NDA has a clear edge

How dynasties thrive

Modi's impact on businesses

Drive behind dynasties

BJP boost

NEW DELHI: Money may not always buy election victories, but then not having enough is much worse for politicians — a study by a US-based India scholar reveals that the richest of our lawmakers are roughly 75 times more likely to get re-elected compared with the poorest among them.A paper authored by University of Virginia professor John Echeverri-Gent , which will be published shortly, covers the murky world of election funding, analyses major political parties and their current electoral prowess and offers forecasts for the 2014 polls, besides assessing the strengths and weaknesses of senior leaders.Titled 'The Economy, Business, and India's 2014 Parliamentary Elections', it also dwells at length on worrying trends in foreign capital inflows to India.This assumption that rich politicians have a huge advantage over others is based on the 2009 general election results, but it could well apply to poll prospects of lawmakers in the future as well, argues Echeverri-Gent. In the previous general election, while 33% MPs who had assets of Rs 5 crore and above returned to Lok Sabha, only as low as 0.44% of those who had Rs 10 lakh and below in assets managed to win.In fact, among lawmakers who sought re-election and had assets in the range of Rs 50 lakh to Rs 5 crore, 19% won; 94% among those with assets of Rs 10 lakh to Rs 15 lakh lost, the paper reveals. Several pocket boroughs of the royalty of yore spread across Rajasthan and Madhya Pradesh are proof of this unfair advantage, which is on the rise.The professor — who first came to India in 1974 to study at Banares Hindu University as part of a student exchange programme and later set up "an agricultural farm" in Azamgarh to help people of the Chamar caste acquire new skills — told ET that he expects the BJP-led National Democratic Alliance ( NDA) to have a clear edge in the 2014 elections due to multiple reasons, and that includes BJP's prime ministerial candidate Narendra Modi 's "remarkable" campaign capabilities."Modi has been highly successful in not only mobilising core voters for the BJP but also in reaching out to other groups. At this juncture, he appears to be a far more dynamic leader than Rahul Gandhi, who is expected to lead the Congress campaign," he said. He added that it is time for the US to offer the Gujarat chief minister a visa.Echeverri-Gent notes, "The human rights violations that took place under Modi's watch in Gujarat cannot be wiped away. But should he become prime minister, the US has no choice but to allow him to visit the country."The professor, who has long been associated with the American Institute of Indian Studies , sees the Congress weaken in the run-up to the general elections this year and the Aam Aadmi Party (AAP) — which made a spectacular debut in the Delhi assembly polls — to have minimum impact outside of the National Capital Region. "I think many people who are gung-ho about AAP are caught up in a momentum of enthusiasm where they are exaggerating its prospects," he says.The Virginia university professor argues that the Nehru-Gandhi family is about to retain its hold over the Congress also because it controls the campaign funds."Why has the Nehru-Gandhi family been so influential? It is because there were leaders of tremendous stature. Increasingly, it is becoming clear there has been another factor there as well. Inflow of campaign finance allows the family to centralise control. They (the family) tend to have more access and control over this funding. Centralised campaign funding is a key feature of any dynastic political party, be it the Congress or the DMK," he says.Such funds, he notes, help the central leadership eliminate the role of affiliated mass organisations such as INTUC and others in electioneering. "Because the family has access to these funds, it reduces the party's incentive to build organisations or affiliates that connect with segments of civil society," he avers.In fact, even a Congress leader ET spoke to agrees with the assessment, but claims that "it helps the high command to ensure proper use of funds". He asked not to be named because he wasn't authorised to speak to the media.Whatever that is, historically, the Congress has been the largest recipient of corporate funds and several official agencies admit that a big chunk of the contributions by corporates to political parties are still done "under the table". Corporate donations to politicians were made legal in 1985.Echeverri-Gent hopes that, for the first time in history, the BJP, with Modi as its campaign spearhead, may secure as much — or more of — corporate funds than the Congress in the coming election.The paper lists reasons why campaign finance has become extremely crucial for India. "Besides new technology and high-priced consultants, India has the world's largest political constituency. A typical Lok Sabha seat is home to 1.5 million voters. The next highest, the US, has only 500,000 voters," he says.Echeverri-Gent doesn't believe that Narendra Modi's popularity has peaked too early.In fact, he sees the so-called Modi wave enduring. "Modi has been especially effective in mobilising the core Hindutva voters. He is very articulate, he uses the social media very well, he is a very shrewd campaigner. I see BJP's vote share going up a lot," says Echeverri-Gent.The latest paper by the Chicago University product who has written extensively on India, including on employment guarantee schemes since the 1980s, Indian politics and the economy, argues that a BJP victory would be more beneficial for businesses for a variety of reasons.An NDA win in the next election would mean acceleration to a higher growth trajectory in the short to medium term. While the NDA would be less supporting of socialwelfare schemes, its rule would see lower inflationary pressures and reduce vulnerability to global financial flows, it predicts.On the other hand, Echeverri-Gent sees a UPA victory resulting in moderate levels of growth, continued emphasis of "ineffective" social welfare schemes, along with higher inflationary pressures and exposure to volatile international capital inflows.His prediction of lower exposure to global financial capital in an NDA regime stems from the hope that Modi — thanks to his "cenralised" way of functioning — will ensure "a healthy balance" of foreign direct investment, foreign portfolio investment and foreign debt.The professor elaborates, "India has not reached the point of danger yet. Until now, India has had a very conservative monetary policy, but the trends are such that both — the share of portfolio investments and short term debts — are increasing. India needs to be concerned about this trend (and focus on enhancing FDI which is a stable form of foreign capital inflow). The Congress has failed to address these concerns, he says.Echeverri-Gent adds, "The problem comes when a country runs very high current account deficit and when it relies on volatile forms of capital flows (such as debt and foreign investment in equities, among others) in excess." Saying it as it is* Modi has been highly successful in not only mobilising core voters for the BJP but also in reaching out to other groups. At this juncture, he appears to be a far more dynamic leader than Rahul Gandhi* Up until now India has had a very conservative monetary policy, but the trends are such that both the share of portfolio investments and short-term debts are increasing. India needs to be concerned about this. The Congress has failed to address these concerns* I think many people who are gung-ho about AAP are caught up in a momentum of enthusiasm where they are exaggerating its prospects* Nehru-Gandhi family controls campaign funds, says Professor Echeverri-Gent, which is why it controls the Congress* The money helps the central leadership do away with affiliated mass organisations* The professor hopes that BJP will, under Modi, pave a new way in securing corporate funds equivalent to that by the Congress* A BJP victory, argues Echeverri-Gent, would be more beneficial for businesses* It would translate into acceleration to a higher growth trajectory in the short to medium term* There would be lower inflationary pressures and reduced* vulnerability to global fiscal flows* UPA victory will mean continued emphasis of "ineffective" social welfare schemes, notes his study.