Government, parties face funds crunch
with third election in three years
George Iype in New Delhi
The third general election in three years is leading to a tightening of the purse strings of the cash-strapped central government and recession-hit corporate India.
According to initial estimates prepared by the Election Commission, the Centre will have to spend Rs10 billion to conduct the election to the 13th Lok Sabha.
Officials of the commission said the had government spent about Rs8 billion on the last general election in February 1998. Further, they said, the expenditure could go up considerably if assembly elections in nine states are clubbed with the Lok Sabha poll.
Such huge expenditure is certain to financially cripple the government, which has not made any provisions in the Budget for 1999-2000 for this unexpected eventuality.
Finance ministry officials said the expenditure will have a severe impact on the Budget that had envisioned bringing down the fiscal deficit to 4 per cent from 4.5 the previous year.
One official said, "The mid-term poll will cripple foreign investment in the country and add to the burden of government expenditure, for two reasons". First, because of the continuing political uncertainty, the stock markets are subdued and no foreign company will venture to invest in the country in the next six months. Secondly, the government cannot now raise the ambitious Rs100 billion it had planned to collect by divesting its shares in the public sector.
"The Government of India has been caught in a vicious circle. Many budgetary provisions will have to be abandoned now because of the general election," the official told Rediff On The NeT.
Election expenditure has always been a nightmare for the central government as it has soared steadily in the last 12 elections. The government spent just Rs104.5 million in the first general election in 1952 in which 106 million of the 173 million eligible voters exercised their franchise.
Over the years, while the number of eligible voters has risen four-fold, election expenses have multiplied hundred-fold.
"Election expenses have grown dramatically in the last 10 years because we now have dozens of minor political parties scattered in every nook and corner of the country. But much of the money is now spent on security arrangements," an Election Commission official said.
EC officials said the number of eligible voters who will participate in the forthcoming election may go up only marginally even after revision of electoral rolls. Currently, there are some 605 million voters, which number is expected to go up to only 608 million after the revision.
Interestingly, the number of candidates -- 4,693 -- in the last general election in 1998 was much less than the 13,952 aspirants in 1996.
But what has begun worrying political parties is how the recession-hit Indian industry will sponsor their high-pitched campaigns.
With the elections in 1996 and 1998 having produced unstable coalitions, and the next one likely to return a similar verdict, most industrial houses are in no mood to dole out big money for the campaigns.
Of the major political parties, the Congress is said to be in the direst of straits. Having been out of power for almost three years, the party's coffers are virtually empty.
Congress sources said party president Sonia Gandhi would set up an election fund committee consisting of senior politicians to collect the money necessary to conduct its campaign.
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