Unchecked money power in Indian elections

Research has revealed that the reported expenditure of candidates “only represent a minuscule fraction of their real expenses frequently less than 1/30th or 1/50th of the overall amount”

It’s all credit to the Election Commission (EC) that hundreds of millions of voters across a vast country like India, with a 900 million-strong electorate are able to exercise their franchise peacefully and in a free and fair manner. This time too, elections to the Lok Sabha have been largely smooth except, perhaps, in Bengal.

Yet, the poll body has come under severe criticism from all quarters this time, making it imperative for it to introspect and reform itself to ensure people’s continued faith in the great upholder of Indian democracy. The general elections this year have seen unprecedented complaints of alleged violation of the model code of conduct.

The EC, which handles every aspect of conducting elections, does get bogged down by piles of complaints, but there are some that need looking into on a warfooting and disposed of swiftly, otherwise the whole exercise of conducting free and fair elections falls flat. In some cases, the EC took three to five weeks to look into complaints and take action.

There were eight complaints against Prime Minister Narendra Modi for violation of election rules, but it took the EC more than a month to dispose of them. Taking so much time to handle complaints serves little purpose because once elections are over, the damage is done, opposition parties opine. To ensure a level-playing field to all candidates and parties, the EC must wear the badge of impartiality on its sleeves. It must also ensure that unaccounted money is not used to fund elections.

This election season, the seizure of unaccounted cash, liquor, drugs and precious metals had crossed INR 3,166 crore (around USD476 million) on April 25, with four poll phases still to be held. This is almost thrice the total seizure value of INR 1,200 crore (over USD180 million) during the 2014 Lok Sabha elections. In this context, the Finance Ministry’s electoral bond scheme has come under severe criticism.

According to political observers, the scheme has afforded a way to fund political parties without disclosing the donor’s identity. Electoral bonds are nothing but mere gift vouchers. Anyone can buy them from the State Bank of India during specific 10-day periods during the year and, within that time, they have to hand over the vouchers to political parties, which can encash them for money. The bonds are completely anonymous, do not carry the name of the donor, nor are they taxed. Many say the anonymity provision under the scheme is antagonistic to transparency - the bonds merely enable an “on-the-books” secretive transfer.

Of the INR 2,722 crore (around USD410 million) donated through the scheme in the past 15 months, roughly 95 per cent has gone to the ruling BJP, statistics reveal. Under Section 29B of the Representation of the People Act, political parties are free to accept donations from any person, except from a foreign source. This provision, many say, needs to be amended to outlaw funding by corporates as well.

Officially, India has limits on election spending: INR 50 lakh to 70 lakh (around USD71,300 to USD100,000) to for a Lok Sabha candidate, and INR 20 lakh to 28 lakh (around USD28,500 to USD40,000) for an assembly candidate, depending on the state.

However, the reality is something quite different. Research has revealed that the reported expenditure of candidates “only represent a minuscule fraction of their real expenses - frequently less than 1/30th or 1/50th of the overall amount”.

The Centre for Media Studies has estimated that the 2019 Lok Sabha elections will cost INR 50,000 crore (around USD7.5 billion). This is just an estimate because the vast majority of it is unaccounted cash, not flowing through the formal system and not officially reported by the parties.

In fiscal 2017-18, the BJP’s income was a little above INR1,000 crore (around USD150 million) of which more than 53 % came from unknown sources. According to the EC’s rules, there are limits on a candidate’s expenditure, but not on political parties. Though the parties are supposed to tell the poll body how much they spend and also where they get their money from, yet they have refused to comply with the provision. Unless these rules are changed, it would be difficult to crack down on illegal money in elections(IPS).