Bad Money, Bad Politics

Published: June 10, 2016 - 12:58 Updated: June 10, 2016 - 13:01

During the recent Assembly elections in Tamil Nadu, the State Election Commission officials stopped three trucks carrying a stash of Rs 570 crore in currency notes in Tiruppur. No one had any doubts about what the “mother of all cash seizures” was meant for: to bribe voters. Before this open secret was further reinforced, the State Bank of India (SBI) announced that the seized bundles of money were actually funds being transferred under the instructions of the Reserve Bank of India from Coimbatore to Visakhapatnam. The excitement around the news may have subsided, but there were many who were deeply sceptical of the SBI’s last-minute defence. A pertinent question which arose was why weren’t the authorities informed earlier about the movement of the funds? Post the incident, there were a few who felt that on some occasions huge election funds are moved under the protection of and with the collusion of the banks, who are quick to own them as theirs when caught. While this seizure was rationalised away, the Election Commission also seized Rs100 crore meant to bribe voters. So blatant has been the use of money in the Tamil Nadu elections that, for the first time in independent India, the Election Commission rescinded polls in two Assembly Constituencies due to manifest malpractices.

These developments neither outrage our electorate nor our amoral political class. Political parties have realised through trial and error that the only way anti-incumbency can be defeated is by flowing rivers of money. This technique was perfected in Tamil Nadu in a by-election in Madurai by DMK leader MK Alagiri and later fine-tuned by the late Congress leader YSR Reddy. Both used a combination of muscle and money power to ensure that their challengers did not have a semblance of a chance to defeat their parties. In 2009, Reddy promised 33 parliamentary seats to the party high command if he was given a free hand. And, true to his commitment, he got the Congress a majority of these seats. This reporter travelled to Andhra Pradesh during the elections and saw how the voters had not been given not only money, but also gold ornaments.

In Tamil Nadu again, the All India Anna Dravida Munnetra Kazhagham (AIADMK) led by J Jayalalithaa surprised everyone when she returned to power. This was the first time in more than 30 years that an incumbent had won. The AIADMK had been pursuing what is euphemistically called “people-centric policies”. Simply put, it means providing goods and benefits to the voters that include mixies, TVs, grinders, fans, etc. Jayalalithaa has now promised free smartphones for every family in the state. This must have been tempting for the voters but, as anyone from this southern state will attest, both political parties, the DMK, and the AIADMK, give gifts and goodies liberally to the voters—all through the year.

However, what is disconcerting is that more and more states have adopted the Tamil Nadu model. In West Bengal, too, political observers will tell you how expensive the electioneering was during the recent Assembly polls. A top CPI(M) leader shared his party’s growing discomfort due to its inability to match the Trinamool Congress’s fiscal resources. He said that they would find it difficult to fight elections without funds. So, in some ways, the Congress-CPI(M) alliance was meant to tide over this problem. Needless to say, it still could not match the TMC resources and the party’s resolve to come to power. There is no real idea of how much money was spent in Kolkata and Assam but Reserve Bank of India Governor Raghuram Rajan, gave some hints. Rajan claimed, and coming from him it cannot be an idle assertion- that in these five state elections Rs 60,000 crore or around $10 billion would be spent. This is far in excess of the expenditure that the high-profile US primaries are costing: around $5 billion. The US media has been critical of the copious funds that are being spent on the primaries, but in our country, save for the passing editorial in some newspapers, there are no hard questions being asked. How are these funds being generated and brought into the system? Are these funds brought in through the hawala route or are there other ways to inject so much cash into the system? What about Prime Minister Narendra Modi’s assertion that the corruption related to election funds had lessened? Even the 2014 election campaign mounted by the BJP was visibly so expensive that it outshoned even the ruling UPA’s well-funded poll effort. The big question remains: how long can we allow illicit cash, sourced from dubious sources, to bend the will of the people?

Editor of Delhi's Hardnews magazine and author of Bad Money Bad Politics- the untold story of Hawala scandal.

Read more stories by Sanjay Kapoor

This story is from print issue of HardNews