Off Wallets & Ballots

The hawala ruckus has brought the issue of electoral funding in India into sharp scrutiny. Archana Masih finds out if the process of replenishing party war chests has really changed in Manmohan Singh's India.

Miniature party flags fluttering atop sturdy campaign vehicles traversing through the world's largest democratic landscape. Beaming candidates, hands folded, peering from poster-splattered walls. Mammoth cut-outs at city squares. Bamboo barricades fastened with crude ropes. Blaring loudspeakers. Rustic hordes listening to kurta-clad politicians holding forth from makeshift podiums... The Indian campaign trail is on the move, and in turn unfolds yet another pulsating period in the mighty bastion of national politics.

In a politically and culturally diverse country like India, fighting an election and luring a capricious electorate is known to be both complex and costly. Large, often unimaginable, amounts of money are spent by political parties at election time. The hawala scandal which saw several leaders accused of graft has today highlighted the issue of poll funding.

With the general election scheduled in a couple of months from now, dynamic party members have already been assigned the job of replenishing war chests. This is the first time elections to the Lok Sabha are being conducted in economically liberalised India, so will poll funding be any different? Will the absence of permits and regulation abolish the insidious manner in which parties collect money?

"I believe this election will prove the turning point in the electoral system," says Bharatiya Janata Party leader Madhu Deolekar, a fierce critic of the party's current methods of collecting funds. "All parties will collect money from all sorts of people. We are hurtling towards a climax, a crash, after which the entire system will be rationalised."

Electoral funding did not originate with Surendra Kumar Jain, the central figure in the sordid hawala business. Even in the fifties when the Opposition was miniscule, when Jawaharlal Nehru dominated the political scene like some mythological titan, the Congress party had the likes of S K Patil and Atulya Ghosh, gentlemen celebrated for their fund-raising skills. Still, collecting funds was a rather tame affair and did not dominate party politics the way it does now.

Deolekar feels that it was with the advent of Nehru's daughter Indira Gandhi as prime minister that the concept of collecting funds acquired a new dimension, gradually dominating all political activity. The party treasurer became a notional functionary while the task of collecting funds was assigned to ministers, some chief ministers and other influential party apparatchiks. Lalit Narain Mishra, then the federal railway minister, and Bombay's Congress boss Rajni Patel were considered the party's star fund-raisers.

Given Bombay's position as the nation's commercial nerve centre, the city's Congress bosses have inevitably played stellar roles in collecting money for the party that has ruled India for all but fifty months of its existence as an independent nation. First, S K Patil in the sixties; then Rajni Patel through much of the seventies, and now Murli Deora, president of the Bombay Regional Congress Committee for a record 15 years. Deora, who represents India's wealthiest district, South Bombay, in Parliament, has, it is said, raised the process of collecting funds to another level altogether. There are few businessmen in the city that Deora does not know or is not friends with.

In the wake of the liberalisation process, which appears to have loosened political control over the country's economy, and the hawala controversy many businessmen are now clamouring for greater transparency in political funding.

Businessmen do not, however, believe liberalisation has erased the you-scratch-my-back-I-do-likewise syndrome. Says Vijay G Kalantri, president, All India Association of Indian Industries, "Nothing has changed. Liberalisation is not going to change anything. The only difference is that we can talk about it. The industry-politician nexus will continue. If an industrialist is asked for a contribution he cannot refuse because he knows this could lead to serious repercussions. "

Despite their public abhorrence of coughing up cash for politicians, industry sources claim businessmen themselves call up various political organisations, displaying enormous interest in contributing to party coffers. Many companies -- especially those which are family-run --are known to keep aside millions of rupees for political contributions. Many of these corporates hedge their bets by bankrolling more than one party at the same time.

One businessmen told Rediff On The NeT, on condition of anonymity that "nobody can get away without fulfilling the demands of those in power as well as those who display the potential of climbing on to the power pedestal."

Confirms Kamal Morarka who has seen the situation from both sides - as chairman of the family-run construction company Gannon Dunkerley and as a minister in then prime minister Chandra Shekhar's office - " Businessmen are a pro-power breed; they will support the Congress at the Centre and the Shiv Sena in the state."

Morarka says when a party like the BJP wins power in rich states like Gujarat and Maharashtra, it creates a positive impression for itself. This image then translates into a sound source of funds.

While promising or granting favours in return for financial contributions is one avenue of collecting funds, there are less controversial methods of enhancing party coffers. According to Deolekar, some parties collect funds from supporters in low income groups via coupons. Parties with trade union wings receive contributions through these front organisations. Non-resident Indians also provide funds to their favourite leaders and parties.

FOR one of the poorest nations in the world, India's political parties spend startling amounts of money on election campaigns. According to a report in the Financial Express, over 20 billion rupees were spent in the past five years on two Lok Sabha and over a dozen assembly elections.

"The Congress campaign itself is worth hundreds of millions of rupees. The BJP must be spending nothing less than Rs 500 million to Rs 1,000 million; the Shiv Sena between Rs 100 million to Rs 200 million," reveals Deolekar.

"Whichever leader has sufficient clout with businessmen collects money from them. God alone knows how much they pocket themselves," says Deolekar who has not endeared himself to the BJP's national leadership by his acerbic criticism of general secretary Pramod Mahajan, the party's primary fund-raiser.

Deolekar, a politician of the old BJP school, believes that politicians like Mahajan have ushered Congress culture into the BJP, abandoning the party's values while collecting money.

Fighting an election in India is a daunting, prohibitively expensive exercise. Deolekar estimates that any candidate serious about wanting to fight a parliamentary election would have to spend at least five million rupees; the expenses would multiply several times over in a large constituency or in a metropolis like Bombay.

People in the know say garnering funds for a candidate at the local level is not difficult. Even the not-very-influential candidate can raise between half a million rupees to a million rupees. Quips Morarka, "If a candidate cannot collect this amount, then why should he contest a parliamentary election? He should contest municipal elections! Moreover, this money is not coming from big businessmen, but from middle class traders who constitute a source of funds for any party."

But it is not the trader or the corporatewallah alone who provide cash for political campaigns, electoral and otherwise. Contrary to the belief that multinational corporations do not contribute to political parties since it violates the law in their countries of origin, some observers claim that MNCs readily open their wallets when political demands are made.

Industry sources claim that when political parties require multinationals to make contributions, they exert pressure by way of India's byzantine governmental procedures; pay up to make progress. " MNCs have also stretched to this system," says J B D' Souza, a former state chief secretary in Maharashtra.

As chief election commissioner, T N Seshan made substantial effort to rein in money power at election time. The assembly elections in the autumn of 1993 and thereafter were conducted in an ambience of fear and loathing towards excessive electoral expenditure. The spending of candidates was monitored; party accounts were audited, electoral activities were videotaped...

Seshan's zeal appears to have declined after he was joined by two other election commissioners. Both Dr M S Gill and G V Krishnamurthy have, in recent weeks, indicated their support for Seshan's campaign.

On Wednesday, February 7, the commissioners discussed the issue of spending during the biennial elections to the Rajya Sabha, scheduled for February 19. Traditionally, these elections are a tableau of money power; enormous sums change hands as parties woo rival politicians and independents to spring poll surprises.

Although the Indian electorate has become much more aware, many are of the opinion that, liberalisation or not, this system of funding will remain unchanged.

In Uttar Pradesh, the country's most populous state with the maximum representation in Parliament, both politicians and businessmen are convinced that nothing will ever change. Take the state's powerful sugar lobby which is known to have substantial influence over any government because of its periodical doles to political parties. A sugar-mill owner from UP's rich Terai belt describes this as "the sole reason for the continued licensing policy in this industry."

It is an open secret in UP that every license has a price, which is more often than not , labelled as 'election fund.' And far from witnessing any refinement, the process has only turned cruder. " While Congressmen were more suave in their dealings and would only drop hints about the kind of money they required, politicians who have shot into prominence recently are more blatant with their demands," remarks an industrialist in UP.

Although India could be well on the path of liberalisation, the system of poll funding is too deeply rooted to be shaken by the winds of fiscal change. As Morarka, the businessman and politician, says aptly, "Electoral funding cannot be rigidly policed. You cannot have a holier-than-thou attitude. If all the other parties are spending money, you too are compelled to do the same to stay in the running. We are all a partof the process."

Additional reportage from Sharat Pradhan in Lucknow