Debating India


The Public Warchest

Prem Shankar JHA

Monday 14 June 2004, by JHA*Prem Shankar

The CMP stand on state-funding of elections could rid politics of its vices

Virtually all the reports in the media on the government’s Common Minimum Programme have concentrated on the economic portion. Hardly surprising, considering that the first three quarters talked of nothing else. This is a pity because the CMP contains a number of other commitments which, if implemented, could revolutionise the politics and administration of the country and bring a huge measure of relief to its people. Perhaps the most important of its promises is buried three quarters of the way down in a section titled ’Administrative Reforms’, and reads as follows: "As part of its commitment to electoral reforms, the UPA will initiate steps to introduce state funding of elections at the earliest ."

This commitment attracted not a single line of comment in the Delhi newspapers and, as far as I was able to judge, not a single word from any of the talking heads in the TV world. Which is a pity because it suggests to those who drafted this portion of the CMP that the Indian voter is simply not interested in structural political reforms. If that is so, then why bother? The truth, however, is that if this reform is implemented wholeheartedly, it will begin the cleansing of Indian politics that the poor, in particular, had almost given up hope of ever seeing.

Those who have not studied Indian politics, or do not have long memories, may ask whether this would not be throwing still more good money after bad. Is it not naivete to believe, they may wonder, that offering to meet the cost of elections will make an MLA, an MP, a party or a government stop taking bribes, extracting commissions and kickbacks on government contracts, and working out deals with dubious financiers in exchange for favours to be dispensed upon coming to power? Is there any limit to human greed? If not, then won’t candidates take advantage of state funding, and still continue to take the bribes and kickbacks?

These doubts are well-founded, but the purpose of state funding is not to remove temptation from the path of individual politicians. It is to lift the compulsion that Indian political parties have laboured under since the ban on company donations was enacted in 1970-to turn a blind eye to crime and to criminals so long as they produced money for the party. Over the 34 years that have elapsed since the ban was enacted, political parties have first extracted money from industrial houses in cash, then turned to criminal elements such as smugglers, bootleggers and the various mafias such as the builders in Mumbai, the coal transporters in Dhanbad, and finally to kickbacks on foreign deals, especially in defence equipment, to meet their insatiable need for funds. In short, it is the lack of a transparent and honest system of electoral funding that has been responsible for forging the link between crime and politics that has corrupted the police, paralysed the judiciary, and finally, turned Indian democracy into a hollow sham.

Provided it is carried out on a generous scale, state funding of elections will free the elected leaders of political parties from their dependence on shady fund-raisers who operate in the grey areas of the economy and on the fringes of the underworld. It will thus end the dichotomy that now exists, in which elected party leaders bear the responsibility for running a party while the real power lies in the hands of shady financiers, many of whom are criminals with criminal records as long as one’s arm. State funding will also enable honest people who either do not have the money needed to fight elections or cannot gamble their life’s savings on a single throw of the dice to aspire to a political career. Political competition will force all parties to prefer such candidates to those with shady records. The various electoral reforms that have empowered the Election Commission to demand and publish candidates’ assets and criminal records will finally acquire teeth.

These benefits will flow, however, only if the system for state funding is properly constructed. The most important requirement is that it should meet all of the financial needs of the parties, and not just a part of it. If it does not do that, the parties’ dependence on criminal elements to finance them will continue. Second, the money in the fund should not be distributed in any form (such as TV time) to individual candidates but must go to the parties to which they belong. Third, the share of each party must be proportional to its share of the vote in the last elections. Fourth, the money should go only to recognised political parties. The Election Commission will have to establish a criterion for recognition. This is usually a minimum share of the vote. Fifth, there will have to be separate warchests for the central and state assembly elections. Lastly, every paisa of expenditure from these funds will need to be audited. The Election Commission will have to be expanded and equipped to carry out this task.

If Dr Manmohan Singh’s government can carry out this reform, it will leave its mark on the face of India for all time to come.


in outlook India, Monday, June 14, 2004.

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