Black money and politics
People expect too much of
their politicians. They wish
them to be clean, moral, ethical,
honest, upright, truthful and saintly,
if not saints. In a word, people want
their politicians to be all that they
themselves are not. This is an attitude
we have inherited from a generation
of politicians who actually fit this bill.
Early public life in India did not
require much money. The times were
simple then and participation in
public causes was voluntary,
spontaneous. The first generation of
public leaders comprised mostly
successful professionals—lawyers,
journalists, judges and teachers. They
often spent their own money for
public causes, such as printing and
distributing pamphlets, resolutions,
etc., for protest meetings and rallies.
That was the case from the 1883 Ilbert
Bill protests to the founding of the
Congress in 1885, when organisers
charged a membership fee from
delegates, a convention which
continued largely until Gandhi’s
ascendance in the Congress at Nagpur
in 1920.
Gandhi then became the first big
time political fund raiser. He called
for contributions at public meetings
and did not hesitate to seek and collect donations from the rich and the
wealthy. Many businessmen, like
Jamanalal Bajaj, became members of
the Congress and contributed liberally to its funds. Gandhi was an innovative fund raiser. His four anna
membership is an instance of his
innovative ways. He did not hesitate
to ask women to contribute gold jewellery for national freedom. In later
life, when he had become popular
enough, he even charged fees for autographs. All money so collected
went to the Congress treasury.
The need for funds under Gandhi
grew as the Congress expanded its
activities and the party developed
into a formal political organisation
with regular office-bearers. The
Congress leaders began to draw funds
from the party treasury for organisational and political work, for travel,
publications, etc. The Congress leaders of that generation were, however, scrupulous people with a high-minded sense of integrity in public life.
Every one of them maintained meticulous accounts with receipts for even
the smallest expense. Instances of
malfeasance or misuse of organisational funds did occur even in those
days but these were few and were
strongly looked down upon.
Things changed after
Independence. The needs for funds
changed. State leaders and factional
satraps now needed funds to rehabilitate their colleagues who had
spent years in jails and whose families had suffered much deprivation
during the freedom movement and
who could not find jobs on coming
out of jails. Congress leaders at various levels began looking for ways to
help them. One way was to set up
hospitals, dispensaries, schools and
colleges, libraries, and trusts named
after the national leaders. All these
needed funds.
Those days because of scarcity
conditions rationing was in force.
That in many places became an avenue for making money. Allotment of
ration shops and release of foodgrains,
cloth, etc., were skillfully manipulated. Businessmen and manufacturers
and shopkeepers all indulged in
black marketing and hoarding, buying
political protection. The news of such
wrongdoing reached Gandhi, who
protested to Jawaharlal Nehru and
Sardar Patel. “Some people are even
saying that the rule of the English
was better than that of the Congress
now,” he wrote to Patel in one letter.
The situation got worse with the
beginning of post-independence
competitive electoral politics in 1952,
especially in the factional politics within the Congress itself. Use of
money to advance personal and
factional interests became widely
pervasive. Even in the very first
general election, money began to get
important, though it would still be
quite some years before its use would
become worrisome. The establishment of the license, quota and permit
raj that Nehru’s industrial policy of
1956 introduced at national and state
level institutionalised corruption.
This phase continued until the
ascendance of P V Narasimha Rao
and the opening of the economy. Big
industry and business and the
political and bureaucratic bosses at
all levels became the major
beneficiary of the license raj.
What was bad about the license raj
was not that it bred corruption but
that the licenses obtained through
this corruption contributed but little
to investment in new industries or
expansion of the old ones. During
this period, licenses were bought not
for raising production but mainly for
controlling production to make
monopoly profits out of scarcity.
Industrialists cornered licenses and
never implemented them. Vested
interests were created in creating and
continuing conditions of scarcity and
shortages. As the Government
restricted production capacities,
incentives were created in the economy for avoiding implementation of
manufacturing licenses. Industry and
businesses made huge profits in a
scarcity market by selling things in
black. A considerable part of these
profits found their way into the pockets of politicians.
It is only when a new generation of
young and ambitious entrepreneurs
came up on the scene during the
Indira Gandhi’s time that the stranglehold of the blackmarketeers was
somewhat broken. This new generation used the ways of the old to
smash monopolies. As they grew, so
did their contributions to political
parties, mainly the Congress, though.
Other ways funds were raised for
politics included quid pro quo for
government contracts for development projects like building of roads,
bridges, irrigation canals, etc. State electricity boards were treated as
milch cows.
Things changed after Independence. The needs for funds changed. State leaders and factional satraps now needed funds to rehabilitate their colleagues who had spent years in jails and whose families had suffered much deprivation during the freedom movement and who could not find jobs on coming out of jails. Congress leaders at various levels began looking for ways to help them.
Then came the social and political changes of the 1980s when
politics began fragmenting and
numerous local parties emerged in
different states. As politics became
more and more destabilised and
uncertain, big business and industry
felt reluctant to set up manufacturing
facilities outside a few select areas.
The economies of the States began
declining, leading to dwindled avenues of raising funds for political
activity. It was then that land deals
and liquor licenses and manipulation
of excise duties became prevalent.
That is when the D P Yadavs, Venod
Sharmas and Ponty Chadhas began
growing up.
This has proved to be the most
regressive way of raising political
funds. Favours done to big and industry and business of Kolkata and
Mumbai was in a sense progressive
because these deals led to growth of
economic activity whereas fund raising through liquor and land deals
serve only to de-accelerate economic
growth. Ponty Chadha was a symbol
of that regression.
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