Campaign Finance Reforms in India: Issues and Challenges

ORF Seminar Series
power, it can make money. It is very important to note that politics has become
business. Economists never thought that public expenditure would be treated
as a milch cow. We thought there would be benign governments, Welfare States,
people full of character and people who would not extract money. In foreign
countries there is the State, but here we have made common people the main
donor. Even if you collect ` 10 per person imagine how much it comes to.
We are not debating merits and demerits; there are so many other concerns and
in a holistic fashion you have to count them. From an economist's angle, we
assume that the system is fair, assume that there are enough checks and balances
and accountability and transparencies which are the pre-requisites of any moral,
political, ethical system of governance, including elections. The idea of
economists was that if parties start collecting money, particularly from business,
businessmen also treat it as an investment. If a businessman gives ` 1 lakh, he
will expect ` 10 lakh in return, sooner the better. The pay-back periods are
getting reduced. Mr. Rudy said the black money component in campaignspending
is going up. We are already seeing in every transaction that the black
money portion is going up. So, the idea is not to influence public policy through
money power, it is particularly for influencing business policies, economic
policies to the advantage of a particular corporate house. This is the main idea.
If you isolate it, and if elections are genuinely funded outside of vested interests
who turn public policy for their personal and corporate benefit, the logic of the
economists still remains valid.
But this has now manifested itself in so many other ways that we are simply
overtaken by corruption, we are overtaken by black money; economic reforms
have not helped simply because political reforms, which we all economists now
recognise, are a pre-requisite for good governance. Economic reforms are not
enough by themselves. It has been well said that just focussing on election
campaign funding will not be enough. It will be a brick, an important
component. Don't reduce it to nothing, but for heaven's sake, as Mr. Mendiratta
and others have said, you have to first make sure that there is political will and
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