It also recommends that all donations greater than INR 2000 must be disclosed and accounts of parties must be audited as per the Institute of Chartered Accounts of India (ICAI) guidelines. The commission also recommends heavy penalties for parties that dont lodge accounts of election expenses and a wider tax coverage for political parties. Further, it recommends an amendment of the RPA to penalise defaults in reporting by Electoral Trusts.
The legal framework is the starting point for the role that money ought to have in political life. However, laws by themselves accomplish little on their own. Better laws, stronger enforcement, improved financial management within the parties are all measures that have been promoted to improve control over money in politics. But as, politicians themselves design the rules they are supposed to obey, regulation continues to include loopholes, enforcement agencies are not sufficiently empowered and parties do not account for their finance.
The system of ensuring compliance is often weak. Thus, there is a need for broader involvement in the development of political finance regulations by having a wide range of stakeholders. The starting point for improvement should be a thorough analysis of the specific needs by the monitoring agencies – identifying whether there is a lack of political will, technical know-how or independency from the parties and candidates they are supposed to monitor. Policy makers must give agencies more power to demonstrate serious commitment towards transparency and increased public trust.
Maj. Gen. (Retd.) Anil Verma is National Coordinator, Association for Democratic Reforms
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