Next Reform India Needs Is Electoral, Including Shift To Presidential System

When we talk of reforms, we tend to think of them as largely economic in nature. But the first and foremost reforms Indian needs are about non-economic areas like judiciary, law and order, electoral, political and constitutional reform. Without these reforms, which form the bedrock of democratic governance and the rule of law, tinkering with land, labour and agricultural reforms will not be as effective.

The first reform obviously involves the judiciary and the delivery of low-cost justice, which means police, law and order and judicial process reforms must precede everything else. I have dealt with this issue here.

The next big area of focus should clearly be political and electoral reform. Our democracy has been captured by illegitimate money power, with the poor trading in their political power for economic gains, and the rich are happy to control politics and policies through bribery and corruption. Sitting in the middle between rich and poor, our politicians have happily converted themselves into rapacious middlemen who neither serve the cause of legitimate business nor legitimate political aspirations.

Our electoral democracy has been over-run by money power. While ideologies and issues do matter, very often, at the local level, it is money and muscle power that make all the difference to outcomes.

Money power plays a role not only during elections, but even after it, when parties fall short of the majority mark and need to “buy” additional support from independents and smaller parties, as we saw after the last Karnataka assembly elections in 2018, and more recently in Maharashtra, after the winning coalition fell apart over the question of leadership. In our country, even winners end up losers sometimes, with untold consequences for governance.

How Much Money Is Spent

The late Gopinath Munde raised a storm for speaking the truth in 2014 when he said that each Lok Sabha candidate needs at least Rs 8 crore in election spends, when the official spending limits were in the range of Rs 50-70 lakh per candidate. In other words, real spends are at least 10 times as much as the legal limit, and it is no one’s case that candidates are not spending even more in some critical constituencies.

These numbers are corroborated by seizures of cash and election 'gifts' of liquor and gold. In the 2019 Lok Sabha election, the Election Commission seized Rs 3,450 crore worth of cash, liquor, gold and other valuables during the conduct of the elections from political party supporters. This works out to an average intended bribe of Rs 6.3 crore per Lok Sabha constituency. That’s not too far from what Munde mentioned.

In fact, if we assume that the amounts seized represent only a fraction of the amounts actually expended by candidates in their constituency, if we conservatively assume that the amounts seized represent a quarter of the money spent to buy votes, we are talking of an average of Rs 25 crore spent just to buy votes in each constituency.

Across 543 constituencies, it amounts to bribes valued at around Rs 13,500 crore. And remember, this amount is over and above official campaign spends, and the cost of holding the elections themselves.

If we add assembly elections, we can be sure that nothing less than Rs 40-50 crore is given out as bribes in each cycle of Lok Sabha and assembly elections every five years (ie, for each Lok Sabha constituency).

Impact Of Anti-Defection Law

The Anti-Defection Law was supposed to curb the purchases of Member of Parliament (MP) and Member of Legislative Assembly (MLA) after an election, but what it has effectively done is two things: it has reduced inner-party democracy, since MPs in large parties cannot vote as per their conscience without being subjected to threats of expulsion. They have to follow the party line or lose their membership.

The objective of the Anti-Defection Law, under which you need two-thirds of a party’s MPs or MLAs to defect together in order to remain MPs or MLAs, was to prevent elected representatives from moving here and there based purely on monetary considerations. But it has had a chilling effect on inner-party democracy.

Post-Election Vote Buying

On the other hand, in smaller parties and even in some of the larger ones, the law has simply raised the asking price for defections. After the 2018 Karnataka assembly elections, where the Bharatiya Janata Party (BJP) fell around eight-nine seats short of a majority, mind-boggling amounts were being mentioned as the amounts being offered to MLAs willing to defect.

We cannot obviously authenticate these sums, but one can assume that the inducements have to be large to get people to defect — since defection means resignation and then spending again on re-election. The Anti-Defection Law has impeded party-hopping, but has raised the booty available to MPs and MLAs when parties fall short of a majority on their own. If earlier legislators could be bought over with a few lakhs, now it is in crores, even tens of crores per head.

Cost Paid In Governance

The cost of such shifting loyalties on governance cannot be exaggerated. Governance practically stops during the conduct of an election — which runs to about four-eight weeks depending on the size of the state or a national election, when major policy decisions cannot be taken by the outgoing government.

If the results do not produce a decisive verdict, it again means delays and indecision, with newly-inducted MLAs or MPs demanding their pound of flesh in the form of “ATM” ministries. Only in India could have coined a term like “ATM ministries” without being ashamed of it.

The Maharashtra Example

In the recent Maharashtra assembly elections, the results were known on 24 October, but a government was formed by the Shiv Sena-Nationalist Congress Party-Congress only by 28 November, and the final portfolio allocation happened as late as 4 January this year, and is still far from complete.

It has taken three-and-a-half months since the elections were announced on 21 September for a government to be fully formed. It may take a couple of more months for the new ministers to start understanding the challenges and begin formulating policy responses.

Time Lost In Governance

Put simply, we are probably losing half a year of governance in every election cycle, assuming governments stop governing when elections are in sight, and this situation continues until a new government is formed. And in a country where there are one or two major state elections every year, if not more, the time lost in governance will be truly incalculable.

This is one reason why Narendra Modi wants a one-nation-one-elections cycle, but that may be only a partial solution. Something better can be attempted.

Party Funding And Electoral Bonds

Linked to this issue of vote buying and falling standards of governance is the question of funding parties. If we assume that the party system is vital for democracies to function coherently, it follows that parties must also have sources of legitimate and transparent funding. Before 2014, most parties largely relied on anonymous donors and even after 2014 this remains substantially the case.

The introduction of electoral bonds has probably ensured that black money is no longer used substantially to fund parties, but the anonymity given to donors has ensured that we can never know when a donation gets a policy quid pro quo.

Electoral bonds also tend to favour the ruling party enormously, and audited accounts show the BJP has often got more than half, if not 90 per cent sometimes, of the money raised through electoral bonds. Of the Rs 2,410 crore raised by the BJP before the Lok Sabha elections, 60 per cent came in the form of electoral bonds.

Clearly, vote buying at the party level has not stopped even with the shift from black money to white money through electoral bonds.

The Questions

How do we ensure that governance is not derailed by the Indian money-driven political system?

How do we ensure that all parties are able to get good candidates elected? How do we ensure that good candidates even get to fight elections?

How do we create a stable democracy if elections, vote-buying and party hopping become the norm?

How do we fund parties and candidates transparently?

Many remedies have been suggested.

One is the idea of one-nation-one-poll or its variant, the one-nation-two-polls idea — one every two-and-a-half years.

Another is state funding of candidates. We also have electoral bonds — which do not really ensure transparency, though they do have the minor merit of being 'white'.

Are there better solutions? Yes, but they will involve legislative and other reforms.

Reading India Right — And What Works

To reduce vote buying and improve governance, we need to understand why money plays such a big role in elections, and also a bit about how our parties function.

First, in a first-past-the-post system, many elections are won with a very small number of votes. In the 2012 UP elections, the winning party got less than 30 per cent of the votes for a majority. This means paying for the marginal 1-2 per cent increase in vote share is a viable proposition since it ensures victory. This means most victories are less legitimate than what the majorities in legislatures indicate.

Second, almost all our parties are centralised — and revolve around one personality or one family. The two exceptions to this rule are the Communists and the BJP, which are cadre-based, but with elections becoming more presidential in nature in the TV age, parties may soon prefer to have charismatic leaders and invest them with more power in order to lead them to victory. Collective or faceless leadership has not worked in the Indian context.

Three, when there are hung legislatures, money becomes even more important to get people to resign and switch sides and bargain for key ministries. This means parliamentary democracy is not working. It works better in the United Kingdom, because it has a stable two-party system, with the smaller parties being too small to present an alternative.

The conclusion is inescapable: we borrowed the wrong electoral idea from our former rulers, the colonial British.

The Remedies

The remedies I would suggest are the following:

One, shift to a presidential form of government, with the change beginning at the state and local body level (ie, directly-elected governors and mayors first, and then moving to a directly-elected president at the Centre) with substantial executive powers. This way governance would not suffer excessively either due to legislative deadlock or hung houses.

The reason for suggesting that we should start with cities and states rather than the Centre is to ensure adequate buy-in at regional levels. Right now no proposal for reform in the electoral system will pass as opposition parties are suspicious that this is about giving Narendra Modi an edge.

Two, a two-stage directly elected chief executive. This would be something like the French presidential election where the two top vote winners in the first round have a final face-off. It will ensure that the ultimate winner has legitimacy, with over 50 per cent of the votes in his favour.

Three, legislatures can either continue to be elected under the FPTP (first-past-the-post) system or a system of proportional representation. At some stage, a shift to one-nation-two-polls should become possible since, in a presidential system, governance will not suffer even if a government falls mid-term.

At worst, a lame duck all-party government may have to fill in while waiting for the next elections — a maximum of two-and-a-half years at worst — but there is always the President, Governor or Mayor or Zilla Parishad or Panchayat head who retains power and the ability to govern without a legislature.

Legislature should, of course, have the power to overrule the elected chief executive only with a 60 per cent majority. Not an easy threshold to cross, which will eliminate pure party intransigence, but a majority that can be cobbled up with a chief executive who is really unpopular.

Four, both candidates and parties can be funded through a poll tax levied as a surcharge on income tax and/or goods and services tax (GST). Political parties can be given a vote-based share of the money, as long as they cross a minimum threshold of votes either in parliamentary or assembly elections.

In this scenario, power would shift from legislators who will have to stop being middlemen and representatives of pure money power, to popularly elected chief executives. Legislators will have to focus on legislating, and not collecting bribes from both rich and poor.

Needless to say, these changes need a political consensus, but then which reform does not?

India cannot be governed effectively without shifting power from middlemen legislators who can easily fall prey to money power to elected chief executives with electoral legitimacy. It would also be a cheaper democracy to run.