Black money stalks Indian elections

Tags: Op-ed
Black money stalks Indian elections
BIG DEAL: Congress and BJP, according to many political commentators, are spending up to Rs 4,000 crore, including Rs 500 crore on advertisements/marketing and Rs 1,500 crore on other campaign related expenses
Competitive political parties and election campaigns are central to the health of democracies like India. The Representation of the People Act (RPA), 1951, introduced limits on the amount that could be spent on election campaigns with violators facing disqualification and annulment of their election results.

The Supreme Court in Kanwar Lal Gupta vs. Amar Nath Chawla, 1974 provided the rationale for such a law —that contesting elections must be accessible to all individuals and groups on an equal footing and the influence of big money in the electoral process must be limited.

It might be useful to ponder over what might be the total expenditure involved in the 2014 elections. Interestingly, official election expenditure have ranged from Rs 5 to Rs 11 crore between 1952 and 1971 during the licence permit raj era which subsequently led to the emergence of a nexus between funding and black money in the late 1960s.

After Indira Gandhi banned corporate funding in the early 1970s and, in the absence of any state funding, the nexus strengthened further which, in turn, was reflected in the expenditure during subsequent elections ranging from Rs 23 crore in 1977 to Rs 597 crore in 1996. With the advent of information communication technologies, the expenditure has doubled over the past decade, from Rs 1,100 crore in 2004 to Rs 1,200 crore in 2009.

There are three main sources of expenditure during elections. First is in their conduct by the Election Commission (EC), which includes setting up of polling booths, electronic voting machines and other expenses, including the huge deployment costs of security and other administrative staff all over the country. In the interim budget presented on February 17, the total amount shown against expenses for elections and the Election Commission is Rs 594.63 crore.

The second source is the money spent by political parties on campaign-related expenses, including banners, hoardings, organisation of public meetings, transport of key campaigners by helicopter or chartered flights, among others.

This time, there is an added buzz of the prospects of the NDA posing a serious challenge to the UPA. Keeping this in mind, the two major political parties, according to many political commentators, are spending up to Rs 4,000 crore, including Rs 500 crore on advertisements/marketing and Rs 1,500 crore on other campaign related expenses. The other major national parties like the BSP, NCP and Left put together could spend another Rs 4,000 crore. Regional parties may do the same. Hence, the consolidated amount adds up to Rs 12,000 crore.

The third source is the money spent by individual candidates on their campaign including even bribing voters. Interestingly, on February 28, the UPA cabinet, in one of its last sittings, decided to raise the limit on election spending by candidates from Rs 40 lakh to Rs 70 lakh per parliamentary constituency in big states like UP, Bihar and Maharashtra and from Rs 22 lakh to Rs 54 lakh for constituencies in smaller states like Goa or the north-east.

Will this increased spending limit encourage candidates to depend less on black money? It is unlikely especially if one takes note of BJP MP Gopinath Munde’s claim, in 2013, of spending Rs 8 crore on an election campaign, only to retract when the EC sent him a notice. If one can use this claim as an indicator, the candidates representing the two major political parties on an average can be assumed to spend Rs 16 crore per constituency.

The gap between the legal limit and what Munde claimed is so huge, that one can safely assume that the balance is financed by black money. There have been recent media reports about illegal cash transfer through bulk booking and cancellation of waitlisted train tickets at different places. There have also been reports of transferring cash illegally through purchase and sale of gold and diamonds at different places

Despite the EC having appointed expenditure observers across India, chief election commissioner VS Sampath was quoted on March 5 expressing his concern about “money power” — heavy spending and the use of illegal funds — to influence the outcome of elections.

Thus, when one combines the expenditure of the election commission, the political parties and individual candidates, it can be assumed that the consolidated amount incurred will be Rs 26-27, 000 crore. However, in the absence of any credible methodology to seriously account for the unofficial/illegal expenditure incurred on elections over the past 65 years, this calculation can, at best, be an educated guess. When all of this is put together, it is safe to assume that Election 2014 could be the biggest democratic exercise in the world financed by black money.

(Venkat Lokanathan is assistant professor and coordinator, master’s programme, political science at St. Joseph’s College, Bangalore)


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