What recession? Indian political parties are flush with funds

March 30th, 2009 - 2:47 pm ICT by IANS  

Bharatiya Janata Party By Khalid Akhter
New Delhi, March 30 (IANS) It may be recession time for the world, but Indian political parties appear to be awash with money as they plunge into the world’s biggest electoral battle.

There is no official estimate how much money is being spent by political parties on the staggered April-May elections for which campaigning has already begun.

What everyone seems to admit, unofficially though, is that the Election Commission bar on the maximum amount a candidate can spend in his or her constituency is invariably breached. But few get hauled up.

According to unofficial estimates, the Congress, India’s oldest and now the ruling party, is set to splurge a whopping Rs.20 billion (Rs.2,000 crore/$400 million) in this election.

A senior Congress leader however told IANS: “We would be spending almost Rs.10 billion (Rs.1,000 crore) in the next three months.”

A high level source in the Bharatiya Janata Party (BJP) said his party too had a similar budget.

Under the law a candidate can spend between Rs.1 million (Rs.10 lakhs) and Rs.2.5 million (Rs.25 lakhs) in a Lok Sabha battle.

The house has 543 elective seats.

But almost all political parties also shell out on advertisement and media blitz.

The Congress has roped in Percept, Crayons and James Walter Thompson (JWT), three leading ad agencies to prepare the party’s campaign strategy.

“These companies are behind the concept, ideas and execution of the Congress campaign,” former Madhya Pradesh chief minister Digvijaya Singh, a member of the Congress publicity committee, told IANS.

The BJP has hired ad agencies Frank Simoes-Tag and Utopia.

“They have prepared the advertisements for the BJP which will be used on TV, FM radio and print media,” BJP spokesman Sidharth Singh said.

With the Election Commission outlawing the traditionally popular — and cheaper — wall writings and graffiti, the major political parties have no option but to spend big money.

Even parties with limited influences but with national aspirations are not short of finances.

“I cannot tell you our budget but our party does not want to lag behind any other in the election campaign,” asserted Munqad Ali, a Rajya Sabha MP of the Bahujan Samaj Party (BSP) that rules Uttar Pradesh and is dreaming of winning at least half of the state’s 80 Lok Sabha seats.

Film clips showing the achievements of the BSP government in Uttar Pradesh and its Chief Minister Mayawati, who has not hidden her prime ministerial ambitions, have been on the air for weeks.

The financially more prudent Communist Party of India-Marxist (CPI-M) is not ready to reveal how much it spends on the election but insists that it never breaches the Election Commission rules.

The party hasn’t roped in any advertising agency. But it has plans to come up with CDs and audio and video cassettes featuring election songs in West Bengal in particular.

So where is the money coming from — amid the financial downturn?

“Most major political parties get donations from big business houses,” Vinoj Abraham, associate professor of economics at the Centre for Development Studies in Thiruvananthapuram, told IANS.

“Since almost all major business houses are going through difficult times, they might cut down their campaign budget. However, this may in turn attract a larger share of unaccounted black money to support the political campaign,” he added.

Abraham said the main beneficiary of the huge spending would be the media sector.

“Yet, given that such a large amount of money is going to be pumped into the economy during campaign, it is going to trigger some demand within the economy,” he said.

“The sectors that would directly benefit would be mainly media, be it print, audio or visual, communication and transportation,” Abraham added.

(Khalid Akhter can be contacted at khalid.a@ians.in)

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