Policy Watch: Cash still rules in Indian elections
More than electoral bonds, cash is still king.
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Last week, our Policy Watch looked at the Supreme Court judgement calling the electoral bonds scheme in India unconstitutional. But only (!) £1.5 billion was raised through these bonds since 2018, which is a nowhere near the monies spent on Indian elections (which are, alongside the US elections, the most expensive in the world).
The Centre for Media Studies estimated the last Lok Sabha elections saw a whopping Rs 55,000-60,000 crore expenditure (£5.5 - 6 billion).
What explains the majority of this spend? This week’s Policy Watch is courtesy of political strategist Amitabh Tiwari. Scroll down for more.
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Policy Watch: Cash still rules in Indian elections
One of the charges levelled by the Opposition towards the BJP is that the ruling party gets an undue advantage during elections as it pockets a majority of the funding through corporates. (Because the bonds are purchased through specific branches of a public sector bank, the government knows who is giving what money to whom, but the public doesn’t know, and neither does the Opposition).
The data paints a mixed picture.
According to the figures compiled by the Association for Democratic Reforms (ADR) for 26 tranches of electoral bonds from March 2018 to April 2023, the BJP got half of a total of Rs 12,979 cr (£1.2 bn) donations, while Congress and other regional parties netted the other half.
For example:
The Trinamool Congress (West Bengal) received 99.4% of its total donations from electoral bonds.
Over 99% of the DMK's (Tamil Nadu) donations were from electoral bonds.
Last year, AAP (Delhi, Punjab and elsewhere) received just over half of its donations through electoral bonds.
BJD (Odisha) received 100% of its donations via electoral bonds.
The Centre for Media Studies figure of £5.5 - 6bn expenditure in one Lok Sabha Election, divided by 543 Lok Sabha seats, means around Rs 100 cr (£1m) per seat an average.
The Election Commission of India (ECI) mandates only Rs 95 lakh (£95k) is spent by a candidate on Lok Sabha polls.
In other words, the actual spend is many times the mandated maximum limit, assuming each seat has just 2-3 high-spending candidates.
According Amitabh Tiwari’s analysis of the ECI website, 32 national and regional parties together spent Rs 2,591 crore (£250m) during the 2019 general elections. This is not even 5% of the total amount spent during elections, as estimated by the Centre for Media Studies.
What explains the rest? Cash.
Amitabh argues electoral bonds helped companies that do not generate cash, such as the services industry, to participate in electoral funding through legal ('white') channels. That option is now closed for them. He says one of the arguments made against electoral bonds is that the ban would stop the quid pro quo between political parties and large corporations.
However, he says since the actual amount received through the bonds is negligible, any quid pro quo is unlikely to be impacted by the Supreme Court order.
Sources: NDTV.
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