Imperatives of Political Corruption in India
In India, the electoral laws
and the compensation mechanism of the representatives of the
people virtually eliminate the possibility of non-corrupt people
contesting elections to provide governance services to the nation.
The People of India - as reflected through the laws they have
enacted - WANT corruption.]
This proof has been
vetted by about 50 of India's top economists across the world and
all members of IPI. The names of the economists are listed here.
Nobody has anything further to add to this proof and as of now, no
one in India has challenged this proof, including the Dy. Chief
Election Commissioner, India.
Please check out the electoral
laws of India here.
Let us consider Mr. X, who,
convinced after tremendous reading and direct experience, that he
has understood what is wrong with India, is willing to provide
governance services to the nation. Mr. X, unfortunately, happens
to be an honest person, and as is the usual situation with such
people, is rather minimally endowed with financial assets. He has
barely enough to build a small house and maintain a small family.
He cannot afford to propagate his message to a large constitutency.
It is assumed that Mr. X is strongly influenced by the financial
calculation which he makes at the commencement of the electoral
Mr. X will enter the process of
providing governance services to India if and only if he and his
family are not financially put at serious risk in that process.
of what MPs actually get
* black money is not used.
* supporters do not fund substantially (as citizens, we usually
* there are n major candidates
* if elected, the candidate survives 5 years as representative
* once the 5 years are over the representative retires and lives
for another 25 years
* there is no inflation
* the discount rate is the market rate, say @ %
* the MP is not assassinated (i.e., we do not add any risk
* there is nothing to forfeit if a candidate loses an election.
Evidence: See here
or its mirror
Probability of being
Component 1: "Take home"
Dearness Allowance Rs. 6000
Component 2: "Against job related expenditures"
Sumptuary allowance Rs. 2500 (meant for
Constitutency allownace Rs. 8000 (meant for discretionary spending
on visitors from constituency, etc.)
Daily allowances Rs. 400
per day (meant to cover actual costs
Secretarial allownace Rs. 6000 (paid to secretary)
(not received by MP)
32 free air journeys/yr (rest out of the pocket)
(many travel more than this)
100,000 free tel. calls (rest out of pocket) (many spend more)
free to anywhere in nation
any number of times. (a privilege hardly used:
how many MPs have you met in trains?)
Pension is Rs 2500 per month (there might be a small dearness all.
In addition, an MP gets a house in Delhi. An MP has to maintain
two establishments - one at
'home' and one in Delhi.
Discretionary quotas: An MP is allowed to issue gas and telephones
to people he/she likes.
The quota for gas connections was raised from 100 to 160 and the
phone connections from 25
to 50. (unfortunately, this is not part of the 'salary of the MP).
Loss to MP: He/she stops earning whatever he/she was earning
before, while he is an MP.
Conflict of interests, mostly, and also, no time for work.
The actual take-home salary is Rs.10,000 per month.
Returns (net salary paid as
MP) Rs. 10,000 x
12 x 5
Plus pension at a fixed rate
of Rs. 1,400 per
Rule: divide each annual return by n to ensure that the
being elected is taken into account
PV of Return = 1.2 +
n n (1+
@/100) n (1 + @/100)^2
NPV = PV of return - 15
= strongly negative.
In other words, Mr. X must be willing to lose heavily and place
in great jeopardy. He will almost for sure suffer great
Of course, if Mr. X has great inherited wealth, he might wish to
it for the common good. In other words, Mr. X might well be an
The question is, are we best served by self-sacrificial altruists
alternatively, imprudent fools who jeopardize their own families?
The reality, as we well know, is far more sinister and mean and
Such people (whether fools or altruists) do not enter politics -
least on a large scale. In reality, given the nature of the fact
losses are incurred during the process of representing the people,
with huge black money, and those morally comfortable with making
transactions, enter this area.
ALMOST ALL BUT THE CORRUPT ARE DRIVEN OUT OF THE POLITICAL MARKET
The more complete analysis:
In the more complete analysis, the costs are much higher. One will
have to account for
three kinds of costs to contesting an election, one uncertainty
and four kinds of risk:
- opportunity cost of career
forgone for 6 years
(one year before elections, to familiarize the people
and 5 years as MP)
- cost of campaigning
(officially 15 lakhs; unofficially
- security deposit
Let us incorporate reality into the picture:
Cost of contesting election = close to 3-6 crores (300-600 lakhs),
stated by none other than TN Seshan, the ex-CEC.
Suggestion of CEC:
shoots down HM advice on poll reforms (see mirror on IPI here).
The Commission felt that private companies should be permitted to
contribute up to 5 per cent of the average net profits. Gill's
explanation: Companies would make donations to politicians anyway,
so it was better to make it legal, transparent and in the public
gaze, rather than drive it underground.
- Probability of return =
1/n where n = major candidates
- loss of life and limb (many
candidates are killed off,
also many ministers are attacked; Prime Ministers are
routinely blown up or killed)
- loss of future returns from
children whose careers
are ruined due to neglect of children's education
during these six years.
- risk of divorce since wife
is extremely annoyed
with the continuous infux of people into the house
- high level of inconvenience;
job of computer
engineer is much better, for example.
(however, this can be cancelled off against the
reward from public recognition, etc.)
- official salary of MP
A COMPLETELY DISTORTED VIEW OF INCENTIVES: It appears that
journalists of India have a very
poor capacity of analysis. They have always claimed that an MP
gets a lot of money, little
realizing that it COSTS enormously to become an MP, and that if
paid as poorly as they are
today, the MPs of India have not much choice except to be corrupt.
Article titled 'A case of custodians looting the coffers' by
P.L.Prasada Rao appeared on
Page 25, The Hindu dated Dec 1 1998.
Some points made were:
The monthly salary of an MP has been enhanced to Rs.4000 from
Rs.1500, his daily allowance
(a sitting fee for each day the MP attends parliament or any
meeting of the house
Committee) increased to Rs.400 from Rs.200 (on an average
there is a sitting of either of
the Houses or a committee on at least 20 days in a monthwhich
means Rs.8000 a month),
office expenses (stationery) to Rs.2500 (Rs. 1500), secretarial
allowance to Rs.6000 (Rs.
4000), constituency allowance to Rs.8000 (Rs. 6000), pairs of air
tickets to 32 (28), free
electricity to 25000 units (15000), car allowance to Rs.1 lakh
(Rs.50000), monthly pension
to Rs.2500 (Rs.1400), family pension to Rs.1000 (Rs.500),
accomodation in a mansion or an
apartment with host of other privileges. The new pay package to
the MPs brought in with
retrospective effect from April 1, 1998 is estimated to entail a
recurring expenditure of
over Rs. 15.05 crores a year and a non-recurring expenditure of Rs.
... on restoring the "out of turn" allotment of gas
connections and telephone connections,
the author says -
...Adding insult to injury, the quota for gas connections was
raised from 100 to 160 and
the phone connections from 25 to 50.
... Not the kind to be left behind, the MLAs also have been giving
themselves hefty hikes
in their emoluments. An MLA in Punjab gets the highest basic
monthly salary of Rs. 7500
followed by Haryana Rs. 7000, Karnataka Rs. 6700, UP Rs. 5850, and
Assam Rs. 5700 besides a
host of other allowances. Under the "vehicle loan
scheme" all the 87 MLAs in Punjab had a
Rs.4 crore bonanza of Tata Sumo cars. In AP, the MLAs are given a
grant of Rs.54,500 and a
loan of Rs.17,250 to purchase computers.
The author also suggests that pension be given only to those who
quit politics for good.
REALITY: Given the risks involved, the hard work and the tension
involved, I have verified
from many mothers that they would NEVER let their children enter
politics unless the salary
of the MP was raised to well above Rs. 1 lakh per month. Sanjeev.
An example of transparency
Presidents' electoral funding and Center
for Public Integrity
ISSUES NEEDING FURTHER
A project needs to be carried out
to investigate the following: [Times of India correspondent
Arindam Roy is in the process of carrying out this project. Others
A1) Go to your District Election
Officer. Check CEC
page which says
Inspection of papers and supply of copies thereof
22. Any person can, on payment of a fee of rupee one, inspect the
account lodged with the district Election Officer (or Returning
as the case may be) by any candidate. According to rule 88 of
Election, Rules, 1961, the Commission has fixed the fee of one
folio or part of a folio chargeable for the supply of attested
the account of election expenses or of any part thereof.
Maybe the electon Commission shd simply publish all these. Maybe
here can scrutinize these for Re.1 each. Arindam: here is your
authority as a citizen to investigate these expenses.
"absolute meaninglessness of the existing law on election
as per Election Commission:
* rules reg election expenses
A2) Visit the MPs/ MLAs in the state/ central capital, randomly,
appointment (you all have the press passes)
* ask them how much it cost
them to run for their
* how much it costs them to
feed the visitors who
come to their residences
* what did they declare
regarding electoral expenses
to the election commission
* opportunity cost: what is
the MP/MLA forfeiting
by not doing his/ her regular profession.
B) Visit the dalals who organize campaigns for parties.
* ask how much it will cost
Mr. X to campaign in
a constituencey of average size
(include - vehicle hire/ purchase
payments to drivers
cost of posters
cost of big cut-outs
cost of mike and
cost of wining and dining
* cost of purchasing electoral
* cost of printing manifestos/
* cost of printing party flags
C) To countercheck the info, ask poster painters and others
the cost of making large cutouts and big banners,
etc. Also check out the licence fee for putting these
D) Political party offices. Get statements regarding funds
funds spent in
day-to-day purposes, funds spent in elections,
etc. Particularly ask
the big parties how the aeroplane trips
and helicopters are
funded for the big leaders. Also find out
how the funds are
generated for 'party retainers' at the village
level, i.e., those folk
whose job is to carry petitions from
villages to the MLAs/
E) Election commission or its rep at the state level.
Ask for a copy of the
detailed statements of account of the
political parties and
the statements of campaign expenses
made by the candidates.
Also complete copy of electoral laws
relating to the
survival of a party as well as the procedure
to spend funds in a
Once the data is available, we can improve our analysis and find
it is indeed possible for any honest person to contest elections