COMMENTARY
INTERVIEWS
USEFUL INFO
CREDIT POLICY
BUDGET 1999-2000
ARCHIVES
SEARCH REDIFF

The Rediff Business Special/Neena Haridas

Election 99 spawns businesses worth Rs 10 billion

Democracy is not a commodity which can be bought cheaply," riposted T N Seshan, then Chief Election Commissioner, when people made noises about the huge cost of his decision to offer identity cards to 650 million voters in India. Seshan has since morphed into a Congress party candidate in the Gandhinagar Lok Sabha constituency, pitted against Union Home Minister L K Advani. But he would still swear by his observation that democracy does not come cheap, especially in India. A whopping Rs 80 billion is expected to enter circulation because of the national election!

Come to think of it, India has had three elections in the last three years, two of them in a span of 17 months, as against the constitutional stipulation of one election in five years. Media reports likened this year's election razzmatazz to American presidential campaign style, backed up by advertising experts, marketing strategists and public relations practitioners.

For many, the election throws up money-making opportunities. The advertising agencies, poster makers, graffiti painters, truck and autorickshaw (three-wheeled public transport vehicles) owners, makers of dye-stuffs, banners, flags, giant-size cut-outs, stickers, badges, pamphlets, manufacturers of electronic voting machines, audio and video products, bamboo and scaffolding traders, chartered aircraft and helicopter companies, khadi cloth sellers, motor vehicle fuel filling stations, shamiana-pitchers (shamiana = huge tent), to name a few, find a silver-lining in elections.

The money is spent on campaigning, buying gifts for voters, hiring trucks, cars and autorickshaws and "buying" audiences for the umpteen rallies organised by sundry politicians. As economists say, it is the time when black money goes white!

Take transport. According to Charanjit, who owns a taxi service in Delhi, business is brisk. "This year the candidates not only hired vehicles for their own use, but also for transporting voters from their respective homes to the polling booths. This is a trend that started during the last elections. We charge about Rs 50 for every trip we make to the polling booth and charge the candidates about Rs 2,500 per taxi on the campaign trail. We make a couple of rounds of the constituency calling out for the voters on our loudspeakers. Sometimes, we dedicate a fleet of taxis to a particular candidate and charge him/her accordingly," he says.

The real boom has been thanks to the electronic media. With 24-hour satellite channels ripping the politicians with help from "experts" and psephologists, a new genre of money-makers has entered the scene. These experts are reportedly paid up to Rs 100,000 for their brief "projections" and "expert comments"on the small-screen.

Media commentators have pointed that this year's election has seen a clash of personalities, not political parties. Vajpayee versus Sonia. Advani versus Seshan. Sushma Swaraj versus Sonia. Pramod Mahajan versus Ghulam Nabi Azad. Bal Thackeray versus Sharad Pawar. There has been a conscious creation of brands and counter-brands. Vajpayee is now a national brand.

Besides the demand for brain, there is a need for brawn -- the muscle-men. Political parties in several states have allegedly 'imported' hordes of toughs from Bihar and Uttar Pradesh, paying them about Rs 1,000 per head. Their brief is to control any 'smart' moves by the opponents that would steal the wind off their sails.

Along with them come the audiences to make the numbers for the 'mass rallies' or 'public meetings'. Political parties with the help of their local henchmen bring in truckloads of poor farmers and labourers from various parts of the country to attend rallies organised by top politicians. These farmers and labourers get a measly average allowance of Rs 150 for their uninterrupted attention and applause.

Navin Chandra, a local party activist in New Delhi, says, "There are people in Bihar and UP whose main occupation is attending political rallies. They move from one city to another depending on the party and the politician involved. They really have no loyalty nor do they understand what is being said, but the money is what brings the applause."

There is a segment that is a recent beneficiary -- the advertising industry. Unlike good old politics, the new-age politics comes with its media-savvy politicians who know what it takes to strike the right chord with the masses. Hence, ad agencies are working overtime, churning out jingles for Vajpayee and Sonia Gandhi. In fact, the BJP and Congress had a war of words in half-page ads in national newpapers.

Rajeev Desai, who owns public relations firm IPAN, has been drafted to offer a crash course to Sonia Gandhi in media management during elections. The Bharatiya Janata Party turned to fashion photographer Rohit Chawla to literally spruce up 72-year-old Vajpayee's image. The ace lensman was apparently hired 'for a bomb' for a one-hour photo shoot, to neutralise Sonia Gandhi's image of a young and glamorous lady.

According to media reports, the BJP's advertising bill touched Rs 150 million this year. In Andhra Pradesh, the Congress enlisted the support of ace film-maker Dasari Narayana Rao who made a poll-eve full-length feature castigating the ruling Telugu Desam and its leader Nara Chandrababu Naidu. In West Bengal, the hype-hating Communists allegedly spent millions of rupees on electronic advertising via a popular local cable television network. Parties by and large spent undisclosed sums on thousands of audio and video cassettes, music and skit recordings, radio and television commercials, street theatre, drama troupes, Internet sites and what have you, in their bid to reach out to all types of voters.

According to a BJP insider, a group has been set up to decide on the advertising content. The BJP hired Trikaya Grey agency to execute the campaign plan.

For its part, the Congress put its faith in Bombay-based advertising agency Madison DMBB. The latter saw off competition from F S Advertising, Chaitra Leo Burnett and Crayons.

A creative director who worked on one of these campaigns says, "Politicians have realised the power of the media. They realise that they can use the conventional rallies and booze parties to woo the villager, but the urban educated voter can be reached only through the media -- television and newspapers."

Although the ad agencies involved are mum about the ad budgets of their clients, the total ad spend is estimated to be anywhere between Rs 500 million ando Rs 1 billion.

However, the current election has been somewhat of a damp squib for some. Thanks to the Election Commission notification against defacing of the walls with campaign slogans, a large number of painters have had a tough season. Parmit Singh who made a neat packet during earlier elections says, "This year has been lean in Delhi. We have not had many posters and wall paintings. Maybe even the politicians are getting bored with politics. This year, the real business has been in transport -- all these autorickshaw owners and truck drivers have made good money."

Corporate India's response to the Great Indian Election Ballyhoo too has been lukewarm. While March 1998 saw a number of advertisers like JK Tyres, Laxmi Cement use the poll plank to sell their products, this year witnessed none of that. Suhel Seth, CEO, Equus Advertising, says, "The creatives based on elections was a smart move. The issue was current and hot in the mind of the consumer. It made sense to appeal to them with words that made a connection. But this year, there has been virtually no such advertising."

The reason could be that most corporate houses have emptied their kitty on Kargil donations and charity shows. Besides, the industry is inching towards a revival and most of the corporate houses are not in a position to support such short-lived advertising blitz.

What does yet another election really mean for the Indian economy? The government expenditure on organising the elections has been increasing over the years. In March 1998, the country spent Rs 6.60 billion on the democratic process. K R Prasad, secretary (planning) for the Election Commission says, "This year, the projected expenditure is about Rs 9 billion."

Others put the figure at a cool Rs 10 billion, the highest ever budget, and call it 'a very corporatised campaign'.

Tarun Das, director-general, the Confederation of Indian Industry, says, "The impact is rather scary. It is a very expensive affair and India simply cannot afford to have elections so frequently. Our fiscal position will be affected severely because all this money is going out of our revenue expenditure. This will lead to a fiscal deficit problem and the government will try to tackle that by additional taxation. And additional taxation is really worrying the industry because, thanks to recession, it is no position to shoulder any additional burden. Besides, we are sending signals of political instability to the investors abroad. This will lead to a serious fall in the foreign investment. That is dangerous."

But what really worries Prasanna Srinivasan of Business Environment Assessment Group is the impact such frequent elections will have on policy decisions. He says, "So many of our policies are still pending. At least 20 odd Bills were waiting to be passed at the time of dissolution of the Lok Sabha. Of these, some are very important ones, like the insurance bill. Such delays can have a retrogressive impact on the economy. Our GDP growth this year was estimated at about 10 per cent, but thanks to bad politics we can now hope for just about 6 per cent."

"And now, with Kanshi Ram warning the nation that another election may be due in November 2000, Seshan may perhaps wonder whether democracy has become so cheap that India can afford it every year," says an advertising professional.

ALSO SEE

Dilip D'Souza on how India specialises in effortless creation of messes
The Future Belongs to the Entertainment Economy
Specials
Business news