Do not Rob Peter to Pay Paul to ensure electoral victories

[Salil Arora]

Do not Rob Peter to Pay Paul to ensure electoral victories 

By: Salil Arora, Advocate and Chief Consulting Officer, Amicus Rarus

The general elections are round the corner in 2024. Even the miniature state elections generate huge corpus and electoral spend including promised and manifested dole outs, as well as those to be paid in cash or kind for the precious voter. Estimated spend on election in 2019 was more than Rs.3 lakh crores. All this considering that the formalisation of the Indian economy, through GST had allowed capturing of at least the expenditure side of supply of goods and services properly. April 2019 over April 2018 had witnessed an unprecedented quantum leap of Rs.45 thousand crores, when no othermajor event than the election was the primary recorded change.  With the mean rate of GST declared at 15 percent, the excess of taxable supplies of goods & services was to the tune of Rs.3 lakh crores by political parties and the candidates. Including government expense for conducting general elections, which is easier to record and is estimated to be around Rs.50 thousand crores, though the government personnel are not paid extra salaries. The estimate as above does not include cash pay outs by the candidates and the parties,if any, as well as non-taxable GST supplies. Also the expenditure on the most popular item i.e. liquor which wins many hearts and votes, due to the same being in the domain of state excise and therefore, estimates not being available stands excluded.  Overall, Indian democracy involves not only huge electorate but also massive electoral spends and dole outs.  The source of funding of such spends can be both accounted or unaccounted, therefore legal as well as through generation of election time black money or even fake currency.  Therefore, the general elections in India do not only require a massive exercise of conduct but a bigger exercise of keeping a vigil on the sources of such spend. No political party can be oblivious of challenges of frequent elections that are posed for their coffers. Present Modi government had for once proposed conducting lesser elections but met with lack of response in building consensus. The brunt of electoral spend is therefore, required to be borne by the Peters (tax payers), as far as promised dole outs after the elections like free food, subsidies, guaranteed employment, social security schemes or free electricity, water etc. are concerned. The burden of immediate election spent on conduct of same by the parties is normally borne by the Corporate buddies, which almost all the political parties have, as they invest with the hope of their staked horses along with the jockeys riding on them striking at the tape at the end of Indian Electoral Jamboree.  The first type of promised electoral spent has repercussions for the tax payers as expenditure can be recurring and the Pauls (gullible voters) required to be paid over a period that the promised scheme is eventually implemented, runs for. Such running of the scheme can be for the lifetime of the party or its leader or even longer if made in the name of a national hero, acceptable to all parties like Mahatma Gandhi. While the Corporate cronies pay only once and reap the dividend immediately after the elections, it is the class of Peters (tax payers) who have to pay consistently over a period of time by way of augmented taxes, with no hope of return or even a roll back. As bigger and bigger dole outs to the Pauls are promised by the political parties in the competitive environment. While institutions like the IMF, World Bank and WTO try to rein in such expense by the Union/Central governments through various binding rules and fiscal disciplinary measures, the State governments and the regional parties manage to go scot free as they do not have to directly deal with such institutions. The growing malaise becoming part of almost all big democracies have come to be accepted by and large. But the same has a big and recurringprice to be paid by the tax payers which could be in the form of no roll back of ever burgeoning taxes as well as higher prices for public utilities like subsidisedinterest by the banks brining down deposit interest, cooking gas, petrol, electricity, increased fares of railways, ports and transport freight etc. as even few points raise in the same can lead to generation of substantial funds for corporate cronies as such public utilities are necessities and generate huge corpus across the country for the corporate friends of the political parties.

India has through great efforts by implementation of Fiscal Responsibility and Budget Management (FRBM) Act, 2003 in the last two decades brought in some sense of fiscal discipline at least in Centre by cutting deficit financing as a permissible percentage of GDP ratio as well as with great effort cutting down on agriculture and other subsidies, tax to GDP ratio is also showing gradual improvement with now 8 croresreturns of Income Tax being filed and revenue buoyancy being shown by the economy like never before in post COVID period. India is also stated to be registering highest in terms of GDP growth amongst the big sized economies. All this has been achieved through disciplined governance and persistence of tax payers to contribute to the progress of the Indian economy.   A one off event like general elections therefore, cannot be allowed to overturn and derail this process. A number of states however leave much to be desired in fiscal discipline. The political parties promising big time for the sake of winning elections must not only be cautioned by the tax paying class but also be chastised by informed voters for their dirty tricks which put their self-interest before the nation's interest. Judiciary should also intervene if political parties adhere to "drop of hat" approach in promising electoral goodies without showing extra resources to be generated other than by taxes. Tax payers should also make concerted efforts by being vocal against such attempts of "Topi Ghumao" from Peters to Pauls for electoral wins only.

(The views expressed are personal views of the author. No AI tool has been used for authorship)