Thoughts on economics and liberty

Not one reason to be honest – Part 2

Good Candidates Prevented from Contesting

Conducting a general election costs the Election Commission hundreds of crores of rupees. We are quite happy to support such expenditure. But we quickly baulk at the likelihood that candidates, too, need to spend similar, if not greater amounts of money, collectively, to take their message to us. India is a mega-democracy; each of our electoral constituencies covers an enormous area and population. The population of some of our constituencies equals the population of countries like Bhutan, Kuwait, or Macedonia, comprising about 20 lakh people each. To reach out and persuade each voter is therefore a very expensive task. Costs mount rapidly, and include:
  • Organizing and paying for public meetings for the hundreds of workers involved, including paying for their transportation and food, as well as for posters and pamphlets.
  • Once candidates are elected, money is needed to look after persons from their large, primarily illiterate, constituency who land up at their doorsteps each night for succour (an Indian MP’s official house in Delhi often looks like a railway waiting room with people sprawled about).
  • Continuing costs of retaining key campaigners for the next election; MPs and MLAs often distribute significant amounts of personal money to various organizations in their constituencies, such as youth clubs in remote villages, to ensure support for their future campaigns.

Indian politics is therefore very daunting, not only being sweaty, grimy and fraught with risks to life, but also very expensive. The questions that arise are:

  • Who ultimatelypays for these expenditures?
  • Are there limits on such expenditures? If so, why and how are these monitored? What is the penalty for breaking expenditure limits or for not accurately reporting on the funds raised and spent for a political purpose?
  • What is the ‘take-home’ salary of a political representative upon being elected? Is this occupation financially rewarding?
The answer to the first question above is very simple. Indian voters do not have a tradition of joining political parties or of funding them. Therefore, almost the entire money used in elections is purely black money, i.e. unaccounted money; undeclared wealth.
With regard to the second question, legal limits exist on what amounts can be spent in an election campaign. Under Rule 90 of Conduct of Elections Rules, 1961, made in pursuance of s.77 of the Representation of the People Act, 1951, the limit of expenses which can be authorized by a candidate in a parliamentary constituency election is Rs 25 lakhs. Note that this expenditure has to be authorized by the candidate; after that it doesn’t matter who spends it. For instance, a candidate’s political party can spend the entire amount if so authorized by the candidate. Excluding the travel expenses of leaders of political parties, and expenses made on behalf of a candidate but not authorized by him, all other expenses must be declared. There is a microscopic penalty if someone spends for a candidate without authorization. According to s.171 H, anyone who incurs or authorizes expenses on account of the holding of any public meeting, or upon any advertisement, circular or publication, or in any other way whatsoever for the purpose of promoting or procuring the election of a candidate ‘without the general or special authority in writing of a candidate’ commits a crime punishable by a magnificent Rs. 500! Therefore, on pain of this measly penalty, no one supposedly spends any money on behalf of candidates! Of course that’s not true! Indeed, unauthorized spending is the single largest loophole in the electoral expenditure accounting system.
But pausing for a moment, let us explore how well or otherwise the very idea of limits sits in relation to our freedoms. Is this limit of Rs.25 lakhs, or any limit at all, compatible with freedom? And the answer is to be a resounding ‘No’, for the following reasons:
  • As a general rule, a citizen in a free country can spend any money he wants to, on any legal activity. There are no limits on how many shirts a person can buy, or how many advertisements he can take to sell his product. Contesting elections is a legal activity, indeed a basic obligation of citizens. Therefore, limiting expenditure on elections is wrong on first principles. Freedom of expression and belief also calls for scrapping election expense limits.
  • There is nothing stopping us from supporting a religion of our choice. Similarly, free peoples are entitled to support political parties with unlimited funds if these parties represent their views. If a party becomes ‘rich’ through this process, and is able to spend more at the time of elections, that is unexceptionable, since it represents a genuine support base. We are talking of a democratic ‘market’ for policy here. I should be free to support liberal political parties should I find any!
  • Those who seek to limit expenditures possibly do not trust in their own judgement as voters. For trying to block expenditures would imply that Indian voters are influenced purely by the number of advertisements put out by a candidate. This view completely denies that policies matter. And yet we know that the Indian voter is clever enough to take unsolicited ‘bribes’ from all rich candidates but vote only for the one he or she believes in.The critical thing is to ensure complete secrecy of the ballot. Expenditure on campaigns is never a real issue. And so long as substance and policies also play a role in the minds of voters, we have nothing to fear.
  • We must either have a free democracy or have none at all. All this intellectual posturing and putting arbitrary limits smacks of statism and the dictatorship of the elites. Let’s get out of this paternalistic frame of mind and start respecting people’s choices!
  • On a practical note,expenditure limits create incentives to lodge fraudulent accounts of electoral expenses, thus destroying the sanctity of the laws of the land. Today, almost all candidates in India, particularly those from the large political parties, exceed the expenditure limits by a vast margin, in the order of ten times or more than the expenditure limit, even as they continue to sign off on false statements of accounts. The question is, are we adult enough to live with reality? Do we want the truth, or do we want to deliberately pull wool over our eyes?
  • There is a practical example that can ease some of our artificially inflated worries about expenditure limits. The US experience clearly shows that money can’t buy electoral victory. US presidential campaigns allow unlimited amounts of money to be raised and spent, so long as these amounts are fully declared. Ross Perot spent over $65 million of his own money in 1992 but got absolutely nowhere. This clearly shows us that throwing money at voters is not good strategy, without substance. The Indian voter is not the same as the American voter, but we must not presume that our ‘masses’ are fools.

In brief, there are very good reasons why expenditure limits for political purposes need to be abolished. And at the same time, our extremely weak mechanisms to account for political expenditures need to be significantly beefed up. Stringent requirements on the verifiable disclosure of expenditures will force political parties and candidates to stop using tons of black money in elections. If clean money is used to promote political ideas or candidates, then we really have nothing to fear. Good ideas need to be sold too. Even the outstanding ideas of freedom that this book is promoting cannot reach everyone in India for free. If a political party wants to preach freedom, it will have to write and print brochures; people will need to be physically met with and spoken to. Even preaching freedom is not free! 

[This is an extract from my book, Breaking Free of Nehru.] 

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