Lok Sabha poll purse

Updated: Apr 13 2014, 09:39am hrs
PollsOf the Rs 30,000 cr, the exchequer is likely to spend about Rs 7,000 cr to hold the electoral exercise.
From R10.45 cr spent by the Centre in the 1952 Lok Sabha elections to about R846.67 cr in 2009and with an estimated R7,000 cr this time aroundwe look at the numbers to size up what is being widely perceived as the most expensive electoral exercise in Indian history

ELECTIONS TO the worlds largest democracyas per data released by the Election Commission of India (ECI) on February 14, 2014, there are a total of 81.45 crore registered electors in the countrydont come cheap. If a recent report is anything to go by, a whopping R30,000 crore is likely to be spent during the ongoing Lok Sabha polls (the figure includes the total poll spending by the government, political parties and candidates), making it by far the most expensive electoral exercise in Indian history.

Of the R30,000 crore, the exchequer is likely to spend about R7,000 crore to hold the electoral exercise, a recent study carried out by the Centre for Media Studies (CMS), found out. While the ECI is likely to spend around R3,500 crore, the Union home ministry, Indian Railways, various other government agencies and state governments are expected to spend a similar amount to put in place the means to ensure free and fair polls.

The expenditure, projected by the New Delhi-based not-for-profit think tank, is set to rival the $7 billion (approximately R42,000 crore) spent by candidates and parties in the 2012 US presidential elections.

In fact, a similar study conducted by the Associated Chambers of Commerce and Industry of India (Assocham) said the estimated election spending amount will create a huge multiplier GDP effect of at least R60,000 crore, giving a shot in the arm to the Indian economy.

India spending

Data collected from the ECI and law ministry websites and compiled by the poll panel show that expenditure on conducting Lok Sabha polls has increased manifoldfrom R10.45 crore spent by the Centre in 1952 to R846.67 crore for the 2009 polls.

Cost-wise, the 2004 Lok Sabha election was the heaviest on the government exchequer with about R1,114 crore spent in the exercise. In that election, the per voter cost, too, was the highest, as the government had spent about R17 per elector.

There was an increase in the election cost by 17.53% vis-a-vis the 1999 general elections despite the fact that there was a reduction in the number of polling stations by 11.26%, the ECI data revealed.

As per ECI guidelines, the entire expenditure for conducting elections to the Lok Sabha is borne by the central government while states bear the expenses for conducting elections to state legislatures, when such elections are held independently.

If a concurrent election to the Lok Sabha and a state legislative assembly is held, then such expenditure is shared between the two governments. Expenditure incurred on items of common concern to the Centre and state governments like expenditure on regular election establishments, preparation and revision of electoral rolls, etc, is shared on a 50:50 basis, irrespective of whether such expenditure is incurred in connection with elections to the Lok Sabha or state legislatures. Even if the election is for Lok Sabha, expenditure towards law and order maintenance is borne by the respective state governments only, the ECI rules say.

Expenditure cap

This year, the limit on election expenditure incurred by a candidate for Parliamentary constituencies was raised to R70 lakh from R40 lakh in bigger states, while for smaller states and union territories, such as Arunachal Pradesh, Goa, Sikkim, Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Puducherry, the expenditure limit would be R54 lakh against R27-35 lakh earlier.

The revision was done due to an increase in the number of electors, polling stations as well as an increase in the cost inflation index.

The enhanced expense limit comes in the wake of political parties making a strong pitch in this regard at recent meetings with top officials of the ECI. The parties had argued that the current limits were too meagre compared with the rise in prices on account of inflation. As per experts, the other reason for revising the poll limit is under-reporting by candidates. It is believed that most of the candidates declare barely half the expenditure they are allowed to incur by the ECI.

The CMS study says the decision to hike expenditure limits is one of the reasons why poll spendings are likely to touch the R30,000-crore mark this year. Till recently, political parties used to spend more during elections. Now, the trend has changed with candidates in most cases spending more than the parties. Now where is this money coming from It is coming from crorepati candidates, corporates and contractors, CMS chairman N Bhaskara Rao told the media recently.

As per a rough, unofficial estimate, after the hike in poll expenditure cap, candidates in fray for 543 seats alone could spend nearly R4,000 crore in the Lok Sabha polls. Rao claimed that different industries in different states contribute to election funding. Be it the tendu leaf business, mining business or the cement industry, they all contribute, he added.

While the official limit for each of the Parliamentary candidates in 543 constituencies has been fixed at R70 lakh, the previous experience of different agencies at the ground level shows that this time around, each of the contestants, in majority of the cases , may end up spending up to R7 crore, the scanner of the Election Commission notwithstanding, the Assocham study noted.

It is extremely difficult for the official machinery to minutely monitor the expenditure details of the candidates The past experience shows that the number of crorepatis fighting the elections far exceeded the commoner, who would find even R70 lakh difficult to raise unless he or she is from a cash-rich big party, the study added.

As per the self-sworn affidavits of candidates who contested in the first four phases of the ongoing elections, there were 16, 23, 397 and 20 crorepatis, respectively, in the fray. The analysis was conducted by the Association for Democratic Reforms, a civil society group vying for transparency in Indian politics, and uploaded on its website recently. Also, the average assets (per candidate) of the candidates in the first four phases of the ongoing elections stood at R5.75 crore, R9.12 crore, R3.05 crore and R2.12 crore, respectively, the report noted.

Boost to economy

The businesses in the media such as television channels, newspapers, city hoardings, printers, social media, transport and hospitality such as bus/taxi operators, tents/ scaffoldings, caterers and airlines will see a direct positive impact of the election budgets of the political parties, as also the state machinery.

However, the greater economic impact would be seen in the form of the GDP multiplier effect since those earning from the elections would be spending at least 80-90% of such earnings. The propensity to save is small among the workers, employees and even the owners of the unorganised businesses, which will generally be more useful for electioneering except TV channels and newspapers, Assocham president Rana Kapoor was quoted as saying in a press release.

However, he said the study has sought to capture the ground situation and in no way reflects an endorsement by Assocham on the use of money power in elections.

We stand for elections, which are free from money and muscle power and do not support a huge budget, even though the economy may get a consumption boost, he clarified.

Kunal Doley