Costs of democracy

In the run up to every general election there is an animated debate about the cost of elections, of both the campaign and the polling, and all manner of ideas are thrown up. It has been reported that this year’s general elections are going to cost the government a whopping Rs 1,000 crore in terms of just conducting the polling. There is the separate cost of campaigning that parties have to incur and this could be in the neighbourhood of Rs 2,000 crore, assuming all contestants spend at least Rs 4 crore per constituency. No democracy has so far been able to come up with an ideal solution that is both transparent and non-discriminatory. The available choice is only between options with varying degrees of transparency.

The idea that all contributions should be by cheque is, however, an eminently sensible idea but it will not be honoured as long as those in power can distribute patronage at will. The day a minister cannot distribute patronage, payments will be made only by cheque and transparently. However, there is some utility in constantly making the demand on both political parties and corporate entities that they pay only by cheque. This will at least help in discouraging the “under the table” cash transactions and the “suitcase by suitcase” dispensation of favours. The second idea that is often bandied about is that of state funding of polls. Here again, the practicality of the proposal rests on some finite ceiling being imposed not just on the amount of money given per candidate but also on the number of candidates per constituency that are eligible to secure public funding. In countries where there are no more than a handful of candidates per constituency the principle of linking entitlement to vote share is easier to manage than in countries, like ours, where there may be as many as 50 candidates per constituency. If 5 per cent of vote share is taken as a cut off point, then only the major parties will secure state funding. Is that fair? In any case, even when there is state funding of polls, there will continue to be private funding available as long as politicians in office can dispense favours!

Hence, the first step in the direction of election funding reform is to make government intervention less discretionary and more transparent. Indeed, the effects of economic liberalisation on political funding are already becoming visible to us. Consider the difficulty that many political parties are having with raising funds from the corporate sector. In part it shows that private business is no longer as beholden to politicians as it used to be. On the other hand, it also shows that there is now more focused generosity and this may not always favour the best candidates. Indeed, the fact that some smaller parties are more flush with funds than some bigger national parties should be a matter for concern.