Solution without a problem

Governance Now, May 15-31, 2011

Anna needs to fast again, this time to address another key concern that the politicians don’t: high cost of elections that breeds and promotes corruption


The next time you see a TV anchor haranguing a numb studio guest, shouting, “Why don’t the Maoists stand for elections? Why don’t they come in to the mainstream?”, do SMS the channel saying, “Because they can’t afford your rates”.
— Arundhati Roy in her essay, ‘Mr Chidambaram’s War’

A day after Anna Hazare ended his fast, two senior politicians, Satyavrat Chaturvedi of the Congress and Mukhtar Abbas Naqvi of the BJP, were in a television studio discussing political corruption. Both, true to their wont, were defending the role of black money and muscle in electoral politics. Chaturvedi said political parties gave tickets to the criminals because they won elections. “For 40 years of my political career, I have seen honest candidates getting defeated by the dishonest ones.” It was the “winnability” which decided the ticket, he said. Naqvi said: “The truth is, an honest and poor worker like me loses elections because the rival spends a huge amount of money. You will find many in the parliament who have won because of their black money.”

That pretty much sums up the representative democracy that we have. An analysis of affidavits filed by the MPs by the National Election Watch (NEW) and the Association for Democratic Reforms (ADR) provides some startling facts and figures:

* MPs with pending criminal cases: 162 in 2009 (29.83 percent), as against 128 in 2004

* MPs with serious pending criminal cases: 76 (14 percent) in 2009, as against 58 in 2004

* Number of crorepatis: 315 in 2009 as against 156 in 2004

* Average asset of an MP: Rs 5.33 crore in 2009 as against Rs 1.86 crore in 2004

* For 157 MPs re-elected in 2009, their assets grew, on average, by 288 percent between 2004 and 2009

* Two notable cases of this: The Congress’ Bharatsinh Solanki’s assets grew by 3,003 percent – from Rs 9.96 lakh to Rs 3.09 crore. Union minister Sachin Pilot’s assets grew by 1,746 percent – from Rs 25.19 lakh to Rs 4.46 crore.

Just how much a candidate spends in the Lok Sabha elections? Ask politicians and they will tell you it is Rs 10-15 crore. Ask chief election commissioner SY Quraishi, he will say it is 20-30 times more than the ceiling, which means Rs 8-12 crore (taking current limit at Rs 40 lakh).

Remember, there were 8,028 candidates in fray in 2009 elections, though not all of them spent this kind of money. But if you go by their official declarations, the average expense comes to less than half the limit. Both the election commission and political parties acknowledge that it is a case of gross under-
reporting. Yet, the limit was raised from Rs 25 lakh to Rs 40 lakh (for Lok Sabha candidates) this February, but that is another story.

Also remember that the political parties also spend money which is not counted in the candidates’ expenses. As per the official records, the BJP spent Rs 162 crore in 2009 elections – of which only Rs 15 lakh was meant for the individual candidates/state units. The Congress spent Rs 380 crore – of which Rs 36 crore was meant for individual candidates.

Add the expenses of the candidates to that of the political parties and factor in under-reporting and you will know how much it costs to fight elections.

The significance of all these were pointed out by the National Commission to Review the Working of Constitution. In its 2001 report, it said, among other things, that “the sources of some of the election funds are believed to be unaccounted criminal money in return for protection, unaccounted funds from business groups who expect high return on this investment, kickbacks or commissions on contracts etc”.

When the politicians say that the Lokpal is not adequate to fight corruption, they are right.

Why elections cost a bomb
As the analysis by NEW and ADR shows, electoral politics is the most lucrative business around and our MPs are the best asset managers. Therefore, anyone with enough money to invest is getting into politics, raising both the cost and the subsequent return from it.

It wasn’t always so. Veteran CPI leader A B Bardhan says the high cost of election is a by-product of new economic and political policies in which maximisation of profit and making quick wealth motivate every activity. BJP’s Nirmala Sitharaman attributes it to the black money spreading its catchment area far and wide.
Jagdeep S Chhokar, former dean of IIM-Ahmedabad and a founding member of ADR, blames the political parties. He says they have stopped doing what used to be their conventional/fundamental activities – (a) mobilising public opinion and (b) acting as a bridge between the government and the people. Now, there is a complete disconnect between the people and their government.

“After the emergency, political parties have slowly and gradually turned into election winning entities, not far from private companies. They like making money, occasionally claiming to serve the people. Their objective is to win elections, whatever it takes, short of political work”, says Chhokar. Had they been working with the people they wouldn’t need a lot of money to win their votes.
To drive home his point, Chhokar says an ex-cricketer who contested 2009 elections and won began his campaign by offering Rs 100 a day for distribution of his party flags and pamphlets. There were no takers and he had to raise the stakes to Rs 200 a day to get willing hands.

How to bring the cost down
“You are looking for a solution to whose problem?” Chhokar seeks to know when the question is popped to him.

Indeed, it is nobody’s problem. Ask the election commission officials and they will tell you every move to improve the electoral system, including the measures aimed at cutting the cost, is foiled by the political parties. But they forget that it was on their advice that the expense limit was raised despite the candidates claiming that they are spending less than half of it. (see interview with Quraishi)
Ask the political parties, they will jump at the state-funding of elections, and for obvious reasons. They will then get public money to splurge. The last time serious attention was paid to the issue was when the NDA regime set up the Indrajit Gupta Committee in 1998 to consider state-funding. Though the committee spoke in favour, its report was dumped.

The only new idea that political parties have to offer comes from Congress leader Satyavrat Chaturvedi, who advocates proportional representation in place of the existing first-past-the-post system. “But my model would have suitable modifications to match our conditions. Which is that only the national parties shall be allowed to contest for the Lok Sabha and the regional parties the state assemblies. There shall be no candidates and the elections shall be fought on the basis of manifestos to be aired and debated in national media. Then, internal elections shall be held to select the members”, he elaborates.

It may bring the cost down alright, but whether it will strengthen our democratic participation and prove more useful is highly questionable. In any case, it needs healthy internal democratic practices in our political parties to work.
Chhokar’s suggestions, on the other hand, address more fundamental flaws in the system. He advocates two measures: (a) bringing in internal democracy within political parties and (b) ensuring financial transparency and accountability in their activities. He says since change can happen only by an external change-inducing force, these two measures should be legislated.

The problem is political parties don’t want any of it.

When former CEC T N Seshan tried to bring in internal democracy, the BJP countered it, insisting that “consensus” to decide office bearers was also a “democratic process”. Now it has a president who was forced on it by a “cultural” organisation, the RSS. The Congress had its last election to find a president in 2000 when late Jitendra Prasada challenged Sonia Gandhi and lost. Now, even the limited election to the CWC, its highest decision-making body, has been dispensed with, as if to justify Rahul Gandhi’s assertion that, “In a democratic India, there is no internal democracy in our political parties”. The less said about personality-driven parties like SP, BSP, RJD, RLD, TMC, DMK, AIDMK and others, the better.
“Winnability” is, therefore, the most reliable acid test these undemocratic leaders apply to find candidates and win elections.

Similar is the case with financial transparency and accountability. When the election commission asked political parties to go for independent audit of their accounts by a panel selected either by itself or by the CAG at an all-party meeting in October 2010, everyone present said “No!” Their reasons varied : “it amounts to interference in our internal functioning”(Nilotpal Basu of CPI-M); “our accounts are already audited by the CAs (D Raja of CPI)”; “let IT department take action if it isn’t satisfied” (Ravi Shankar Prasad of BJP); “we will agree if others agree (Abhishek Manu Singhvi of Congress)”.

The resistance is because of the existing cozy arrangement. All political parties file their annual returns to the IT department. The candidates submit their expense details and assets to the election commission. But these go unscrutinised.
Political parties collect most of the funds in cash – 95 percent by the Congress, 84 percent by the BJP and 100 percent by the BSP – as per the official records of 2007-08 and 2008-09. So, the source of income, a key deterrent, remains unchallenged. (BJP’s Ravi Shankar Prasad says nobody’s willing to contribute by cheque.)

This leads to piquant situations. In December 2008, about Rs 2.5 crore
disappeared from the BJP’s central office in New Delhi and, yet, not even an FIR was filed. Similarly, nobody turned up to claim more than Rs 60.10 crore, mostly in hard cash, seized during the recently concluded elections in Tamil Nadu.
There are other loopholes. Expenses incurred by the political parties during elections – mostly by way of hiring aircraft and ads in newspapers/TV channels-are not included in the candidates’ expenses, making a mockery of the expense limit. Political parties have thwarted every attempt to club the expenses.
UP chief minister Mayawati is a fine example of misusing political funding to feather her nests. She has bought a palatial house in New Delhi with party funds.
Without financial transparency and accountability, it is a free-for-all situation, which suits the political parties fine.

The third major step could be to prevent criminals, who use muscle and black money liberally, from contesting elections. The political parties are opposed to this too, on the ground that our judicial system presumes one innocent until proven guilty. If you think it means conviction by any court of law would do, you are wrong. It means conviction by the highest court of law (supreme court) after all the legal recourses available to one by way of multiple appeals and review petitions have been exhausted. In effect, it means never having to keep the criminal out.
The election commission offered a simple solution, which is backed by the Administrative Reforms Commission of 2007: Amend law to bar/disqualify anyone charged by a court of law with a criminal case punishable with imprisonment of five years or more. To check misuse, it proposed only those cases may be considered that were filed six months before the election. Nobody agrees to this.
Fourth step could be to follow what Madhya Pradesh chief minister Shivraj Singh Chouhan advocated for the Rajya Sabha at the Bhopal round of consultations on electoral reforms. He said (in December 2010): “There is open selling of tickets, it is like a market. It is a shame.” He suggested a quota should be fixed for the upper house and the members be nominated just as the representation for the Anglo-Indians is done.

The Rajya Sabha lost its status and defining character as a “council of states”, that is, representing the states’ interest, during the NDA regime when the domicile requirement for getting elected was withdrawn. We now have the spectacle of a Chandigarh-based industrialist K D Singh winning a Rajya Sabha seat from Jharkhand with the help of JMM and other smaller parties as an independent candidate and then declaring himself as a Trinamool Congress member in Rajya Sabha. Which state is he representing now? West Bengal. Which party is he representing now? The Trinamool Congress. Incidentally, Trinamool Congress doesn’t exist in Jharkhand, the state which sent him to the upper house.

Following Chouhan’s advice is not a bad idea.

Fifth, the EC officials favour handing over the campaign part to them. As per their plan, EC will provide a designated platform for all public debates and rallies and putting up banners and posters. This would mean no individual rallies or public meetings or buntings and posters anywhere else. It addresses visible elements of campaign but not the invisible ones – which thrives on black money.

Finally, none of these steps will succeed until and unless corruption and black money are checked or eliminated. This being a governance issue, it calls for holistic and radical changes in our legal framework, but, above all, political will.
As Chhokar says, no change can happen without external change-inducing force. This would, therefore, require Anna Hazare to sit on another round of fast at Jantar Mantar.

prasanna@governancenow.com

***

“State-funding is dangerous. It will not stop illegal expenses”


In a free-wheeling interview with Prasanna Mohanty, chief election commissioner
S Y Quraishi answers questions about what ails our electoral system and what he thinks will bring the cost of elections down


The election commission recently hiked the limit for election expenses from Rs 25 lakh to Rs 40 lakh for Lok Sabha candidates. What was the basis? Going by their own submissions, the average expenses of the candidates are less than half the old limit in the 2009 Lok Sabha elections. The limit should have been reduced by half.

They are under-reporting it, which is another issue. All political parties and candidates say they need to spend a lot more and that there is a need for rationalisation of expenses. We say the limit was fixed in 1996 – when it was increased from Rs 10 lakh to Rs 25 lakh. It should at least be rationalised to the extent of price rationalisation, rather than the real rationalisation, which the politicians were demanding. We need a debate in parliament for real rationalisation.

What is the basis for believing that the candidates are under-reporting?

Generally from experience and the anecdotal accounts. People tell us informally, something we can’t prove. Political parties too concede under-reporting.

As per the records available, only four MPs reported expenses over Rs 25 lakh in 2009 elections and all them lost. What action has been taken against them?

Spending more than the limit falls under the corrupt practices which can only be tried in high courts. For this, the losing candidate can file a petition. It is beyond us. Yes, there is a legal ambiguity here as such cases go untried if no one goes to the court. The election commission would like the law to be amended. Those exceeding the limit, even if they lose the election, should not get away.

Asaduddin Owaisi, MP from Hyderabad, was quoted in the WikiLeaks saying that the limit is a joke and that he would spend Rs 25 lakh on the polling day alone. His election expenses are not available on your website. What action has been taken against him?

How can you take action? It is not legally provable.

What happens to the cash and goods seized during the electioneering?

If we are satisfied, we release them. We are concerned about the end use, not the source. If it is meant for bribing the voters, we don’t return it. We pass on the information to the IT department. It is seized by the IT and goes to the treasury.

What steps the election commission is taking or proposes to take against political parties who collect funds mostly in cash and also spend huge amounts in cash during the elections?

We have been asking all the political parties to accept funds by cheque only and get all their accounts audited by the CAG approved audit firms. They are not agreeing to these. We would like them to reconsider these.

You have described state-funding of elections as “dangerous”. Would you please elaborate?

This is no solution. Basically, we are not worried about the legal expenses but the illegal expenses in elections. State-funding will not stop illegal
expenses. In fact, more money will be available to the candidates.

What is your opinion on including the political parties’ election expenses in the candidates’ expenses?

Under the law, election expenses incurred by the political parties in connection with the election campaign of a particular candidate is already included in the candidate’s expenses. The exception is only the travel expenses of the party leaders who are known as star campaigners.

You have said opinion polls can be manipulated because of the ‘paid news’ phenomenon. Do you propose it to be banned? If no, why?

The election commission has already recommended to the government for the ban of opinion polls. All political parties have also demanded this.

Political parties are submitting their IT returns. What follow-up action is taken by the EC to bring accountability and transparency in the way they collect funds and spend it?

Income tax returns are filed by the political parties with the income tax authorities. However, the election commission has recommended that the accounts of the political parties should be audited by the auditors
appointed by the Comptroller and Auditor General of India, and such audited accounts should be published annually.

You have said a candidate charge sheeted by court should be debarred. What follow-up action you have taken to make this a reality?

Our proposal requires amendment to the law. The election commission has already taken up the matter with the government and it is also one of the items in the agenda for the electoral reforms which is now being discussed at the regional consultations.

Finally, what measures would you suggest to cut down election expenses of political parties and candidates?

The commission has taken several measures to control election expenditure of political parties and candidates. Apart from advising political parties to exercise self-restraint, the commission has asked candidates to open separate bank accounts and incur all expenditure by cheque from the said account. So far as the bribing of voters is concerned, which is illegal, the commission has taken firm measures like flying squads and surveillance teams and has associated income tax department to keep close vigil over movement of cash.

My suggestion is if there is total transparency in the accounts of political parties and auditing of accounts by independent auditors, this will restrain excessive expenditure by the parties. We have already suggested for amendment of law to bring a ceiling on election expenditure by political parties and at present there is no ceiling on election expenditure by political parties. I have further suggested that the bribing of voters should be made a cognisable offence, so that the offenders can be detained at the time of election. n

prasanna@governancenow.com