The other day, the BJP Lok Sabha member, Gopinath Munde, caused a flutter by making a confession that he had spent Rs 8 crore on his 2009 election to the Lok Sabha even though, at the relevant point of time, the permissible limit was only Rs 25 lakh and even though he had filed a declaration to the Election Commission (EC) that he had spent only Rs 19.37 lakh.
For filing a false declaration and exceeding the official limit, the EC has already served a notice on him which, if followed through, could result in his being disqualified from contesting elections for a period of at least three years. Though it is common knowledge that Munde is not alone in this brazen violation, the much-vaunted long arm of the law has never reached out to all the violators.
Munde, who has since clarified that this was not the money he spent directly but the total money spent by many people on his re-election, could still rue his bravado if he is disqualified. However, his mea culpa cannot be retracted unless he can convincingly explain it away as having been made in jest. Even if the confession was not born of bravado and he had only guilt-tripped, that won’t be an extenuating or exculpating factor unlike in the case of his leader Atal Bihari Vajpayee, who once famously said that all winning candidates to the Lok Sabha commit a crime while entering its hallowed portals by making a false declaration as to the true expenditure on their poll campaign.
What Munde did was self-flagellation whereas Vajpayee cleverly lambasted everyone, thus escaping a specific enquiry against him. Predictably, the income tax department has joined the fray, and sought explanations from Munde as to the sources of funding for financing this poll extravaganza. He may have to turn around and say smugly that the cash came from the central BJP’s coffers and was not his own. By doing this he would be saving his own skin without exposing the party, which can easily explain away the funds as those emanating from small contributions below Rs 20,000, for which it doesn’t have to account for.
Incidentally, this defence had paid off in the past when politicians, among others, would say without batting an eyelid that the alleged ill-gotten wealth was in fact the result of many gifts given by doting party supporters. For good measure, a rally would be held where this money laundering act would be enacted in full public view, with a fawning village head presenting a purse to the politician.
The charade was not lost on anyone; it was actually the politician’s own black money accumulated over the years which was presented as a gift to make it legit. This drama is, of course, no longer possible in view of the fact that cash gifts in excess of Rs 50,000 per annum are treated as income in the hands of the recipient. But political parties are out of the clutches of this salutary rule.
The broader question the Munde confession has raised is how to address the festering problem of poll splurges by big parties and resourceful candidates. The logic underpinning the ceiling on expenses, which now stands at Rs 40 lakh per candidate for Lok Sabha, is two-fold: a level playing field and eschewing the role of big money in corrupting the electorate. It is true that money power and its concomitant muscle power considerably reduce the chances of candidates who don’t have these resources. But has the EC been successful in enforcing its writ? The answer is a resounding no.
Despite video recording and other reconnaissance efforts, the EC’s record in preventing the role of big money is abysmal. It is not as if the EC is inefficient but it has sown the seeds of its own impotency. The law excludes party expenditure from the limits set for the candidate. It also excludes the travelling expenses of as many as 40 leaders of the same party and 20 leaders of other parties while toting up the expenditure to see if the limit has been breached. Quite often candidates take shelter behind the facile plea that the expenditure in question was not specifically for them but for the party in general. Such expenditure does not attract the EC’s ire.
Controlling expenses thus has proved to be futile. What should, therefore, be done is to control and regulate fund collection. Everyone in this country smugly says the election splurge is bankrolled by black money collected from corporates and industrial houses. Corporates generate black money through over-invoicing of imports and under-reporting of sales, including scrap and waste. The above catalogue is by no means exhaustive.
The point is the political class turns a blind eye to corporate shenanigans in the dawning realisation that their own fortune depends on condoning them, though at times industrial houses not well-disposed towards the ruling dispensation are exposed to income-tax and other raids in a spirit of vendetta or reprisal. That is why many industrial houses have perfected the art of buttering both sides of the bread – giving donations in cash to every party that matters, just in case. The most perplexing fact is while companies are raided from time to time for suspected financial misdemeanors, no political party has ever been raided despite knowing that almost all of them are sitting on piles of cash. Perhaps, the unwritten code among political parties is to decentralise cash operations at the state or district levels so that any putative raid on the head office comes a cropper.
The candidates obviously do not record expenses incurred with the party’s funds as well as their own black money. The worst kept secret in Tamil Nadu is that both in the 2009 Lok Sabha polls and in the state assembly elections that followed, envelopes containing cash at the rate of Rs 2,000 per voter were dispensed but such acts of brazenness went unchallenged.
The Central Board of Direct Taxes (CBDT) went on record a few years ago saying that there is a mushrooming growth of political parties in this country because they are the safest tax sanctuaries – free from income tax and donations to them are completely tax deductible, except in the case of corporate donations where there is a ceiling of 5 percent of average profits for the last three years. This eases the way for money laundering, thus beckoning thugs and crooks alike to form parties to nurse their resources if not to fight elections.
Munde might have wittingly or unwittingly done a signal service to the nation if policy wonks force a debate on the pernicious role of black money and how to curb its role in elections. State funding of elections, taking a cue from Germany, has been suggested in many knowledgeable quarters as a panacea without realising the fact that parties in India would, in that event, take funds from government as well as industrial houses. State funding in other words would be in addition to, and not in substitution of, black money funding.
While black money makes the electorate vulnerable to financial overtures, a dispassionate examination of its role points to the unintended trickle-down effect. Yes, the money splurged on election eve substantially and inevitably percolates down to the common folks in the form of bribes, wages and other payments. This perhaps is the only redeeming feature of poll splurge.
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