With only a half year to go for elections in five states, Congress ends up in an unenviable circumstance, not just due to organisational disarray, but also because of its huge financial crisis.
The party is set to gather Rs 11,000 as ‘sahyog rashi’ (collaboration expense) from every candidate for party tickets in the 2022 Uttar Pradesh get-together races, as indicated by a party notice given by state unit president Ajay Kumar Lallu on Tuesday.
This isn’t the very first time Congress is looking to fund-raise from ticket applicants. In the 2019 assembly elections in Haryana, the application fee for a ticket was set at Rs 5,000 for general category candidates and Rs 2,000 for Scheduled Caste candidates.
In May 2018, a year prior to the last Lok Sabha elections, the party had requested its allies to help “re-establish democracy” and aid the desperate party through crowdfunding.
The most important question is, what made a party that had governed India for quite a long time, so frantic that it is requesting crowdfunding?
The examination of 18 years of audited financial statements of political parties reveals that ever since the Narendra Modi-led BJP came to power at the Centre, the Congress’ finances have slipped into a quicksand.
Fortune favours only the winner
In 2004, when the Congress-led UPA came to power, the party disclosed an income of Rs 153 crore. The BJP, led by Atal Bihari Vajpayee, which had been in power along with its NDA allies for six years, reported an income of Rs 91.5 crore.
Till the financial year 2013-14, which ended just before the Lok Sabha polls that brought Modi to power, the Congress remained the party with the highest declared income — 31 percent higher than the BJP.
However, by 2019-20, the annual audited financial reports showed the BJP’s declared income to be Rs 3,623 crore, about 400 percent more than the Congress’ Rs 682.2 crore
The corporate area is the greatest benefactor to the political groups; in 2019-20, more than 90% of financing to the BJP and Congress came from large contributors.
A political analyst Sanjay Kumar who is also a professor at the Centre for the Study of Developing Societies (CSDS)“The gap between the Congress and the BJP has widened majorly because donors provide more funds to the party that wins the elections. Post-2014, the BJP has won state after state and retained power at the Centre. If the Congress manages to win in more states, it is likely to get more funds,” said political analyst Sanjay Kumar, professor at the Centre for the Study of Developing Societies (CSDS).
Kumar also added that the Congress’ already gruesome financial situation could get worse if it fails to win the seven state elections coming in 2022 — UP, Uttarakhand, Punjab, Goa, and Manipur in February-March, and Himachal Pradesh and Gujarat towards the end of the year
Industrialists rely upon governments for getting different agreements, clearances, and so forth Along these lines, subsidising a political party in power goes about as a shield for them. This is generally noticeable in the construction sector where the public authority has a ton of administrative power.
In their book Costs of Democracy: Political Finance in India, economists Milan Vaishnav, and Devesh Kapur have shown the large interdependence of political parties and big businesses, especially in the construction sector. “In sum, builders require favours from politicians and politicians, in exchange, expect financial contributions during election season,” states the book.
“The onus of getting funds for the party lies, to a great extent, on its CMs (and ministers). They are responsible for procuring money, and mobilising resources,” a Congress functionary reportedly said.
At present, there are only three states where the chief minister belongs to the Congress — Punjab, Rajasthan, and Chhattisgarh — and in all three, it has been witnessing turmoil in the last year. The party also shares power with regional parties in Maharashtra, Tamil Nadu, and Jharkhand, but its ministers don’t have the heft in terms of decision-making, which is usually leveraged to ensure smooth flow of funds if party sources are to be believed.
The BJP, meanwhile, has its own CMs in 12 states and a share of power in six more.
“This is why it’s so important for Congress to win state elections, to not let state governments fall as it has in the last few years,” the party functionary added.
Cash crunch impact
Financing impacts a party’s capacity to challenge elections. Truth be told, the Congress’ circumstances have advanced beyond dire. The current year’s assembly poll surveys in four states and union territory show that the party conveyed an SOS to its ministers in states, requesting funds for campaigning.
Party MLAs and MPs have to dedicate a month of their salary to its coffers. An MP’s salary is Rs 1 lakh, which has been slashed by 30 percent since the pandemic hit India, while an MLA’s salary varies from state to state, ranging between Rs 50,000 to 2 lakh or, in the case of Telangana, Rs 2.5 lakh, including allowances.
Being the most well-funded party, the BJP naturally has the most to spend. Its expenditure in FY 2013-14 was Rs 329 crore, which jumped by more than 400 percent to Rs 1,651 crore in FY 2019-20, while the corresponding rise for the Congress was just 55 percent (from Rs 664 crore in 2013-14 to Rs 998 crore in 2019-20).
A Congress leader from West Bengal said that the effective campaigning became a challenge.
Congress candidates have increasingly been asked to curb their expenditure while campaigning. This has also forced the party to give tickets to wealthy candidates, who can self-finance campaigns and also put some money in the party’s coffers. In the 2019 Lok Sabha elections, more than 83 percent of Congress candidates were crorepatis.
One of the leaders from Bengal added that aspiring candidates are asked if they have the ability to fund their campaign. Often, many don’t have the financial background to do so, and as a result, worthy candidates end up being eliminated from the list.
Over the years, the expense of elections in India has been moving upwards. As indicated by projections by the Center for Media Studies, a Delhi-based not-revenue-driven research body, the assessed cost of the 2019 Lok Sabha political decision was Rs 50,000 crore, 67 percent more than the 2014 Lok Sabha races (Rs 30,000 crore).
BJP benefits from electoral bonds? In 2017-18, the Modi government introduced electoral bonds as an anonymous way to donate to political parties, with no upper limit. This has made political financing quite opaque.
But data does reveal that the BJP has benefitted the most from these bonds. Of the total Rs 6,200 crore worth of electoral bonds issued since FY 2018, the BJP has received 68 percent donations, the Congress has received 11 percent, while the remaining 21 percent have gone to all other political parties.
Congress spokesperson Gourav Vallabh claimed the gap in funding between the parties has been exacerbated by electoral bonds, which don’t let it be “a level playing field”.
He further said that he believed there was a clear-cut relationship between those who donate to BJP via electoral bonds and those who are awarded in the form of benefits in doing business. The BJP needs to reveal who are the electoral-bond donors to it, and who gets benefits out of disinvestment and national monetisation pipelines.
Mittal said that no election can be won or lost on advertisements. They merely aid campaigns, but that can only help to a certain extent. India Shining (BJP’s 2004 campaign) is remembered to date as being an incredible campaign, but it didn’t translate to victory.
Most calls for political funding take place through the backchannels, which requires a special kind of skill. The loss of Ahmed Patel, former party treasurer who died last year, has pinched the Congress, which has not been able to find a replacement who has the kind of corporate network and persuasive skills he had.
