While electoral system in India has improved over the years, black money is one problem India is still grappling with. In 2010 Election Commission set up an Expenditure Monitoring Division to monitor spend by candidates. Accordingly all candidates have to open a separate account and all campaign expenditure has to be from that account, so that monitoring is easy. EC is also maintaining shadow accounts to map candidate spend.
However, Yogendra Yadav, earlier a psephologist, and now an Aam Aadmi Party leader, says there is always a legitimate account and an illegitimate account for every kind of expenditure: candidates maintain two sets of account books. "Expenditure that the Election Commission thinks is electoral expenditure is actually a tiny fraction of the total election expenditure. Publicity material, pamphlets, leaflets now constitute a tiny fraction of the expenditure of parties."
Yadav says that there is a strange situation in the country. "We have the front door which is so meticulously manned, that it is painful and all this when the back door is left ajar. Our economy is such that much of the election expenditure does not happen through banks. It is in cash. The least important things are monitored; the most important things are left untouched. Every time EC wakes up, its puts more restrictions on those tiny monitored items. "The focus should not be on guarding the front door only. How much can a candidate spend on pamphlets that are being so closely monitored by the EC? Adequate attention should be paid to the back door and the windows that are open all the time."
Officers at the Election Commission confirm that they are videotaping every kind of visible expenditure -major rallies, hoardings, feasts - and adding it to the candidate's expenditure. However, a different story is playing out in rural constituencies, which are vast, with little EC staff to monitor spend. Also since a team is managing these activities, in a 'supporters' stronghold, nothing much comes to the EC's notice. Out of a total of 11 million people working in election management, less than 10 cent check on spend.
Chief Election Commissioner V.S. Sampath says that the EC has set up flying squads, risk surveillance teams, video surveillance teams, parallel accounting teams to monitor spending and movement of money. The latest initiative by the EC is that of setting up of a Multi Departmental Committee on election intelligence involving the Directorate of Revenue Intelligence, the Coast Guard, and the Financial Intelligence Unit among others. Sampath says that with coordination a lot more can be done. "They can share intelligence on movement of money. Especially movement/ transfer of huge amount of money close to the polls from bank accounts." However he aggress that nothing can be done in cases where money moves through couriers. Experts point out that since a majority of this money is black; the movement is through the hawala channel and not accounted for in the banks. As per industry insiders, angadias (a long existent, unofficial courier channel) from Delhi and Mumbai are charging Rs 3 per Rs 1000 transfer to state capitals and Rs 5 per Rs 1000 transfer to district centres. The usual rate is Rs 1-1.50 per Rs 1000 transfer. Everyday crores worth of cash is being routed through the hawala channel.
The EC has also set up a complaint helpline number: 1950, but an official from the EC says that they mostly get information from opposition candidates/ parties. "But by the time we reach there everything is over."
Trilochan Sastry of the Association for Democratic Reforms says that despite the fact that the EC has set up monitoring cells, not a single candidate has been disqualified on grounds of excessive spending. "This creates a culture of complacency where everyone knows that nothing will happen." Election Commission should not only monitor the spend but also question the source of the money and take action on it.
With no clear estimates on election spend, some observers hint that in the 2014 general elections Rs 40,000-50,000 crore will be spent. Centre for Media Studies estimates Rs 30,000 crores. "This Rs 30,000 crores estimate for 2014 is against Rs 10,000 crores estimated by CMS as expenditure in the 2004 Lok Sabha election. From 2,500 crore expenditure in the 1996 Lok Sabha poll, it has increased ten times," says N Bhaskara Rao, Founder-Chairman of New Delhi based Centre for Media Studies. Which such estimates, N Gopalaswami, former CEC says, "We could match gun power with gun power by deputing military forces at the remotest of places and countered muscle power to ensure free and fair elections… we possibly can't match money with money." To counter this surging trend of black money, even as some experts advocate state funding of elections, most believe that state funding can only be done if the state only knew how much to fund.