Politicians, voters, and the doublespeak on black money

The Union Budget 2017-18 has flagged the linkage between election financing and the black economy. Donations of above Rs 2,000 to political parties have to be declared as compared to the present limit of Rs 20,000. Further, the RBI will issue electoral bonds so that legitimate money can be donated to political parties without fear of being identified by the ruling dispensation. Contributors do not wish to be identified as giving money to the opposition parties lest they be harassed by the ruling party and that is why they wish to give secretly. It is argued that black money is required in elections because they have become expensive over time while the election expenditure limits have remained low in comparison. It is said that much travel is required in a constituency within a short time and that costs a lot. Further, party workers have to be paid and transport and food arranged for them. Rallies, posters, and other publicity material cost a lot of money. Any expenditure over and above the election expenditure limit cannot be officially declared without inviting disqualification and therefore has to be in black.

Elections are high stake since access to power to influence decisions is important for lobbies wishing to push their narrow agenda. These lobbies invest in candidates and are willing to finance their elections. Candidates promise the moon during election campaigns, but when in power, hardly deliver on their promises. Hence, there is a huge credibility gap for those in power. People’s trust in politicians has been declining over time. However, the public has little choice since the opposition and the ruling parties behave similarly as far as delivery is concerned. That is why the public defeats most ruling parties from one election to the next whether at the Centre or in states. This is what is often referred to as the incumbency disadvantage.

So, parties and candidates who have lost credibility need to woo voters by spending a lot of money. Parties play vote-bank politics.They create their own vote banks by creating divisions in society by promoting caste, community and regional differentiation and polarisation. Maintaining these vote banks is expensive and those who control vote banks need to be kept happy. Various tricks are adopted to confuse the voters by propping up candidates with similar sounding names as their opponent. The expenditure of these dummy candidates is borne by the candidate putting them up. Since this is illegal, it has to be funded out of illegal funds. Goons need to be hired to protect oneself and also to disturb the opponent’s rallies or to browbeat the opponent’s supporters.

The phenomenon of ‘paid news’ has reared its ugly head in the past two decades and more. Candidates admit to paying local papers by column centimetre for favourable publicity during election time. Further, even if favourable news is not given, at least adverse publicity should not take place. This being illegal, requires payments in black. Candidates in India spend a lot of money in the last three days before polling in distributing cash, clothing, blankets, food, and drinks. This can amount to one-third of the expense incurred by candidates. Since this is also illegal, it has to be done in black cash.

The voters have also got used to being wooed by candidates and expect the goodies to flow at the time of elections. Their psychology is to get what they can since delivery on the promises is rare.

The issue of corruption and black economy gets marginalised in elections. This is not only because all parties have charges of corruption against them, but more importantly, voters believe that my man’s corruption has the potential to benefit me. The fellow belonging to my caste would do my illegal work, while the fellow of another caste would not. Also, an honest candidate would not do my illegal work so it is better to elect someone who is seen as a doer. Thus, each community votes for its corrupt and this marginalises the issue of corruption and black economy. Parties are not only like Tweedledee and Tweedledum, but they fool the public about their real intent, which deepens cynicism and distrust in the public. No wonder candidates can stand from a constituency where they have done little political work. All they need is a well-oiled machine and lots of money to buy votes.

At the time of an election, the executive and the business class who wish to have their candidate win, donate money with the clear understanding that there will be a quid pro quo after the elections. Thus, come election time, a ‘Triad’ emerges between the corrupt politician, the corrupt businessman, and the corrupt executive. Once in power, this Triad then rules to favour its constituents by setting favourable policies. It is not that huge sums of money are spent in elections. Less than 0.5 per cent of the GDP is spent on a national election. Spread over five years, it becomes 0.1 per cent of the GDP. However, the importance is that the Triad is created which enables illegality and black economy to flourish. State funding of elections has been suggested, but this may become additional to the funds spent by candidates. State funds cannot be spent on illegal activities for which the black funds would be additionally needed.

In brief, genuine representation of the people would not need a lot of money but it is needed by pliable politicians controlled by the vested interests who want to control power for narrow ends. So, the problem is one of a weakening democracy where representation is in a form but not content, and this has led to a wide variety of malpractices which then require dirty money. The public itself needs to reflect on its behaviour and vote against the corrupt no matter which party they are from. This requires a change in consciousness which can only take place through sustained movements and not by mere changes in some laws or provisions.

(Arun Kumar is the author of Understanding the Black Economy & Black Money in India, An Enquiry into Causes, Consequences and Remedies published by Aleph Book Company)