LS MPs must be moneybags!

NEW DELHI: Winning candidates on an average spent over 30 times the stipulated amount for a Lok Sahba seat in the 1999 general election in India, says a World Bank report.

While the campaign ceiling for a Lok Sabha seat has been re-pegged at Rs 2,50,000, the average winner spent about Rs 83,00,000 in the 1999 Parliamentary election, said the report ‘Reforming Public Services in India — Drawing Lessons from Success’.

Given that the figures quoted from a study by the World Bank are for the 1999 polls, experts believe that the candidates must have spent much more in the last Lok Sabha polls.

The report attributed the staggering expenses to the growth of the multi-party system in India. “The growth of multi-party competition in tight races has encouraged a free-for-all to outspend opponents to win,” it said.

According to the report, the unregulated cost of elections has created incentives for some politicians to extract rents from public administrations or service delivery, to fund campaign expenses or pay back contributions.Though the government allowed tax-deductible company donations in ‘03 to encourage payments by cheque, many donors avoided doing so for fear of losing anonymity, the report said.

The report suggested that the government can consider clubbing party and candidate expenses on a campaign under a single and realistic ceiling or create separate ceilings for both categories to restrain the cost of campaigns. Currently, party expenses are uncapped.

The World Bank report said choking off the supply of money unaccounted for in the economy through measures such as simplification of income tax, dismantling of unnecessary regulatory controls and enforcement of anti-corruption laws will make it easier to reform the electoral funding system.

The report pointed towards another adverse repercussion of the growth of the multi-party system in India. It said many Indian states will be prone to spending less on development and more on salaries as they move towards multi-party system. “As several Indian states move towards multi-party systems, the challenge will be to ensure that service delivery does not suffer,” the report said.

In two party systems, the winning threshold is significantly higher than in multi-party systems. As a result, two-party systems put a premium on interest aggregation cutting across segmented identities of race, caste or class. In multi-party systems, however, winning thresholds are much lower and smaller parties have to cling more faithfully to their traditional basis, the report said.

This, in turn, increases the significance of narrow groupings, the World Bank said.“Multi-party systems are thus more likely to deliver club goods to their followers in the form of patronage involving jobs, contracts or schemes targeted at particular groups. Two-party systems on the other hand are more likely to focus on providing genuine public goods to a large cross section of groups,” it said.

When multi-party systems produce fragile coalitions, alliance partners may jostle for the spoils of office. The longevity of the government may be in doubt and create uncertainty and politicians may be more concerned with survival rather than long-term improvements, It said.