Address by Shri M. Venkaiah Naidu, Honourable Vice President at the first annual conference on Indian Democracy at Work organised by the Foundation for Democratic Reforms, Bharat Institute of Public Policy and the University of Hyderabad.

Hyderabad | January 9, 2020

“General Secretary of the Foundation for Democratic Reforms Dr. Jayaprakash Narayan, representatives of Bharat Institute of Public Policy and the University of Hyderabad, distinguished invitees including political scientists, analysts and experts and friends from the media!

At the outset, I would like to compliment the Foundation for Democratic Reforms, Bharat Institute of Public Policy and the University of Hyderabad for organizing this first annual conference on 'Indian Democracy at Work' with the theme of 'Money Power in Politics'.

Indian democracy has proved to be a miracle by the way it has expanded and consolidated in our country during the last seven decades defying the doomsayers. It has also proved to be a theoretical surprise defying the traditional theory that democracy succeeds only in high income societies and have bleak prospects in poor and diverse societies.

At the stroke of independence, India was both poor and illiterate besides a diverse society which was not amenable for the survival of democracy. But the saga of the journey of democracy in our country has disproved all such assumptions. In the first General Elections held in 1952, 10.59 crore voters accounting for 61.14% of the eligible voters exercised their franchise. In the last General Elections held in 2019, 73.64 core voters accounting for 67.09% of the eligible voters went to the voting booths in the highest ever voter turnout so far. This ever increasing voter turnout and enthusiastic participation holding mirror to the durability of our democracy is nothing short of miracle.

The democracy at work in India is marked by staggering complexity and surprising efficiency of holding elections. We need to briefly reflect on the reasons for consolidation of democracy in our country. Democratic form of governance is not new to India. Ancient India has the glorious traditions of democratic republics prior to 6th Century BC. Vaishali in Bihar has been acknowledged by many historians as the World's First Republic. During the times of the Rig-Veda, democratic institutions called 'Sabha' and 'Samiti' existed. Even during the days of Gowtama Budha, 2500 years ago, India had many self-governing republics in the form of Janapadas. Licchavis were a well-known republic. During the Chola period, around 1000AD, local governance and democracy flourished.

These ancient republics were destroyed due to wars among the kings but the democratic ideas continued to flourish. These historical facts emphasize that democratic mindset is inherent to our ethos and culture.

During the colonial era under British rule, India came under centralized control of alien rulers and there was no self-governance.

Our Constitution-makers embarked on an unprecedented, extraordinary journey when they decided on creating a democratic republic based on individual liberty, fundamental rights, and universal adult franchise.

The Election Commission of India has been playing an effective role in conducting elections in the country and deserves compliments. Indian democracy has shown refreshing capacity to adapt to changing conditions, and uphold democratic institutions and practices.

Brothers and Sisters!

In terms of sheer numbers and the extent of participation of masses, not only did democracy and liberty endure in India, but the nation also achieved several notable successes. The largely peaceful integration of over 500 princely states of every conceivable form of diversity into the Indian Union is an unmatched accomplishment in human history. In a world in which most nation-states are struggling with multi-lingual societies, India built a stable framework for coexistence of twenty two languages, and linguistic reorganization of states proved to be a great triumph of common sense and pragmatism. While India was only quasi-federal in the early years of the republic, a true federal republic has been built over the past two decades, with states coming into their own. But the question that we need to ponder is whether we are the best democracy in the World. It is the quality of democracy in terms of free and fair political and electoral processes and the quality of governance that really matter. Nevertheless, there are many increasingly evident distortions in our electoral process which are undermining our accomplishments and impeding the twin national goals of poverty eradication and rapid economic growth.

Two glaring distortions need to be addressed by the political system with a sense of urgency and unity. The first is the use of enormous money power – often unaccounted and illegal – in politics and elections. The second is the increasing attempts to entice the voters with short term benefits at the cost of the long-term goals of basic amenities, infrastructure, quality education and healthcare and growth and job opportunities

Before I focus on money power in politics, let me briefly address the issue of short term benefits at the cost of long term goals of eradication of poverty and enhancement of incomes. In every democracy there is clash between the short term political expediency to entice the voters, and the long term public good the elected legislatures and governments are sworn to promote. Poverty can only be eradicated by enhancing real incomes and creating economic opportunities to all, particularly to the poor and deprived. Basic amenities like drinking water, storm water drainage, sewerage, pollution control, mosquito control, protection from vagaries of nature are the very purposes for which people pay taxes. If governments fail in delivering them, the rich will fend for themselves, but the poor suffer disproportionately. Quality infrastructure – in particular an efficient, reliable transport system and electricity – is critical for economic activity, job creation and prosperity.

Quality school education for every single child is a vital necessity to enhance human capabilities and fulfill the potential. Poverty can be ended only when every child gets good education; skills are improved, jobs are created and incomes rise.

Quality healthcare for every person is critical to eliminate pain and suffering, and to enhance productivity.

Short term benefits offered for electoral advantage are at the cost of the government’s ability to perform its main functions. The poor and middle classes will be most affected and growth will be retarded if there is failure of government in maintenance of rule of law, basic amenities, infrastructure, education and healthcare.

Economists, social scientists, media and civil society need to come together to evolve mechanisms to find a reasonable balance between the short term poverty alleviation and long term poverty eradication. Perhaps a time has come to consider a suitable legislation on the lines of FRBM Act. If a cap is introduced on the proportion of budgetary resources that can be deployed for short term benefits by law, then perhaps all parties will have a level playing field, and reckless and unsustainable populist promises can be kept under check. Ultimately transparent budgeting, local empowerment to enable people to see how tax money is translating into tangible services, and better service delivery are critical to help citizens make informed political choices.

The issue needs urgent attention. A combination of wise political leadership, enlightened public opinion and practical legislative measures with broad national consensus is needed to address this great political and fiscal challenge.

Let me now address the issue of growing role of money power in our political life. Political process in a democracy costs money. Parties are necessary vehicles for political participation of citizens and mobilization of people and public opinion. Parties need money to run their offices and legitimate activities. Elections cost money for the parties and candidates to convey their message to voters, and for the people to make informed choices.

It is usually said that money speaks in many ways, but the problem arises if the money comes to influence the political activities and electoral processes thereby eroding the credibility of the polity and the elections. Elections and electoral processes are the fountainhead of the sanctity of parliamentary democracy. The purity or the impurity of these processes determines the quality and the sanctity of our polity. The expanding role of money in politics and the elections over the years have given rise to serious concerns which need to be addressed immediately. In the process, it has emerged that if you are a millionaire, you have better chances of becoming an MP or an MLA at the cost of a more qualified candidate who is poor. The money power is placing entry barriers to the more deserving but who are less endowed in terms of resources.

If 543 is a reasonably good sample for any survey from which certain conclusions and inferences can be drawn, India qualifies to be among the richest in the world, going by the rising number of wealthy parliamentarians.

According to a report, of the 533 candidates elected to the 17th Lok Sabha last year and whose declared assets were examined, 475 accounting for 88% of the total are 'crorepatis'. This paradox of poor India with rich parliamentarians is raising concerns about growing role of money power in politics.

It has been reported that money power influences election processes in 40 wide ranging ways. These include selecting a candidate, setting up dummy candidates, financing weaker candidates of other parties, hiring vehicles, buying space in media, bribing voters through money, biryani, alcohol and consumer goods etc. Abuse of money in politics chokes democracy besides compromising with its integrity.

The most troublesome feature of our elections in recent decades is the rise of illegitimate expenditure for vote buying. While the picture varies, in several states an expenditure of Rs 5-10 crore by a candidate for State Assembly constituency is no longer regarded as unusual. While the legal ceiling of expenditure currently stands at Rs 28 lakh for an assembly constituency in major States and Rs 70 lakh for a Lok Sabha seat, the actual expenditure in several states is 20 times that ceiling or more. I understand that most of that money is spent for distribution of money or gifts to voters. We should not allow the integrity of our democracy to buckle under the weight of money.

During the last year’s general elections, the Election Commission has seized Rs.839 cr in cash, drugs and narcotics worth Rs.1300 cr, liquor worth Rs.249 cr, gold and silver with a value of Rs.986 cr and other freebies and items meant for distribution to voters worth Rs.58 cr. Despite the best efforts of the Election Commission, we all know that these seizures worth a total of Rs.3,500 cr were only a tip of the iceberg. Where does all this money come from? It was all unaccounted black money.

This distribution of money to entice voters obviously has grave consequences to our democracy and electoral process. Corruption becomes endemic as political activity is fueled by abuse of power. Huge entry barriers are being created in politics, and most honest, public spirited, competent citizens cannot enter the political arena. The parties are forced to opt for wealthy candidates who can spend vast sums of money, disregarding the requirements of clean politics and good governance. As a result of this vast, illegitimate expenditure the whole democratic process is undermined and the legitimacy of the system is getting eroded. It is also corroding faith in democracy and promoting cynicism.

Higher election expenses foster corruption and threaten quality of governance through compromised policy making and administration besides undermining the fairness of the election process. It also fosters collusive deal making among the politicians, elected wealthy representatives and the executive, with winners expecting to be compensated for the huge expenditure incurred to make it to the legislatures

The money power in politics is also a concern in other democracies. The British Justice Ministry in 2008 while expressing concern about the 'Commercialization of Elections' brought out a report on party finance and expenditure. It was stated in the report that while elections should be contests of ideas and visions but recently they have been over shadowed by a chase to raise vast sums of money.

Supreme Court of India also reaffirmed that money is bound to play an important part in the successful pursuit of an election campaign in Kanwar Lal Gupta Vs Amarnath Chawla case. Voters get influenced by the visibility of a candidate and party and huge election spending thus impacts voter’s choice.

Mere expenditure ceilings and exhortations are not enough. Nor will blaming parties and politicians help. Good sense and wisdom lie in applying correctives to address the problem rather than throwing blame. If vast, unaccounted, illegitimate expenditure has become a growing, near nation-wide problem, then we should realize that it is a result of a systemic problem that we failed to correct over time. The former Prime Minister Late Shri Atal Bihari Vajpayee voiced his concern over abuse of money power and said and I quote "Every Legislator starts his career with the lie of false election return he files". This, in effect means that a law maker becomes a law maker by flouting the laws right at the start.

Brothers and Sisters!

Over the years, several Committees have examined some of the major challenges and issues affecting India's electoral system and have made some recommendations. The Law Commission of India in its 170th Report on "Reform of the Electoral Laws" in 1999 and the Election Commission of India in its Report in 2004 on "Proposed Electoral Reforms" have addressed some of the issues. The Goswami Committee on Electoral Reforms in 1990, the Vohra Committee Report in 1993, the Indrajeet Gupta Committee on State Funding of Elections in 1998, the National Commission to Review the Working of the Constitution in 2001 and the Second Administrative Reforms Commission in 2008 have also examined these issues. Recently, the Law Commission in its 255th Report has also made several recommendations on electoral reforms under 3 categories namely viz., limits on political contribution and party candidate expenditure, disclosure norms and requirements and state funding of elections. These recommendations of the Law Commission are under consideration of the government.

In the context of the rising money power in politics, some prominent ideas engaging the public attention are state funding of elections and simultaneous polls.

Implementation of state funding of elections in our context is fraught with too many issues of implementation. These include; the quantum of funds to be made available to each party, basis of such allocation, funding of independent candidates, such funding either before or after elections, implications of such funding for regional and national parties, it’s impact on engaging masses in political activities, provisioning such funding etc. Moreover, state funding of elections would meet the purpose only if no other source of funding is tapped by the political parties and candidates. According to some commentators, state funding of elections is a double edged weapon, which while seeking to curb the money power would also impact the political parties in engaging with the masses and this in turn will impact their political participation. The much required political consensus in this regard is in any case still elusive.

On the other hand, holding simultaneous polls is an idea worth considering. The Department Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice has examined this subject 'Feasibility of holding simultaneous elections to the House of People (Lok Sabha) and State Legislative Assemblies' and presented its report to the Parliament on 17th December 2015. The Committee while underscoring the need to evolve national consensus on the issue felt that and I quote " the larger context of economic development and implementation of election promises without creation of the impediments due to enforcement of Model Code of Conduct as a result of frequent elections, the prospects of holding simultaneous elections need to be weighed and deeply considered by all political parties". The committee expressed the hope that a solution will be found to reduce frequency of elections which relieve people and government machinery of frequent elections.

In the light of the experience of frequent elections since 1967 and the consequences, I feel that time has come for the idea of simultaneous polls to be seriously considered. The Law Commission of India in its 170th Report in June 1999 also favoured holding simultaneous elections. There are certain apprehensions in some political quarters that simultaneous polls may benefit some parties with larger support base and charismatic leadership to the detriment of others. This apprehension does not seem to be well founded as the Indian voter has demonstrated his maturity in voting differently for the Lok Sabha and Assembly elections. Simultaneous polls could also significantly bring down the cost of holding elections by the Election Commission of India and also the expenditure by the political parties besides other advantages. Hence, I urge upon the political parties to seriously consider the option of simultaneous polls and evolve a consensus.

I strongly feel that there is a need for a strict code of conduct to be adhered to by the political parties with regard to their source of funding, expenditure on political training of cadres and their mobilization and other political activities, funding of elections and candidates etc. Political parties of the world's largest democracy should not shy away from being financially accountable as it would enhance the transparency of our democratic polity. Several other democracies have systems in place under which finances of political parties are regularly audited.

Campaign finance needs should be met by the society honestly and transparently, and the existing mechanisms need to be strengthened. Service delivery should become predictable and assured to citizens. The governance system must be transformed into a fair, transparent, rule-based, equitable and predictable system.

I suggest that Parliament should think of making a law for ensuring transparency in the polity through appropriate and actionable regulatory measures to make accounts of political parties public.

We can't afford this trend to go unchecked as it taints the integrity of our parliamentary democracy. The societal norms where money power and muscle power dominate over moral power and spirit of service make this change a little difficult.

Paid news is a manifestation of the rising money power in politics. Paid news is obviously fake news as it seeks to promote an unworthy candidate at the cost of the worthy in the elections. Election Commission has been acting against paid news but much more needs to be done to eliminate this electoral abuse. Media as the fourth pillar of democracy should rise to the occasion and not fall prey to the lure of paid news.

At times, we are witnessing systematic spread of fake news through social media by vested interests to polarize society which can even affect fair election process. The Face book- Cambridge Analytica data scandal is just an example of this. Elaborate discussions should be held by all stakeholders to suggest adequate larger measures to promote positive aspects of social media and curb the negative effects.

Brothers and Sisters!

Money power in politics cannot be controlled by the election commission alone. Besides political parties, civil society, the corporate and organizations working for electoral reforms have a larger role to play in countering this. More importantly, it is the citizen-voter who should take the lead in preventing the abuse of money power. Voters should realize that selling vote for a few thousand is the highest form of moral compromise that militates against democratic ethics. If a citizen sells his vote, he forfeits the right to take the government he voted for to task in case of the failure to deliver on the promises. We need to fix the governance system along with bold electoral reforms in order to break the vicious cycle of corruption and erosion of the quality of our democratic polity. Effective campaigns need to be undertaken to educate the voters about the virtue and the power of their votes and the adverse implications of compromised voting.

Citizens should vote in the elections based on four Cs namely, Character, Conduct, Caliber, and Capability and not based on the adverse set of four Cs namely Cash, Cast, Community and Criminal prowess. That’s the ultimate solution.

To sum up, democracy has stabilized in our country by taking deep roots over the last seven decades but it is afflicted by ‘quality deficit’. For democracy to succeed in our country, the ill-effects of identity-based voting and voting for money should be eradicated at the earliest. Holding simultaneous polls and an act of parliament for 'effective regulation of political finance', besides transformation of voters to shun money for vote are critical to enhance the quality of our democracy. Our society and political leadership have the ability to resolve our problems. Indian people are hungry for clean politics and good governance. But they must vote in a more mature and responsible manner and political parties must be made accountable to their promises and performance.

I fondly hope that before we begin to celebrate the 75th anniversary of our Independence in 2022, some effective measures would be put in place to checkmate the role of money power in our polity.

I compliment Dr. Jayaprakash Narayan for his sustained efforts for generating public awareness about clean politics and its merits.

I am indeed happy to have got this opportunity of sharing my thoughts on the causes and consequences of ‘Money power in politics.’ I compliment all of you for your participation in this conference on such an important and topical issue.

Jai Hind!”