Prime Minister Narendra Modi’s midnight stroke has left many baffled and the worst affected are the election-bound states of Punjab and Uttar Pradesh on the political front. The war on black money has created a piquant situation for the political parties in these states. It looks for the time being horse trading would get a jolt. This is a big strike against black money that political parties may have already kept aside for the campaigns. For, the piles of cash are now a worthless heap. The elimination of Rs 500 and Rs 1,000 notes may affect some parties more than others, particularly regional players who are yet to master the sophisticated ways of dodging regulations to ensure a steady flow of cash. The role that cash plays in polls can be gauged from the fact that as much as Rs 1,039 crore of the total collections by parties over the past three Lok Sabha polls – 2004, 2009 and 2014 – was made in cash against Rs 1,299.53 crore by cheques. Of the Rs 2,259.04 crore collected by Congress during the Lok Sabha and assembly polls between 2004 and 2015, 68.33 per cent was in cash. For BJP, this figure was 44.69 per cent of their total collection of Rs 1,983.37 crore over the same period. While cash donations are declared by political parties in line with Election Commission guidelines on transparency, seizures during polls indicate that much of the campaign funding is done through black money. For instance, around Rs 330 crore was seized by the Election Commission in cash during the last general elections in 2014. The figures speak of the enormity of the influence of the black money on the polity of the country. It also cast aspersions on the fairness of the electoral process which after all efforts have not been able to come out of the influence of the black economy. This may be a beginning of providing India as an open economy to world and to woo more investment so that manufacturing gets the boost it was looking for. More reforms are needed to make “Make in India’ a reality by creating a conducive business atmosphere through the stable and transparent regulatory mechanism.
