A recent report, released by the Association for Democratic Reforms (ADR), has highlighted the issue of political funding by corporates, thus raising questions about the potential impact and consequences of corporate funding, in national politics and policy.
Transparency in political funding and sources of funding has been a contentious issue, with almost all political parties reluctant to disclose their sources. However, with new laws, it has now been made mandatory to disclose all source and amount of funding above Rs 20,000 to the Election Commission.
The downside of corporate funding of political parties
According to a Press Release of ADR dated on December 24, 2014, 90 per cent of official funding received by political parties has come from corporate houses. This is a dangerous trend. The private sector works on the profit motive; therefore, any capital invested must have a return on investment, either by way of cash profit or any other value. This, usually, is the genesis of crony capitalism.
The world over, corporates have been a leading source of funding for political parties but this has also led to a public backlash in many countries. In the US, companies in the defence, tobacco, pharmaceutical industry, etc, have major political funding programmes and they influence policy, in their favour.
South Korea experimented with promotion of a few family-run companies, in post-war Korea, to revive the economy. A handful of companies like Samsung, Hyundai, Daewoo, etc were funded and supported with favourable policies to lead the industrial revival. While they did deliver to a large extent in taking Korea to the industrial forefront, their role and influence in government formation and policy making, has been widely criticised and led to a public backlash. Therefore, when you have a situation in India, wherein 90 per cent of the funding is coming from the corporates, it’s a matter of serious concern.
Take a look at the funding received by the Indian National Congress (INC), the NCP and CPI. In a span of one year i.e. from FY 2012-13 to FY 2013-14, the funding received jumped by Rs 62.69 crore, an increase of 517 per cent!
For the same period, the total amount received, above Rs 20,000, by INC, NCP, CPI, and CPM, together totaled Rs 76.93 crore, received from 881 donations.
It is interesting to note that in FY 2012-13, BJP raised the highest funding at Rs 83.19 crore, compare that with INC which received Rs 11.72 crore. Despite its claims to transparency, BJP is the only party that is yet to submit its funding details for FY 2013-14, to the Election Commission.
While all this may seem small change compared to the amount of unaccounted money raised and deployed by all parties during elections, the fact remains that if the corporates are funding political parties, then a quid pro quo relationship could well be a natural expectation.
It is important for political parties to reduce their dependency on corporate funding and broaden the base for collecting funding from individuals and other sources. In addition, for a cleaner system, it is imperative to track donations that are below Rs 20,000, as well as keeping a check on the background of persons making the donation. In the absence of any form of monitoring, the system opens the window for criminal elements to funnel illegal money to political parties, in return for favours at a later date.
Where is the Aam Aadmi?
India boasts of being the largest democracy in the world but can the nation claim to be a true democracy? Democracy is supposed to be by the people, of the people and for the people but where is the people factor in our political life? Yes, the people do cast their votes to elect their leader but does that tell the true story of people’s representation?
Today, politics in India is about money power, muscle power and family ties, all of which play a significant part in choosing the candidates that stand for elections. A close look at the profile of candidates that stood for elections between 1947 and 2014, will show a progressive increase in the percentage of crorepati candidates. This is true for most political parties.
How is it that in a poor country like ours, where we are supposed to practise true democracy, majority of our parliamentarians are crorepatis, with some being extremely wealthy?
In the 2014 Lok Sabha, the richest parliamentarian happens to be Jayadev Gala of the TDP with a net worth of Rs 683 crore. He is followed by Konda Vishweshwar Reddy of Telangana Rashtra Samiti with a net worth of Rs 528 crore. The next in the list is Gokaraju Ganga Raju of the BJP from Andhra Pradesh with a net worth of Rs 282 crore. The list is a long one.
So where and how is the common man involved in our democracy and decision-making?
Politics is now becoming a family business
The last 10 years has seen several of our political veterans retire and interestingly pass on the baton to their progeny, with full support and concurrence from their respective parties. ‘Hereditary’ politics had become institutionalized a long time ago with the Gandhis leading the way but now this phenomenon has become the norm across most parties.
The nation glibly pats itself on the back, after holding each round of General and state Assembly elections, with a reassurance of how democracy is thriving in India. But is it really so? The truth is that the common party worker is left with crumbs of perks and benefits of his party in power, with the real power and the ability to generate wealth being controlled by the leaders and their ‘family’ connections. This is true for both national and state level politics.
Too much attention is focused on the political leader’s wealth at the time of entering office and at the time of leaving one, but a closer study of wealth created and assets owned by close relatives of the political leaders is likely to reveal a larger unsavory truth.
What is equally sad is that grassroots level party workers are being paid in cash or favours, in return for supporting a ‘family’ candidate to get a party ‘ticket’ and then ensure the person’s subsequent election. The old saying ‘money begets money’ is truly demonstrated in the growing wealth of politicians and their families; it is now in the process of further consolidation with ‘hereditary’ politics taking roots.
It’s time for the nation to bring about electoral reforms on a priority to pave the way for a truly representative democracy.