Data suggest that those who contested in elections had their wealth grow rapidly
15-Apr-2017 •Vivek Kaul
If you were the kind who was born in a small town in eastern India, as I was, you would have always been told that studying science (which could also mean getting a degree in engineering or becoming a medical doctor) was much better than studying arts.
If you wanted to build a career in anything, you had to study science. Those who could not get admission into a science course studied arts and commerce. At least that is what the traditional wisdom, which was all wrong, used to be.
Nevertheless, as you live and learn, you realise that the arts subjects are equally, if not more, important than studying just science. As I have read more and more, this has occurred to me over and over again over the last two decades.
And it happened yet again over the course of the last ten days as I read through Milan Vaishnav's When Crime Pays: Money and Muscle in Indian Politics. This is the first time I have read a book which comes closest to political science. And what I loved about the book was its data-driven approach (something conventional wisdom expects only with science). It also led to the realisation that non-economics subjects can also be extremely data-driven, which is a rather obvious point many of us don't realise because of our conditioning.
One of the important points that Vaishnav makes in the book is that politics is an extremely lucrative proposition. As he writes, "In an attempt to quantify just how lucrative a career in politics can be, a 2013 study analysed the financial disclosures of state and national incumbent legislators who had won elections and then stood for re-election several years later." The study found that the average assets of sitting legislators increased by 222 per cent, to Rs 5.8 crore, from Rs 1.8 crore, earlier.
While the assets of those individuals who won the elections grew very rapidly, the research showed that the assets of all candidates grew as well. This basically meant that the assets of re-contesting candidates grew rapidly. The average declared assets of re-contesting candidates (which included losers as well as winners) stood at Rs 4.08 crore, up from Rs 1.74 crore, at the time of the last election. This meant a jump of 134 per cent in a period of five years between the elections. This wasn't as much as the winning candidate but was substantial nonetheless.
In fact, as Vaishnav writes, "While re-contesting candidates all saw an increase, there was a distinct winner's advantage. Moreover, legislators with criminal records fared even better than comparable clean candidates. This latter finding is not unexpected, given the fact that politicians engaged in illegal activity might be more inclined towards misusing office to extract greater financial rewards."
This trend was also observed among the MPs who got re-elected to the Lok Sabha in 2014. A study carried out by the Association for Democratic Reforms found that 165 MPs were reelected to the Lok Sabha in 2014. In 2009, the average assets of these MPs stood at Rs 5.38 crore. These had jumped by 137 per cent, to Rs 12.78 crore, by 2014. This basically means that the assets of MPs went up by close to 19 per cent per year on an average. And that is huge. The interesting thing is that 71 MPs, or 43 per cent of the re-elected MPs, had criminal cases filed against them in 2014.
Also, it is worth mentioning here that the analysis has been carried out on the declared assets of the legislators as well as the MPs. It is safe to say that there are undeclared assets over and above this that these individuals have.
What are the reasons behind the assets of elected representatives going up at such a rapid rate? As Vaishnav writes, "Once in power, legislators have significant discretion and influence in the awarding of government contracts and licences, especially in sectors where the regulatory footprint of the state is high. This sets the stage for bribe taking and regular conflicts of interest."
A good example of this is real estate. There are so many rules and regulations governing the sector that it is very difficult for any builder to follow them in a short period of time. This is where MPs and MLAs become very important for builders. The speed of the money given by builders to elected representatives essentially ensures that things move at a faster pace than they normally would. Everyone, including bureaucrats, benefits in the process. Of course, the buyer pays for this in terms of a higher price.
Hence, it is safe to say that as far as money and assets go, politics is a very rewarding profession. Over and above this, over the years, it has become more and more expensive to fight an election. In this scenario, anyone looking to fight an election at the state-assembly level or the Lok Sabha level needs to be reasonably rich to start with.
Research carried out by the Association for Democratic Reforms shows that the average assets of the winning candidate in the 2014 Lok Sabha stood at Rs 14.7 crore. In comparison, the average assets of each candidate stood at Rs 3.16 crore. Also, the average assets of the winning candidate in the 2009 Lok Sabha had stood at Rs 5.35 crore.
In fact, 82 per cent of the MPs in the 2014 Lok Sabha are crorepatis. In 2009, this figure was 58 per cent. This clearly shows that one needs to be reasonably rich to win a Lok Sabha election. In fact, as the Association for Democratic Reforms report points out, "The chances of winning for a crorepati candidate in the Lok Sabha 2014 elections are 20 per cent, whereas for a candidate with low assets, (less than Rs 1 crore) they are 2 per cent."
Further, such a trend is clearly visible in the assembly elections that are currently on in Uttar Pradesh, the country's most populous state. I aggregated data provided by the Association for Democratic Reforms for the first three phases of polling in the state and found that 34 per cent, or 808 out of the 2,368 candidates in the fray, were crorepatis. This in a country where the income of the average Indian is just over Rs 1 lakh per year.