Thoughts on economics and liberty

Reforms of Political Representation in India

While Equality (socialism) and corruption are lifelong buddies and room-mates, Freedom (capitalism) and corruption are arch enemies. A free India can’t condone even the tiniest bit of corruption. We must become the least corrupt country in the world if we want to be called free. The following four actions will help to eliminate political corruption and also dramatically improve India’s governance:

  • Raise the wages of MPs and MLAs at least by a factor of ten while simultaneously getting rid of all of their ‘perks’. Let us pay the Prime Minister of this great nation at least what a middle level business executive of a very large multi-national firm gets, say Rs. 1 crore per year, and MPs Rs.20-30 lakhs each. As it is unpopular for politicians to raise their own salaries, we can help them by setting up an independent commission that would determine their wages. There is also atendency among politicians to add to their perks if their wages are kept low by public pressure – this is a significant problem for India. In India some MPs also allegedly sell some of their perks, such as their free air tickets. That is surely criminal. Perks are also expensive to administer. Let us therefore get rid of all perks once salaries are raised, and only reimburse actual expenses incurred on the job, for instance, eligible travel expenses. Let openness and transparency on such basic matters prevail in India; a free society can’t expect anything less than that.
  • We must fund our elections differently – through state funding. The purpose of the wages of MPs or MLAs is not to cover the expenses incurred during elections, but to pay them competitively for their responsibilities. Even if wages are hiked, we will still need to find a way to make the electoral expenses manageable. We can do so by state funding of elections. A simple and effective method that will pay Rs 25 or thereabouts, at current values, for each valid vote cast in favour of a candidate is outlined in Box 3. A system similar to this operates successfully in Australia, where about $2.10 (about Rs 66) is paid at present by the government for each valid vote polled by a candidate.[i]
Box 3 
State Funding of Elections
Let us revert to Mr Harishchandra’s original calculations. A small payment made for each vote polled by a candidate radically alters the expected financial burdens on candidates. It makes it viable for a much larger number of people to participate. The field of candidates changes from less than 1 per cent of the eligible population at present to potentially the entire adult population. Here’s how:
Let a payment of Rs X be made per vote polled, with n = 6 and θ = 0.02, as before.[ii] Mr Harishchandra expects 10 lakh voters to cast their vote at the election. His expected PVreturn now becomes:
With a government payment (X) of only Rs.8.39 per vote cast in his favour, Mr Harishchandra can expect to break even after spending Rs 20 lakhs of his own money on the election. This still leaves him with no income after repaying his loan. A payment of around Rs 25 per vote will make it practicable for Mr Harishchandra to contest the election, even with six serious candidates flanked against him. He is empowered by this method to take a calculated risk. The electoral fray now becomes a genuinecontest, not suicide.
Mr Harishchandra may, of course, still hesitate, since corrupt candidates will continue to spend huge amounts of black money without any accountability and threaten honest people should they attempt to contest. With strong auditing systems, anyone found using black money will be thrown behind bars. Further, over time, the new incentives created by state funding will allow many more honest and competent candidates to contest. There will finally come a turning point when morally challenged candidates will be shut out completely by the public which will only choose to vote for good candidates.
  • Third, we need to abolish election expense limits while simultaneously building extremely strong audit systems for monitoring the contributions received and expenditures made during elections.
  • Finally, a wider set of reforms of the electoral system will be needed, such as making public the property returns of our candidatesin the interest of greater transparency. These and other such reforms are touched upon in Chapter 6.

A One Rupee Freedom Movement 

The level of corruption in a society essentially depends on two factors: the opportunity available for corruption and incentive for corruption.
  • While I haven’t discussed the issue of opportunity in this chapter, our socialist regime – which empowers our governments to interfere virtually in each activity of ours – has clearly provided a wide range of opportunities for corruption in India to a wide range of political representatives and bureaucrats.
  • On the second of these factors, this chapter confirms that Indian politicians have a great incentive to be corrupt.
This is also an apt place to inform the world that not all Indians are moral pygmies. We do continue to have a large number of honest people that the world never gets to see or hear of, because the combination of our socialism and shoddy electoral system prevents anyone but the corrupt from rising to the top. Our system also breaks the back of the honest; completely demoralizes them. The world will, of course, ask us: ‘You’ve had 60 years of independence, so why can’t you get your own house in order?’ To which we must ask the world to be patient, for we have only recently started recognizing the causes of our problems. And we have hardly started our journey on the path to freedom. Our citizens are very sleepy headed and not yet awake either.
We, the sleeping citizens of India, must wake up and take responsibility for allowing these major flaws to develop in our democratic system of governance. We are also responsible for letting the weeds of socialist corruption overwhelm the fledgling tree of democracy and freedom in India. To scare the wits out of our corrupt representatives and to make them start paying attention, let us begin by going to our district officers today, and, for only one rupee each, get our own copy of a recent set of electoral accounts. Then, let us study these accounts and raise the issues we discover in our local press, and write to the Election Commission. That will be a very effective way to start a real freedom moment for India. We can call it the one rupee freedom movement.
This is an extract from my book, Breaking Free of Nehru.

[ii] It is assumed as before that Mr Harishchandra expects to poll one vote more than 1/6th of the votes polled, and therefore will not forfeit the security deposit.

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2 thoughts on “Reforms of Political Representation in India
  1. Vijay Mohan

    Hi Sanjeev,
    Just heard Annas interview on TV … Electoral reforms are in there agenda ..( A slight hint to election expenditure is given) .. I do hear decentralization in some of there statements..
    It seems they have some idea of Good policies.
    I hope to see them implementing these reforms..

  2. Sanjeev Sabhlok

    Dear Vijay

    What kind of a democracy are we trying to run in India where the ELECTED representatives bend to the will of someone who threatens to kill himself?

    Please let Anna and others join/form a political party and then contest, and THEN implement their reforms.

    They have no mandate to distort the democratic process by running a government OUTSIDE the parliament.


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