For political parties, election time means 'achhe din', says analysis

Political parties experience a significant increase in their incomes when elections are around. Each of the three previous elections has seen their total income rise 50-125 per cent in the financial year ending closest to the elections, compared to the previous year.

The total income declared by all parties was up 58.4 per cent year-on-year to Rs 1,577.2 crore in 2013-14 (FY14). The year saw a significant spurt in total income compared to the previous year. Growth in FY13 was 16.3 per cent. Similarly, income grew 103 per cent in FY09 compared to a 43.67 per cent rise in the previous year. The figure for FY04 was 123.7 per cent compared to -3.77 per cent in FY03.

The Business Standard analysis is based on the financials of seven national parties, based on data compiled by non-governmental organisation Association for Democratic Reforms (ADR). The organisation maintains data relating to politicians and political parties. The above data is compiled from the annual financials of the Bharatiya Janata Party (BJP), the Indian National Congress (INC). It also includes the Nationalist Congress Party (NCP), Communist Party of India (Marxist) (CPI(M)), Bahujan Samaj Party (BSP), All India Trinamool Congress (AITC) and the Communist Party of India (CPI).

The share of money-flow seems a good indicator of which party forms the government. The BJP-led government was widely expected to come back to power in 2004, but the Congress formed the government. Interestingly, the money flowed to the Congress even before the elections. It accounted for the largest share of income in the financial year ending closest to the polls. A total of 48.7 per cent of the total income for the seven national parties declared during FY04 went to the Congress. Some of this may be because of legacy share in income as the longest-ruling party in the country. But the BJP’s share also dropped in the same period, showing that it had lost ground. It fell from 35.2 per cent in FY03 to 29.1 per cent in FY04. 

A similar trend is seen in FY08. The Congress share rose from 44.7 per cent in FY08 to 49.5 per cent in FY09.

The BJP’s share crept higher than the Congress in FY14. It rose from 32.5 per cent in FY13 to 42.7 per cent in FY14, when the Congress share dropped from 42.7 per cent to 40.9 per cent. The BJP formed the government with Narendra Modi as the Prime Minister. 

The share for FY19 was not immediately available. This would be the immediately comparable year to FY04, FY09 and FY14. However, the BJP’s share has been rising in each of the last five years. It has risen to 73.5 per cent as of FY18. The share of the Congress has been dropping. It was at 14.2 per cent in FY18. This is its lowest since at least FY03.

An August 2016 paper ‘How Money Drives US Congressional Elections’ noted the importance of money in such contests. The authors, Thomas Ferguson and Jie Chen of the University of Massachusetts Boston, and Paul Jorgensen from the University of Texas; looked at major party votes in elections in the United States from 1980-2014 and noted that capital can have a significant impact on outcomes. “…money’s independent influence on elections remains powerful,” it said.