Home In English India News Parties spent Rs 31,950 crore in the polls, with a little help from corporates
Parties spent Rs 31,950 crore in the polls, with a little help from corporates PDF Print E-mail
Monday, 26 May 2014 06:05

Count Your Zeroes Before They Addle

Take a breath. Parties spent Rs 31,950 crore in the polls, with a little help from corporates.


Even hardened marketers were left scratching their care-worn heads. It was pretty near impossible for companies to find space to promote their products in Delhi and Mumbai—India’s richest markets.

For the past two months, all prime advertising space—in newspapers, on billboards and social media, you name it—were cornered by political parties, who unleashed the biggest ever publicity blitz in the history of Indian politics. And that formed just a fraction of the total cost of India’s costliest ever elections.

We have a number. After speaking to all stakeholders—parties, the EC, candidates, businessmen, and election watchers—we totted up the costs. Outlook’s conservative estimate is Rs 31,950 crore—a little over $5.2 billion—ten times the Rs 3,426 crore the government spent in conducting the polls.

The figure compares with the official US 2012 election spending of $7 billion, around Rs 42,000 crore. And it’s over half of the ambitious  NREGA programme—so you can get the scale! Blatant money power is an indicator of how big business is funding parties. Inasmuch as there is an unprecedented number of businessmen candidates, such businesses are direct participants too.

After speaking to outdoor managers and publicists across the country, it seems BJP will end up incurring two-thirds of the total election expenses.

All experts agree that it has changed the nature of the game by its monumental splurge. For instance, the Modi campaign maintained digital media armies in Ahmedabad and Hyderabad for a year to plan the entire show.

“BJP’s media campaign is marked by a number of innovations, being conceived and executed for the first time ever,” says Sam Balsara, chairman, Madison Advertising, which is responsible for most of BJP’s publicity campaigns. Indeed, Balsara admits that half the growth of the advertising industry this year will be on account of political advertising.

Graphic by Rahul Awasthi

Here’s the irony, then. Sensing a strong anti-incumbency ‘wave’, parties dug deep in their pockets and spent big money to ensure a victory. They paid for every trick in the book to lure voters—from huge publicity campaigns to attempting to buy their commitment via the age-old practice of gifts, liquor and food. Politicians also say that cash-for-votes is rife, particularly in Andhra Pradesh, Punjab, Uttar Pradesh and Maharashtra.

Andhra Pradesh, in particular, is being cited as being in the forefront of candidates’ ‘targeted pds’ to lure voters. Loksatta party president Jayaprakash Narayan puts the total Lok Sabha election spend in the state at Rs 3,000 crore. “AP is the pioneer in the use of money power in elections and the whole rot started in the 1990s and then spread across the country from here,” he says.

According to estimates, individual candidates there in the 2009 assembly polls spent about Rs 1 crore each. In the Lok Sabha elections, the amount is much more. An entrepreneur in Visakhapatnam and Hyderabad claims that the YSR Congress candidate in Visakhapatnam, Y.S. Vijayalakshmi, pumped in Rs 100 crore because “it is a prestige issue”. Konda Vishveshwar Reddy is another candidate (TRS) from Chevella Lok Sabha seat in the 100-crore bracket. Vishveshwar is the son-in-law of Apollo’s C. Prathap Reddy.

“Practically all votes in rural areas are bought and every candidate and party has to pay an ‘entrance fee’ to voters. The money paid is in the range of Rs 2,000-3,500. And most of this money comes from the candidates,” says Narayan.

A top party candidate contesting an assembly seat told Outlook, “The days when one could distribute a Rs 100 note per vote are gone. We now have to spend at least Rs 700-1,000 a day on campaign workers. This cost might include or exclude a liquor bottle (quarter) and a grand meal. Apart from that, voters are paid Rs 1,000 per vote and on the last two days, many stand to make as much Rs 7,000 each day.”

Despite the scale, all this is done discreetly to avoid the EC’s eyes. Recently, a Toyota Innova (with a Congress leader’s sticker) being used for election campaign in Nalgonda was found to have Rs 2.5 crore stashed in its bonnet after it caught fire.  And ambulances were caught ferrying large amounts of cash in AP while in Maharashtra, lunch boxes with loose cash were intercepted by authorities. Money was also being transferred by buying railway tickets in bulk in one place, while people in Punjab were cancelling them and taking the refunded money.

“With more millionaires in the fray this year, more voters are expecting cash,” says N. Bhaskara Rao, chairman, Centre for Media Studies, which maps election spending. Over 65 per cent voters in UP were estimated as expecting to be paid, as against 20 per cent in 2009. The corresponding figure is 52 per cent for Madhya Pradesh, says Rao.
“Four areas where expenses have seen a quantam jump now are advertising, event management, transport, unaccounted money.”Dilip Cherian, Veteran Image Guru 
So, where does the cash to satisfy this huge appetite come from? Most of it comes from the corporate sector, a big participant in the 2014 polls. Although corporate donations have to be reported and big firms have electoral trusts, a large part of corporate funding is unaccounted for. Also, the EC mandates only donations above Rs 20,000 to be declared by the political party. So if a company paid in multiples of, say, Rs 19,000, it will pass below the radar. Says Dilip Cherian, image guru and a veteran at political publicity management, “There are four areas where expenses have seen a quantum jump—advertising, event management, transportation and the unaccounted money.”

Cherian says advertising and external publicity budgets of parties have skyrocketed with large-scale use of public hoardings and full and half front-page advertisements in national newspapers. Consider this: a large billboard in New Delhi’s Vasant Kunj area comes for Rs 8-10 lakh, while one at Mumbai’s Haji Ali or Western Express Highway costs Rs 15-25 lakh. A full front-page advertisement in a national newspaper can go up to Rs 1 crore. Most of these spaces have been booked in bulk by parties.

The money actually spent on these could be much higher. Advertising and publicity expert Sandeep Goyal says, “Outdoor spending is not measurable, as there is no fixed rate and it is a cash market. For every Rs 1,000 crore spent in measurable media, ie TV, radio and digital, five times more has gone into media that’s not measurable.” Then there is the cost of rallies, which can be around Rs 1 crore, and transportation, hospitality, buffet meals and volunteer costs.

This time, parties have also invested in merchandise, including keychains, caps, sunglasses and cushion covers, apart from the customary T-shirts and flags. These will be borne by affiliate companies. Similarly, transportation and aviation costs are also expected to go up by 50 per cent this year, to about Rs 3,000 crore. This is especially on account of aviation, as about 540 aircraft and helicopters were used by politicians. An aviation entrepreneur who leased out choppers in the last elections said as against 3-4 hours of daily bookings of aircraft in 2009, this year, average bookings this time were of 9-10 hours daily.

Experts say that on an average, our candidates spend between Rs 5 and 15 crore depending on the kind of constituency, against the EC limit of Rs 70 lakh per candidate. Candidates report much less to stay within the EC limit. Anil Verma of the Association of Democratic Reforms, which analyses political finances, says, “Most candidates declare just 65 per cent of the permissible limit as expenditure. This is unbelievable, as in the last polls 10 per cent declared zero expenditure on transportation and 8 per cent on volunteers.”

The catch is that while there is a limit on candidates’ spending, there is none on parties. To buck the authorities, parties come up with several innovative ways to make up for any lost ground. Former CEC S.Y. Quraishi refers to frequent community feasts, biriyani parties and fake wedding receptions to woo voters (see modus operandi). The amazing part is this entire show, given its scale, has brought cheer to India’s sagging economy. Hopefully, the multiplier effect will be visible after the elections too. At the end of the day, if voters indeed ‘follow the money’, it will change elections forever in India.

source: http://www.outlookindia.com/article.aspx?290725