The best government that money can buy: Siddharth Varadarajan

Note: Like "there is no limit to what political parties may spend to promote their overall electoral prospects", there is no limit to the honesty of BJP and Congress either. In response to this article BJP is going to post all the details of funds it has got in cash and through cheque on its website. Can Congress do it?

Gopal Krishna

What money can buy

Siddharth Varadarajan,
Economic Times, April 30 2014

The 2014 election is a reminder of the one big loophole in India’s election rules designed to favour parties backed by the rich: While individual candidates are not allowed to spend more than Rs. 54-70 lakh, there is no limit to what political parties may spend to promote their overall electoral prospects.

Parties are only obliged to report their expenditure on general election propaganda to the Election Commission within 90 days of the Lok Sabha election ending. The EC has the right to verify the reported figures but can levy sanctions only if some of that 'general' expenditure was incurred to support individual candidates.

Compare this to Britain, whose election system India broadly follows.

There, a candidate can spend somewhere between GBP 10,500-12,000 (i.e. , Rs 10.5-11.8 lakh) depending on the size and location of constituencies. In addition, a party's 'national campaign' spending is also capped at GBP 30,000 per constituency, or an upper limit of 19.5 million GBP (approximately Rs. 195 crore) for a party contesting every one of the 650 seats in the House of Commons.

In the last British general election, all parties together spent GBP 31 million (Rs 310 crore approximately) in their national campaign. By way of comparison, the BJP alone spent Rs 448.66 crore in the 2009 Lok Sabha election while the Congress too spent a massive Rs 380.04 crore.

While the British and Indian caps cannot readily be compared -- India has larger, but Britain has more, constituencies, and the cost structure of the two economies is totally different – India’s failure to limit what parties can spend on general propaganda has given big money power a huge role in our elections.

Indications are that the amount being spent in the 2014 Lok Sabha election, especially by the BJP, runs to a figure at least ten times higher than five years ago. One estimate pegs the BJP's advertising spend across all media including hoardings at a staggering Rs 5,000 crore. That’s just a bit less than the Rs 6,000 crore -- roughly $1 billion the Obama campaign spent under all heads in the 2012 US presidential election! Once other expenses are added, the overall BJP budget will exceed that. 

What impact will the deployment of money on this scale have not just on the election outcome and the policies of the next government but on the future course of Indian democracy?

Back in 1974, the Supreme Court in the Amar Nath Chawla case recognised the principle that election expenditure must be limited in order to ensure equality between candidates and to "eliminate as far as possible, the influence of big money in the electoral process." Though it did not set a limit, it ruled that "some limitative ceiling" on expenditure for general party propaganda during elections "is eminently desirable".

The court saw the remote, top-down nature of electoral politics as the culprit. "If there is continuous community involvement in political administration punctuated by activated phases of well-discussed choice of candidates by popular participation in the process of nomination, much of unnecessary expenditure which is incurred today could be avoided... Large campaign funds would not be able to influence the decision of the electors if the selection and election of candidates become people's decisions by discussion and not a Hobson's choice offered by political parties."

If election expenditure were not limited, it said, political parties "would go all out for collecting contributions and obviously the largest contributions would be from the rich and affluent who constitute but a fraction of the electorate. The pernicious influence of big money would then play a decisive role in controlling the democratic process in the country."

This is precisely what is happening with the corporate sector now fully into the act, making both open and hidden contributions. Last month, the Delhi High Court found the Congress and BJP guilty of illegally accepting money from the UK-based firm, Vedanta. Those payments were made by cheque, but cash is still king because it is untraceable. In 2009, cash accounted for 75 per cent of the money raised by the Congress and half of that of the BJP.

In 1943, even before India was free, Babasaheb Ambedkar spoke of the danger posed by the fusion of capital and politics: “These days, with the Press in hand, it is easy to manufacture great men,” he noted caustically -- and presciently. “In establishing their supremacy” our great men “have taken the aid of big business and money magnates. For the first time in our country, money is taking the field as an organised power.”

Seventy years on, the influence of big money has grown exponentially. Yet there is little recognition of the damage this is doing to the integrity of our electoral process. The biggest national and regional parties have a vested interest in allowing the status quo to continue. Change will come only when the ‘aam aadmi’ realizes this is what is keeping him out of power.

(Siddharth Varadarajan is a Senior Fellow at the Center for Public Affairs and Critical Theory, New Delhi)