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Article in The Financial Express
Authored by Dr.Jayaprakash Narayan

National Coordinator of
VOTEINDIA movement

Wrong diagnosis, inadequate treatment
December 23, 2005

Every physician and patient knows that the efficacy of cure depends on the quality of diagnosis and the precise medication or treatment offered. Sometimes, out of confusion, a doctor orders many remedies simultaneously, in the hope that something works! And on other occasions, vitamins or placebos are given to reassure the patient. Two successive sting operations exposing sleaze of over a dozen MPs, and unconfirmed reports of 50 more MPs being implicated certainly served to stir the nation. All Indians know how corrupt our governance system is. It is common knowledge that a large number of politicians and bureaucrats have converted public office into private gain. Politics has become big business. But the suspicion, and even knowledge, that the emperor is naked can be safely kept under wraps, and we can pretend that everything is normal. But once the innocent (in this case, the not-so-innocent media) child rudely exposes the emperor's nakedness, we can no longer harbour illusions. The recent exposes have posed the most formidable challenge to the legitimacy of our political process in three decades.

But the Government's frenetic efforts to provide state funding for elections is a classic prescription of a placebos for a deep-rooted political malaise. Public funding in itself, like placebos or vitamins, is harmless, or even desirable. But that does not address the underlying causes of the crisis. In a democratic society all power is a means to promoting public good. Therefore political activity has to be supported by the public in some form or the other. Otherwise, power becomes the private preserve of the privileged and the wealthy, creating an undesirable plutocracy. Many democracies have sensible public funding models. In the US, the world's most libertarian society zealously guarding individual rights and limiting state's role, government funding is available for the presidential elections - both at the primaries and the general election - subject to certain conditions. In most European countries, parties are funded by state for normal political activity and election campaigns, usually at a standard rate per vote obtained by the party. Therefore, as a principle, public funding cannot be faulted. But this knee-jerk response of public funding ignores two vital issues.

First, already there is significant indirect public funding available to parties in India. The Election and other Related Laws Amendment Act, 2003 was a remarkable piece of legislation accomplished by the good sense of the then NDA government and the opposition Congress. In the wake of the Tehelka episode, Congress party constituted a committee headed by Dr Manmohan Singh, and its report was accepted by the then government. As a result, significant changes were made in law: explanation one under Section 77 of the R P Act, 1951 was effectively repealed, removing exemptions which made a mockery of election expenditure ceiling; full tax exemption was made available to all individual and corporate donors for political contributions; disclosure of all contributions of Rs 20,000 or more was made compulsory; and a provision was made to give free air time to all recognized parties in all channels, including local cable networks. The last of these provisions has not come into effect as the rules have not been made for over two years! Once fully implemented, tax-free contributions and free airtime creatively used in public and private channels will substantially meet the legitimate election campaign requirements. As democracies become mature, the most valuable resource for parties is television time. About 70% of all election expenditure in the US is on TV ads. And once free airtime is available most campaign needs are met. In any case, public funding will have to be within the ceiling prescribed by law (Rs 10 lakhs for Assembly and Rs 25 lakhs for Lok Sabha in most states). Therefore, public funding, though desirable, is of marginal added value.

Second, the real cost of elections is not for legitimate campaigning purposes. Most estimates indicate that about Rs 3 to 5 crores is spent by candidates for Lok Sabha and upto Rs 1 crore for Assembly in many states. While about 30% of it is legitimate campaign cost, the rest is spent illegitimately to buy votes, bribe officials and hire muscle men. The recent elections to titular municipalities in Andhra Pradesh, excluding the two largest cities of Hyderabad and Vizag, cost about Rs 500 - 700 crores for candidates! Kanakapura by-election in Karnataka saw about Rs 20 crore expenditure about 2 ½ years ago, though there were no real political stakes in the outcome. Large expenditure does not necessarily guarantee victory. But modest and legitimate expenditure within the bounds of law almost certainly guarantees defeat in most cases! Any public funding can only help meet the legitimate campaign costs, and does not address the vast, growing illegitimate expenditure.

Why is so much money spent for illegitimate purposes? The answer lies in the nature of our first-past-the-post (FPTP), winner-take-all electoral system in a poor country. Generally, about 80% of the vote is cast on the basis of the party's image and appeal, or anger against rival parties. But the marginal vote that a candidate manages to secure is the key to victory. Therefore parties, in their quest for power, are desperate to nominate candidates who can muster the marginal vote. Given our conditions, the winning vote to trump the rival is mobilized by money and liquor, caste, muscle power, and strong family roots in politics. This makes parties dependent on local fiefdoms and money bags. Often, both the leading parties deploy similar candidates. In a system of compensatory errors, the misdeeds of each are neutralized by the other, and the aggregate outcome does seem to be broadly reflective of public mood. But given the distortions of candidate nomination, huge, unaccounted expenditure, and unholy means deployed, no matter which candidate or party is elected, the quality of governance is inevitably perverted.

Politics has thus become big business demanding multiple returns. Transfers, contracts, police cases and influence peddling (mining, regulation etc.) are the chief sources of ruling party legislators. MP or MLA LADS, cash for questions, constituency level public works, and nuisance value for industries are the sources of income for the opposition legislators. Left parties are generally exempt from this, as are the many honourable men and women of integrity in other parties, who are struggling against great odds to survive in public life with honesty. When the incentives in the political system are grossly distorted, no amount of public funding will address the crisis.

What, then, is the answer? We need to eliminate the importance of the marginal vote in elections. 101 democracies world-wide have party list systems with some form of proportional representation. Only 47 have FPTP system, and many like New Zealand, Sri Lanka, and even Britain (in regional and European parliament elections) have given it up. Once we switch over to multi-member constituencies based on party lists, candidate choice will improve and money power will be irrelevant, as success is not based on marginal vote. This only requires a simple law, as the Constitution permits it. In fact, in 1952 and 1957, we accommodated SC and ST reservations in multi-member constituencies in India.

Will parties listen? Congress, BJP and Left parties have a lot to gain by list system. Already, in most large states the national parties are getting marginalized, yielding space to local parties. This is because their modest vote share does not yield electoral success, and therefore many voters switch loyalties quickly. All parties have stakes in political reform. Rarely do we have a solution which is good both for the nation and the parties. If nothing else, enlightened self interest should propel our parties to reform the system and clean up politics. Symbolic and ritualistic responses will not do.



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