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Black money: With One Stroke, PM Modi Hits at the Root of India’s ‘Election Economy’

D P Satish | CNN-News18 dp_satish

First published: November 9, 2016, 12:19 PM IST | Updated: November 9, 2016
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Black money: With One Stroke, PM Modi Hits at the Root of India’s ‘Election Economy’
Prime Minister Narendra Modi reads a joint statement with his British counterpart Theresa May (unseen) at Hyderabad House in New Delhi on November 7, 2016. (Photo: Reuters/Adnan Abidi)

New Delhi: Two and a half years after he won an election dubbed as the most expensive election in Indian history, Prime Minister Narendra Modi has dealt a huge blow to India’s much-talked election economy by scrapping all Rs 500 and Rs 1,000 currency notes.

“We talk about use of black money in elections. We have to set the country free from corruption and black money,” Modi said in his televised address to the nation while announcing the surprise move.

Even though no political party is ready to admit it openly and for the record, all are united in the fight against black money, it is no secret that most of them are stunned.

A few politicians privately complained the government move was timed to choke funds ahead of the crucial state assembly polls to Uttar Pradesh and Punjab Assembly elections. The BJP has rubbished such claims as absurd.

The funding of political parties and their election campaigns remain opaque almost seven decades after Independence. Various studies and surveys done on the issue show that candidates with no money or less money have almost zero chance of winning an Indian election.

Minutes after PM’s announcement, speaking to CNN-News18 noted political analyst and politician Prof. Yogendra Yadav said that it was a good decision to curb the influence of money in our electoral politics. But he attacked the BJP for calling it a “surgical strike" on election economy.

According to a study done by the Centre for Media Studies (CMS) over Rs 30,000 crore was spent on the 2014 Lok Sabha elections. On an average, a whopping Rs 55 crore was spent in each Lok Sabha seat in the country. But official spending by the ECI and the Government of India would only be around Rs 7,000 – Rs 8,000 crores. Former prime minister AB Vajpayee had once lamented that, “Indian politicians start their legislative careers with a lie — the false spending returns they submit. How can we expect them to be honest?”

In the recently held Tamil Nadu Assembly elections, an estimated Rs 5,000 crore was spent by the candidates. Over Rs 200 crore was seized by the Election commission at various places making it the largest haul of election money.

According to political leaders the entire money spent on elections will always be in cash and it comes from real estate, infrastructure, smuggling and other illegal businesses. Most politicians and their funders keep the money readily available in cash and take it out during the elections.

H Vishwanath, a senior Congress leader and former minister from Karnataka, said that tens of thousands of crores of such money have become now become worthless. Speaking to CNN-News18 he said, “we all know how mining mafia ruined Karnataka politics. The entire money was in cash. I am sure, thousands of crore in cash has been kept at various places for the next election. All these have now become worthless. Hope the good people win next time”.

UP and Punjab together expected to witness a flow of at least Rs 5,000 crore in the next Assembly election. With PM Modi ruining their party, all major political parties will have to really fight hard to raise money for a decent show.

A top corporate leader who once fought an election told some of his media friends recently that even though he had hundreds of crores in bank, he could not match the spending power of other candidates who were spending crores like water. “All my money is legal. But, you can’t spend your legal money. My opponents had no such issues. They were distributing the money like water,” he said.

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