New Delhi: The Congress is set to collect Rs 11,000 as ‘sahyog rashi’ (cooperation fee) from each applicant for party tickets in the 2022 Uttar Pradesh assembly elections, according to a party memo issued by state unit president Ajay Kumar Lallu Tuesday.
With just six months to go for assembly elections in five states, the Congress finds itself in an unenviable situation, not just because of organisational disarray, but also because of its big financial crunch.
This is not the first time that the Congress is seeking to raise money from ticket aspirants. 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 before the last Lok Sabha elections, the opposition party had requested its supporters to help “restore democracy” and fund the cash-strapped party through crowdfunding.
The Congress needs your support and help. Help us restore the democracy which India has proudly embraced since 70 years by making a small contribution here: https://t.co/PElu5R0mR6 #IContributeForIndia pic.twitter.com/XQ75Iaf7A6
— Congress (@INCIndia) May 24, 2018
The key question is, what made a party that had ruled India for decades so desperate that it was asking for crowdfunding?
ThePrint’s analysis 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 quagmire.
The winner takes it all
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 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 per cent 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 per cent more than the Congress’ Rs 682.2 crore.
The corporate sector is the biggest donor to political parties; in 2019-20, more than 90 per cent funding to the BJP and Congress came from big donors.
“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 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 depend on governments for getting various contracts, clearances etc. So, funding a political party in power acts as a shield for them. This is most visible in the construction sector where the government has a lot of regulatory 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 told ThePrint on the condition of anonymity.
Of course, the situation is much better when a party is in power at the Centre, too.
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 like it has in the last few years,” the party functionary added.
Impact of cash crunch
Over time, the cost of elections in India has been moving upwards. According to projections by the Centre for Media Studies, a Delhi-based not-for-profit research body, the estimated cost of the 2019 Lok Sabha election was Rs 50,000 crore, 67 per cent more than the 2014 Lok Sabha elections (Rs 30,000 crore).
Funding impacts a party’s ability to contest elections. In fact, the Congress’ situation got so dire ahead of this year’s assembly polls in four states and a union territory that the party sent out an SOS to its ministers in states, asking for 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 per cent 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 per cent to Rs 1,651 crore in FY 2019-20, while the corresponding rise for the Congress was just 55 per cent (from Rs 664 crore in 2013-14 to Rs 998 crore in 2019-20).
“Effective campaigning becomes a challenge,” said a Congress leader from West Bengal, where the party drew a blank in the elections earlier this year.
“You have to cut down on the number of constituencies you can visit, on the number of leaders you can fly down, the number of banners that can be put up… everything takes a hit. As opposed to this, a BJP candidate will be able to hold many more rallies, and will have their promises advertised everywhere… All of this makes a huge difference at a micro level,” this leader explained.
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 per cent of Congress candidates were crorepatis.
“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,” the leader from Bengal added.
Electoral bonds benefitting BJP?
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 per cent donations, the Congress has received 11 per cent, while the remaining 21 per cent 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”.
“I believe there is 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,” he said.
“Lately, corporate houses have become more circumspect when it comes to donating to opposition parties. Ruling dispensations don’t take kindly to it,” added another Congress functionary who didn’t wish to be identified.
However, BJP leader Sudhanshu Mittal responded that “if more money meant election victory, then no ruling government would ever lose. So these are all just flimsy excuses by the Congress”.
“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,” Mittal told ThePrint.
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.
(Edited by Shreyas Sharma)