Business of politics: Why Madhu Koda is not an exception

It raises the question, ‘Where is democracy headed?’ That people who run businesses would be interested in driving politics of countries and vice versa, that is, people in politics would rely on business. The nexus confers benefits on both.

A cursory look at the figures published by ‘Election Watch’, an NGO, that garners data from affidavits filed by candidates at elections, analyses and publishes them, reveals that politics is perhaps the best business that an aspiring entrepreneur could try out. The returns in ‘political businesses’ are higher than the pay back in any other business.

The assets of politicians during their five-year, or lesser, tenure as legislators or ministers, have increased by anything between a few hundred to a few thousand per cent. This is 60 to 100 per cent or more return per annum. No business gives such attractive returns.
An analysis of the re-contesting candidates for the last Lok Sabha elections revealed that the average asset-value increase of all these MPs was 287 per cent, equal to Rs 2.75 crore for each MP. The maximum asset increase was 9,137 per cent! Surely, this is the business to be in, if ever there was one.
The wonder is, why then are not all entrepreneurs flocking to the business of politics. Perhaps, just as no entrepreneur would be able to enter all segments of business for very many reasons, political business too might require special qualities or have other requirements for success.

Whether there is any correlation or not between criminal records of the legislators and the increase in their assets, could only be known through a detailed study of the business they do and analysis of whether the criminal activities have any linkages to their businesses.

Statistics from ‘Election Watch’ indicates that 150 MPs in the current parliament have criminal records, an increase of 17.2 per cent over the previous Lok Sabha. There are 412 criminal cases against all MPs put together. There are 72 MPs with serious criminal charges against them, which is one in every 13 MPs.
The message here needs to be contextualised in the background of the ‘Madhu Koda episode.’ He was first elected to the Jharkhand legislature in 2005. He was chief minister for just about two years, from 2006 to 2008. The Enforcement Directorate has alleged that he has laundered money estimated to be about Rs 4,000 crore. Even if it were assumed that he started his ‘business’ right from his first year as a legislator, the ‘turnover’ is about Rs 1,000 crore per year.

Nothing is known about the ‘investment’ he made to commence his ‘business.’ His education was modest. A matriculate, who has a university degree obtained through a correspondence course, is not someone who could be considered as endowed with business acumen to acquire and manage an empire. Yet, his ‘success’ is testimony to the entrepreneurial spirit and skill of the Indian politician!
Madhu Koda is not a one-off case of making a business out of politics. An analysis of the linkage between the money spent by individuals and political parties for election campaigns would make it clear that politics is good business and that the electoral expenditure is a worthwhile investment. This is the reason for the clamour for party tickets and families in politics. There would be many more such cases of successful political businesses; only the political will to investigate the others is lacking.

Asset declaration
The Association for Democratic Rights had to knock at the doors of the Supreme Court to ensure that candidates for elections and legislators declare their assets. Asset declaration has now become a contagious rash that has crossed the borders of the estates of democracy. Judges and bureaucrats are rushing to declare their assets. Public declaration of assets by ‘public servants’ is a necessary pre-condition for democratic health.

It is not however, a sufficient condition. There is a need to go beyond the mere statistic of assets. Such statistics might satiate public curiosity in the lurid and the macabre. The data could be termed lurid since it would shock public conscience and macabre because it would induce fear of the ‘rich and famous.’
It is imperative that the manner in which the assets were acquired is investigated in all cases. Only mandatory investigation of the declared assets would deter illegal acquisition of wealth. Apart from declaration of assets, publication of the sources of income used for acquiring the assets is essential and should be mandatory.

All banks are required to report high-value transactions to the Income Tax authorities. If these authorities investigate the first such transaction, cases like Madhu Koda would not be repeated. The data on the sources of income used for asset-creation should be investigated by tax authorities and made public. This is the only way to prevent making a business out of politics and begin the process of cleansing our democracy.
(The writer is the secretary
of Citizens Action Forum)