Cash for votes

The use of money power needs to be contained

Populist promises in the runup to elections are becoming a normal feature in Indian politics. But political parties and candidates do not stop at promises to be fulfilled through the state exchequer because those may not be enough to win elections. Enormous amounts are spent on running campaigns and enticing voters. As the Central Board of Direct Taxes Chairman Nitin Gupta noted on Wednesday, more cash has been seized in the states going to the polls now than in the previous elections. Reportedly, for instance, the seizure of unexplained cash in Rajasthan this year has been above ~1,000 crore. Given the systemic constraints and the regular workload of the tax department, it is reasonable to argue that this could just be the tip of the iceberg. The use of money power is not a problem limited to one state or another. In response to a public interest litigation (PIL) petition in the Supreme Court, the Election Commission of India (ECI) in an affidavit earlier this year had said that it was “seriously concerned about the increasing use of money power in elections”. It also noted an effective mechanism had been put in place to monitor expenses.

However, anecdotal evidence and news reports suggest that the use of money power is only increasing. This trend is unsettling and raises a number of questions, not only about elections but the system as a whole. First, where does this unaccounted money come from? This is clearly part of the unaccounted cash generated in the system, possibly with political patronage to influence the political process. The cash in circulation has gone above the pre-demonetisation levels. The funding, either by the candidates or their supporters, is aimed at gaining political power with the only possible objective of profiting from the system. In such a situation, the political system may not be able to act objectively in the interest of society.

Second, how is this unaccounted money used? It may be used partly to fund the campaign because the limits set by the ECI are seen to be inadequate. It may also be used, as various reports in the past had suggested, to directly influence voters by giving cash or goods, which clearly undermines the political process. Third, is the money power affecting the democratic process? As seen in marketplaces, higher entry barriers limit competition and lead to suboptimal outcomes. It is indeed very difficult for newcomers to compete in Indian politics, which has led to the concentration of power at different levels. This is also one of the reasons why India has so many political dynasties. Most serious contestants these days are crorepatis.

To be sure, some of these problems are well known, but society has not been able to do much about them. Theoretically, it is the responsibility of the ECI to ensure free and fair elections. Excessive use of money power disrupts the level playing field. The ECI has been working in this direction but will have to do more, possibly by using the existing bureaucracy more effectively and acting against those violating the rules. There is an evident need to overhaul electoral finance because it is also the source of multiple other problems in the system. But this would require legislative support, which may not be forthcoming. The ECI thus is left with the option of increased surveillance and decisive action. It can also run mass campaigns to sensitise voters.