The loopholes in the guidelines of the Election Commission of India leaves a lot of scope for candidates to get away with poll expenses way beyond the sanctioned limits
The use of illegitimate money in elections puts a question mark on democratic norms and runs the risk of transforming the Republic into a democratic plutocracy. Evidence shows that members of legislative assemblies (MLAs) in the country spend well over 20 times the limit set by the Election Commission of India (ECI). With the ECI increasing the poll expenditure limit this year, a candidate can now spend up to Rs 95 lakh in parliamentary elections and Rs 70 lakh in assembly elections.
Through the prism of the Gujarat elections, we can seek to answer three broad and interrelated questions: What are the different activities adopted by candidates for financing election campaigns? What are the different pathways through which money and other material get distributed during elections? Finally, how candidates circumvent the legal limit set on campaign expenditure.
According to information provided by the Association for Democratic Reforms (ADR), on the basis of affidavits and election campaign expenditure disclosures submitted by various candidates, there was a humongous increase in the wealth of re-contesting MLAs across the party spectrum in the 2017 assembly elections. However, the average growth in the assets of re-contesting legislators, those who also contested the 2012 elections, from the Bharatiya Janata Party (BJP) was 57 per cent, while it was 14 per cent for Congress MLAs. In the 2012 elections, their assets grew phenomenally, with the average increase for BJP and Congress MLAs, respectively, at 177 per cent and 412 per cent. Wealthy candidates not only make for a vital source of campaign funding for their party owing to their financial clout but they also have a high winnability.
However, the nature and sources of campaign finance in a particular state are a projection of the existing political economy and competition. Due to regulatory power invested in the state, corporate and industrial houses make donations to both the ruling and the opposition parties, and their prime motive is to safeguard their business interests. Gujarat has a high urbanisation rate and has witnessed rapid growth in the construction sector in recent decades.
Recent research has shown that builders experience a short-term liquidity crunch as elections come closer due to their need to re-route funds to campaigns as a form of indirect election finance. Other sources of campaign finance include funds from party coffers and money raised individually by candidates. In Gujarat, Congress has been out of power for more than 25 years. Due to financial constraints, Congress tends to rely more on individual candidates who possess the capacity to raise and spend money in elections. Such candidates also enjoy a disproportionate say over who gets the party nomination. Due to its strong organisational structure, the reliance of the BJP on individual candidates is far lesser.
The expensive nature of campaigning is attributed to a host of factors like personal rallies, printing material, transportation and distribution of handouts to voters. Recent studies on campaign finance have shown that the total cost of contesting elections in Gujarat is as high as Rs 1.6 crore, while the official figure is four-five times smaller than the actual expenses incurred.
In spite of the law on expenditure limits, how do parties and candidates bypass the official ceiling and underreport their poll expenses? The answer lies in the ‘third party spending’. Third parties include close aides, family members and the kin of a candidate who act as channels to route expenses. Most parties also announce a list of star campaigners. There is an existing provision which rules that a star campaigner’s costs cannot be included under the personal account of a candidate’s expenses if they campaign for the party and do not openly mention the name of the candidate. If the candidate of a political party pays for chartered helicopters and planes used by the star campaigner, the candidate need not declare them as part of his poll expenses to the Election Commission. These are the loopholes that lead to the underreporting of campaign expenditures.
The nature of patronage and clientelistic bargains differ significantly in urban and rural areas. Politicians resort to different methods in rural and urban areas. Distribution of liquor is more common in urban slums, where the institutional delivery of public goods and services is poor, while community feasts are organised to woo the voters in rural constituencies. In urban areas, builders, trade councils, small businesses and illicit liquor mafia rule the roost. In rural areas, the dynamics are different. Milk cooperatives are very powerful in the villages of Gujarat. The quid pro quo between politicians and milk cooperatives has been well documented. Most persons heading milk cooperatives owe their allegiance to the BJP. These milk cooperatives are deeply embedded in rural Gujarat. Also, the financial clout of these cooperatives makes them a lucrative avenue for fundraising. In order to evade detection, most of the transactions are done in cash.
The savage display of money is again evident in the 2022 assembly elections as well. ADR reports that in Phase-1 of the polls, 27 per cent of the 788 candidates in the fray are crorepatis (millionaires). Eighty-nine per cent of BJP candidates are crorepatis, with average assets worth Rs 13.4 crore. Among Congress and Aam Aadmi Party candidates, the number of millionaires stands at 73 per cent and 33 per cent, respectively. However, the display of money is not common to Gujarat or India only. The problem prevails both in mature and in younger democracies.
We must ask the why of it. The answer to this question is manifold. An unabashed flow of money in elections can affect the outcome, especially in the most tightly contested elections. The illegitimate money in politics makes leaders susceptible to undue pressures from big and wealthy donors. There is a loophole in the ECI guidelines on poll expenses. Though there is a limit on the campaign expenses of individual candidates, there is no such cap on the expenditure limits of political parties. Such a loophole gives an undue advantage to a dominant party over its competitors who find it difficult to raise money. Such loopholes can rightly be called ‘incumbent protection plans’.
(This appeared in the print edition as "A Rich Harvest")
(Views expressed are personal.)
Nishant Ranjan is with the Centre for Policy Research, Delhi