Opinion

Money power in Indian elections

MICHAEL COLLINS | Updated on March 12, 2018 Published on July 29, 2014

Just teasers The real spending happens elsewhere B JOTHI RAMALINGAM

It remains unchecked because of a glaring loophole: the spending cap applies to candidates, not political parties

Two months ago, India conducted the largest democratic exercise in history. The 2014 General Election, enacted in nine phases over a five-week period, witnessed 553.8 million voters cast ballots to constitute the 16th Lok Sabha. The resurgence of the Bharatiya Janata Party captured headlines and diverted attention from a disconcerting growth in gross electoral spending. With an estimated $5 billion price tag, including a cost of nearly $600 million to the Government exchequer, the election ranks among the costliest in the history of democracy.

Unprecedented growth in campaign expenditure complicates the formidable task of the Election Commission (EC) to curb the role of ‘money power’ during elections. Over the past five years, the EC revamped efforts to monitor and control the campaign expenditure of individual candidates. The consequences of these reforms were evident when I recently tailed a parliamentary candidate during the campaign.

More stringent monitoring protocols compelled candidates and their campaigns to develop new techniques to skirt regulation or, when possible, to capitalise upon its lapses. While concerted efforts by the EC have dampened a candidate’s ability to spend freely, a limited focus on candidates without concurrent efforts to limit party expenditure is re-channelling campaign finance through the coffers of political parties and, in effect, leaving intact the primary source of exorbitant spending.

The Election Commission deploys an array of tactics to intercept black money and monitor electoral expenditure. During election season, media outlets often carry reports of roving flying squads intercepting troves of cash, liquor and gift-for-vote commodities, and travellers routinely encounter mobile checkpoints conducting impromptu stop-and-search procedures along national highways. In fact, these techniques netted nearly ₹300 crore in undocumented cash during the past election. Recently, the EC has concentrated resources to rein candidate expenditure within the new ₹70 lakh limit sanctioned for most parliamentary campaigns.

Close watch

To monitor discrepancies between declared and actual expenses, the EC maintains a near ubiquitous presence on the campaign trail and regularly videotapes public rallies and processions. An expense monitoring team reviews video footage to assess the gross cost, tallying a near exhaustive list of items and then recording these expenses on a shadow register maintained for each candidate.

On the campaign trail in Tamil Nadu, I observed a lavish procession led by autorickshaws fitted with party flags and PA systems followed by an interminable succession of SUVs and motorcycles that writhed through congested urban streets. On that same day, the EC reviewed video footage and assessed the rally at ₹2 lakh. A few weeks later, the pinch of video monitoring was particularly evident when the candidate began waving off convoys of SUVs, concerned that their presence might tip his declared expenditure over the legal limit. Although conservative estimates place the expenditure of candidates in major parties upward of several crore, the invasive presence of video monitoring teams curbs the once commonplace practice of grossly under-declaring expenses for public events.

Skirting regulation

While video surveillance prevents a gross under-declaration of expenses incurred through public rallies, it leaves quotidian aspects of campaign finance easily manipulated. For example, spending often begins well before filing nomination papers, which is when the Commission officially begins tallying candidate expenditure. Then there’s the matter of print advertisements. Batches printed in the tens of thousands or even lakhs are formally declared as 1,000 or even 500. A coy party worker informed me that although there are routine stop-and-search procedures on motor vehicles, sometimes even disassembling side-door panels, pockets are often ignored, enabling a single individual to smuggle up to ₹4 lakh in 1,000-rupee notes.

Candidates remain one step ahead of the Commission by exploiting lapses in finance regulation. The recent election witnessed an unprecedented level of digital canvassing that go beyond the purview of regulation. Indeed, my cell phone routinely sprang to life as party propaganda raided the airwaves via mass voice messages. Assocham estimates that expenditure on digital media may have exceeded ₹500 crore in the recent election.

Re-channelling the finance

The Election Commission classifies lawful campaign spending as either candidate or party expenditure. While candidate expenditure is capped at ₹70 lakh in most parliamentary constituencies, party expenditure remains unconstrained. Even though candidates manage to shave lakhs, or even crores, from their expense reports through under-assessment and regulatory lapses, declaring campaign costs beneath the lawful limit has proven exceedingly difficult under the watchful, and now recorded, gaze of the Election Commission. In order to keep expenditure sheets in the green, campaign expenses are increasingly channeled through political parties.

The Commission operates with a procedural distinction between candidate and general party canvassing. For instance, even though a candidate may feature prominently on the dais at a public rally, as long as his or her name, constituency and photograph are not mentioned or displayed, the political party absorbs the entire cost of the event.

The impact of this regulatory lapse was evident. For example, when an iconic party boss convened a rally assessed at ₹10 crore, replete with gothic archways and colossal cutouts that stretched toward the horizon, eliding mention of the candidate’s name and constituency spared his expense report of this hefty sum. As candidate expenditure confronts increased scrutiny, campaign expenses are migrating to party exchequers for which stringent controls are notably absent.

The effect is, ironically, to reduce the active role of candidates within their campaigns while incentivising personality-driven politics, the use of so-called “star campaigners” . Moreover, this reliance on party funds yields an inequitable playing field.

The perennial tussle between candidates and the Election Commission is not simply a game of cat-and-mouse. Candidates do not merely skirt regulation; they operate within its lapses. Capping candidate expenditure, while extending a blank check to political parties, inadvertently sidelines candidates while leaving untouched the primary source of exorbitant spending. The re-channelling of campaign spending through party coffers presents a clear impediment for fair elections, not to mention a disquieting forecast for smaller parties.

The writer is a doctoral candidate in the Department of South Asia Studies at the University of Pennsylvania. This article is by special arrangement with the Center for the Advanced Study of India, University of Pennsylvania

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Published on July 29, 2014
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