Terms of Trade | Political finance: Can plunderers fight plutocrats?

Images of a mountain of currency notes unearthed by the Enforcement Directorate (ED) from the premises of an aide of West Bengal education minister Partha Chatterjee, due to the sheer vulgarity and scale of graft that led to accumulation of this wealth, have struck even the most cynical observers of Indian polity.

The raids were conducted as part of the ongoing investigation in the teachers’ recruitment scam in West Bengal. The fact that even the West Bengal chief minister has not tried to defend the minister in question — she seems to be more concerned about keeping the muck away from her doorstep — suggests that there was indeed wrongdoing in this case.

To be sure, West Bengal is not the only state to have reported malpractices in activities related to conduct of examinations for government jobs or other instances of corruption. The malaise, if anything, has been bipartisan for the longest time in the country.

While it is tempting to attribute the entrenched corruption in government and politics on account of some engrained urge for corruption and wrongdoing among the political class, this is at best a half-truth. At the core of political corruption lies the issue of political finance in India.

In 2019, Bloomberg reported that political parties spent around $8.7 billion in the 2019 general elections in India, making it the most expensive election in the world. While it is true that India has the largest number of voters in the world, it is also a fact that electoral spending is extremely high by the country’s average income levels. The fact that elected MLAs and MPs have assets much bigger than what an average Indian has, and viable candidates spend far in excess of the stipulated expenditure limit in elections is a well-known fact in India.

In fact, research shows that being rich is a huge advantage if one is fighting an election in India. An analysis based on asset data from candidate affidavits by political scientist Neelanjan Sircar — it is part of an excellent compendium Costs of Democracy: Political Finance in India edited by Devesh Kapur and Milan Vaishnav — has tried to quantify this question.

Sircar’s summary findings are worth reproducing here. “Competitive parties (that is, those parties that can conceivably win in a constituency) select candidates that are approximately 20 times wealthier than other candidates”, he writes. “But even among these wealthy candidates from competitive parties, the wealthiest candidate has a greater probability of winning the constituency. In the median constituency in terms of wealth differential between the top two candidates, the wealthier candidate is about 3.8 times wealthier than his or her competitor. In such a scenario, the wealthier candidate is 10 percentage points more likely to win the constituency than his or her competitor.”

To be sure, fielding rich candidates to improve chances of winning elections is just one aspect of the role of money in Indian democracy. Political parties, between elections, and especially during elections, spend a lot of money to take care of expenses beyond what the candidate spends in the constituency.

It is here that the Bharatiya Janata Party (BJP) has secured a huge advantage vis-à-vis its competitors in Indian politics. While there is more or less a parity in terms of candidate assets between the BJP and others – for example the median asset of BJP and Samajwadi Party candidates in the 2022 Uttar Pradesh elections was 4.1 crore and 4 crore – the former’s coffers have become far bigger than that of its competitors since it recaptured power in 2014. The BJP declared a total income of 752.337 crore during FY 2020-21, while the Congress’ total income during the period was 285 crore as per a report by non-government political party watchdog Association for Democratic Reforms (ADR)

There is good reason to believe that the BJP’s edge in political funding comes from disproportionate access to political funding by big business. “The Bharatiya Janata Party (BJP) far outstripped rivals in attracting large donations from business houses and individuals in the 2020-21 financial year, accounting for nearly 75% of all such funding, according to the mandatory annual contribution reports submitted to the Election Commission of India”, HT reported on June 1.

While India’s political finance laws required mandatory disclosure of source of any funding exceeding 20,000, the current government has short circuited this regulation by bringing in a law on electoral bonds in 2017 which has made it possible to maintain non-transparency – the identity of donors who fund political parties via electoral bonds is not revealed – while making large political donations. As is to be expected, the BJP has garnered far more funds under electoral bonds than all other political parties combined.

These statistics, when read with the context of the policy orientation towards forced formalisation of the economy, make for an interesting reading.

As the Indian economy becomes more formalised, big business is having access to markets which were hitherto not available to it. This is happening at the cost of smaller businessmen and petty producers which held sway in such markets earlier. Whether or not there is quid-pro-quo involved in such policy changes is not something which can be proved or disproved conclusively in India. Unlike countries such as the US, which have mandatory requirements for divulging data on lobbying expenses, no such information is available in India. However, a larger and generalised case about a synergy between the BJP’s formalisation push and its unprecedented advantage in access to big-business political funding can definitely be made.

In fact, one can go a step further and argue that because the BJP has centralised access to such big-ticket political funding at the moment, it is not as dependent on relatively smaller (and also more corrupt) sources of donations which are extremely critical for functioning of regional political parties. This also means that the BJP can “afford to” be relatively more intolerant vis-à-vis local level corruption, both within and outside its ranks, than its competitors.

A local businessman and a BJP supporter in Ranchi, whom this author spoke to while reporting on the 2019 Jharkhand assembly elections, had the best articulation of this. “Under the (previous) Jharkhand Mukti Morcha (JMM) government, you had to give 1.5% commission for bagging a big contract, and you could get away with substandard work and shoddy paperwork (read tax evasion). Under the BJP, the commission is 2.5%, but you also need to do good work and keep your papers in order. If you do not want to do it, bigger firms are willing to do so”, he said.

While it is nobody’s case that all cases of financial malfeasance against opposition leaders, which are currently being investigated by the central agencies are true, there is an element of truth to the claim that the BJP has been able to subvert political partisanship against it by political weaponisation of investigation into financial wrongdoings.

Where does this leave the opposition in the country?

At the level of rhetoric, it can continue to criticise the political abuse of investigative agencies and the ruling party’s attempts to intimidate, even falsely victimise, the opposition. However, one can argue with a reasonable degree of confidence that such polemics would have had a lot more credibility if mountains of cash were not discovered from the homes of ministers and their aides which belong to the anti-BJP spectrum in the country.

What makes the latest West Bengal example even worse optics for the opposition is the fact that money has likely been accumulated by plundering not the state, which is the case in case of tax evasion, but poor people who desperately wanted to get a government school teacher’s job. In more ways than one, it is as if the opposition is asking the people to support local level plunderers to wage a battle against plutocracy in Indian politics. Not only does this not leave the opposition looking any better, for the people, it is a choice between the devil and the deep blue sea. Can the opposition resolve this dilemma? Unless the question of political finance meets that of political morality, there cannot be a resolution to this question.

Ironical as it may sound, one of the most morally upright politicians India has had, came from the state of West Bengal. Ashok Mitra, arguably one of India’s best Marxist economists, was the finance minister of the Communist Party of India (Marxist) led Left Front government in West Bengal in its first decade. Being the morally upright man that Mitra was, he did not mince his words when he saw moral deviation from the principles the CPI (M) claimed to stand for. Mitra’s protests were not heeded to within the party.

In his autobiography A Prattler’s Tale: Bengal, Marxism and Governance, Mitra recounts the reaction of the CPI (M) leadership to his complaint about violation of rules by a young minister, probably the controversial CPI (M) leader Subhas Chakraborty, in the Left Front government.

“I implored the party leadership that they must take a stand: if our own ministers did not observe the rules, how would be discipline the members who belonged to the constituents of the Left Front? I was told to be magnanimous and forgive the breaking of rules by the junior minister. He was a hardworking comrade, he helped the party in many ways; he helped to raise funds. I was stunned”, Mitra wrote.

The CPI (M) has had to suffer atrophy in West Bengal for its failure to live up to the ideals the party claimed to champion. But Mitra’s words still leave a larger question which the entire opposition needs to answer. Will a present day Ashok Mitra, assuming such a politician were to even exist, receive a different answer from the party’s leadership, if he raised a complaint about financial wrongdoing of leaders within the ranks? If the answer to this question is a no, and it most likely is a no, the opposition must realise that it is fighting a Darwinian rather than an ideological political struggle against the BJP. As long as this does not change, the stronger side (which controls the state machinery) will always have an unfair advantage in such a battle.

The views expressed are personal