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BW Businessworld

Money Is The Mother’s Milk Of Politics

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The famous American truism that “money is the mother’s milk of politics” is attributed to Jesse ‘Big Daddy’ Unruh, California’s Democratic party boss in the 60s who won the state for John F. Kennedy in 1960 and had Richard Nixon defeated for governor two years later. California is the US’s biggest state and logically the biggest source of political funding. In those days, US politicians collected money in wads pretty much like our politicians do now by putting the squeeze, shaking hands, collecting IOUs and cutting deals with businessmen, criminals and some other less desirable types.

Politics is a full-time vocation. People who are devoted to it do not hold regular office-hours jobs to make a living. Some might have private means, but most are ‘supported’ by moneyed people keen to buy connections that can translate into political favours. If you look at them closely, very few of our top political leaders have held or hold jobs or have assets that will provide them with living incomes. But almost all of them manage to live well, come to own properties and migrate into the plush comforts of upper-income lifestyles. Clearly some or even much of the so-called ‘party funds’ do not reach the party’s coffers. At a time when most party identities are coterminous with a ruling dynasty, the difference between party and self is often blurred.

It’s not that political parties do not get money directly and declare it too. Corporates and business houses made 87 per cent of the total donations to national parties between 2004-05 and 2011-12. Out of Rs 435.87 crore collected, corporates and business houses donated Rs 378.89 crore. BJP received the maximum donations of Rs 192.47 crore from 1,334 donors from corporate/ business sector followed by INC receiving a total contribution of Rs 172.25 crore from 418 donors from the corporate/ business sector. Interestingly, in violation of the laws, 301 donors contributing Rs 25.28 crore to the national parties have not declared either their PAN details or address in the contribution form. BJP has listed the maximum number of donors (273) who have not declared their PAN and address while contributing a maximum of Rs 22.53 crore. In addition to these, the two major parties have declared additional contributions from ‘unknown’ contributors.  The Congress had the highest income in the three financial years (2007-08, 2008-09 and 2009-10), which accounted for approximately Rs 1,185 crore, whereas the BJP is shown to have a total income of around Rs 600 crore. 

The figures for the period up to May 2014 have not been made available as yet by the parties, but even if we assume that they received a like sum or even twice, the total money that flowed through their kitties since 2004 cannot be more than Rs 6,000 crore. Now square this up against what the two parties alone are estimated to have spent on the 2014 Lok Sabha elections.

Since he was announced as the BJP’s prime ministerial candidate in September 2013, Narendra Modi travelled over 3,00,000 km, mostly by private jets and helicopters, criss-crossing the country. Private chartered aircraft cost as much as Rs 3 lakh for an hour of flying time. After the election dates were announced, he travelled 2,00,000 km and addressed 198 public meetings. A gruelling pace, but also an expensive one. Those of us who have been inside election campaigns of big parties know that each public meeting costs a minimum of Rs 10 crore. Apart from the cost of the star campaigners’ travel, there is the cost of local prachar, samagrahi and bhatta. Then crowds have to be hauled from their homes, often over distances to make the meeting a success, and have to be provided for with transport, allowances that have to exceed a day’s foregone wages, food and drink, and the buses, trucks and tractor trailers have to be paid for as well. These are huge expenses. Sonia Gandhi and Rahul Gandhi also addressed some 132 meetings. The costs remain the same. Tot them up together and both parties spent close to Rs 4,000 crore, just on public meetings.

Of the 8,251 candidates who contested the 543 seats, 1,045 belonged to the two major formations, the NDA and UPA. The average assets declared by all the candidates were Rs 5.83 crore, while the average Congress candidate had assets of Rs 54.38 crore and the BJP candidate was worth Rs 8.55 crore. Clearly, politics is now a rich man’s pastime. But wealthy as they might be, candidates cannot finance their elections.

It is widely believed that each of the candidates of the two major formations, on average, spent close to Rs 10 crore each. You have another Rs 10,000-12,000 crore here. Then there is the cost of publicity, advertising and even paying off the media. The Centre for Media Studies conservatively estimates that the parties together spent Rs 30, 000 crore during the 2014 elections. Now we know that the two major national parties will be hard-pressed to explain the expenses beyond Rs 6,000 crore. The electoral laws require the candidate’s expenditure for a Lok Sabha seat not to exceed Rs 70 lakh. Which means every candidate  files a false declaration before the Election Commission, which, oblivious to the reality, accepts them as the gospel truth.

Money never comes without strings. There have to be payoffs in kind and by tweaking policies. Keep your eyes open.  

The author is a distinguished fellow at Observer Research Foundation

(This story was published in BW | Businessworld Issue Dated 01-12-2014)