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Tuesday, January 23, 2001

The problem of corruption enters every citizen’s daily life. Almost every interaction with the government — be it for a birth certificate or ration card, electricity connection or water supply, for filing a police complaint or approval of a building plan – requires a bribe. All the eloquent sermons on the scourge of corruption by every party seeking power have provided no real relief to citizens. If anything, both the scale and spread have escalated.

Why has rent-seeking behaviour become so rampant? The answer lies in the high election expenditure. The Centre for Media Studies estimates that the total expenditure incurred by political parties and candidates and their supporters in the 1999 Lok Sabha election was Rs. 2500 crores. Lok Satta's own estimates for the 1999 Andhra Pradesh general election to State Legislative Assembly and Lok Sabha indicate an expense of Rs.600 crores. These estimates are by no means farfetched  — in at least a dozen assembly constituencies the major party candidates spent an average of Rs 2.5 crores, and in a few Lok Sabha constituencies the expenditure was as high as Rs 5 crores.

Election expenditure in Andhra Pradesh is probably higher than in most States. But the picture is equally grim for most parts of India. The important aspect is, the bulk of the expenditure incurred is for illegitimate purposes —to buy votes, bribe officials and hire hoodlums. In a typical Assembly constituency, around 50,000 voters are paid   about Rs. 50 to Rs.500 and given liquor sachets or redeemable coupons. Incurring all this expense does not guarantee victory, but not spending it almost certainly guarantees defeat! The reasons for this should be examined separately.

For now let us focus on the consequences of illegal collection of funds and illegitimate expenditure in elections. A Rs.600 crore expenditure by the candidates requires a return of Rs.6000 crores to cover a reasonable interest  and a 'fair' return on their investment. Candidates need to be compensated for the time and energy invested in cultivating party bosses, and organizing dharnas and demonstrations. Often large sums of money change hands to secure the party nomination. Election is also a high risk 'winner-take-all' business, and hence the risk premium is high. Apart from the minimal requirement for a ‘comfortable’ life, the elected member also has to raise money for future elections. The cronies and hangers-on who are the indispensable part of a politician's entourage have to be sustained. To desire a ten-fold return on all this investment is not an unreasonable estimate!

But a democracy, however flawed, does not permit extortion of money at gun-point. (Although this is happening in pockets of India). Herein starts the intricate maze. The politicians’ desired return of Rs 6000 crores has to be collected by an elaborate mechanism through the agency of the vast army of employees. This translates itself as 'rent' or bribe for most public services. There are about 3000 government employees for every politician in office. If each of them retains only a small collection fee, the total amount extorted from citizens would be nearly 20 fold – or about Rs 120000 crores. In this way an election expenditure of Rs 600 crores leads to corruption totaling Rs.120000 crores over five years. (With legislatures dissolving sooner, the returns should move faster!)  And all this in just one major State.

But the  real price paid is not merely money collected as bribe. It is the state of anxiety and uncertainty in which a citizen is kept to sustain this chain of corruption. It is infliction of harassment and humiliation, and lost time and opportunity. Citizens aren’t always eager or willing to pay a bribe for basic public services. (Only a small part of corruption is collusive — where the bribe giver also benefits at the cost of the public exchequer. Most corruption is extortionary.) But experience teaches us that if we do not pay, we end up losing at least ten times the bribe amount. It is this anxiety and uncertainty which ensures the flow of money from the people to the top rungs of power. Otherwise the system breaks down!

This, in a nutshell is the consequence of a corrupt electoral system. The legal limit for expenditure in Assembly election is Rs.6,00,000 in most States, and Rs.15,00,000 for Lok Sabha election. But the actual expenditure is often 10 to 20 times the ceiling, and as Prime Minister Vajpayee stated several times in Parliament almost every legislator begins his political career with a big lie – he signs a statement declaring that he did not exceed the legal limit. The expense incurred is not only illegal, but also illegitimate.

If we want to curb corruption and stop misgovernance, the key is comprehensive electoral reform.