Why are Indian politicians corrupt? There's a good reason for it.
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00:00Builders and players in real estate and construction are huge funders of elections.
00:13What we've done is to look at how the consumption of cement actually shrinks right before the
00:19election.
00:20And the reason that's the case is because all of the cash that's in the construction
00:24industry actually temporarily gets funneled out into political campaigns, which means
00:29they actually see a slowdown in the building and therefore a slowdown in the consumption
00:33of cement.
00:34And that temporary drop happens just in the month right before election.
00:54Unless you're an industrialist, a criminal, a celebrity, a part of a political party,
01:05a dynasty, there's very little space for you to make it in politics today.
01:09That elections in India have become exceedingly expensive over time as the size of the population
01:14has grown, as elections have become more competitive.
01:17Parties are on a kind of constant search for ways to cover their financial costs.
01:23And often that leads them down many corrupt pathways.
01:31The first is just, you know, in the average member of parliament covers a constituency
01:35that has, you know, between two and two and a half million people, which means just to
01:40establish the kind of contact with voters requires spending a lot of money to get around
01:45and get your word out.
01:47The second is that, you know, increasingly we're seeing a lot of parties and candidates
01:50spend on digital media and social media advertising.
01:54So the advertising budget has grown hugely, used to be primarily a kind of retail based
01:59campaign where you're glad handing, you're kissing babies, you're meeting villagers.
02:04It's become much more sophisticated over time.
02:07And the third is that every political candidate who's serious about contesting offers freebies
02:13or cash giveaways in the last 48 to 72 hours of campaigning.
02:18They're just giving away anything from cash to jewelry, to liquor, in some cases even
02:23drugs.
02:24The irony is that they have been billing this as a huge victory for transparency, but it's
02:38actually not transparent at all to anyone but the two parties involved.
02:43The Modi government instituted a new instrument of electoral giving called electoral bonds,
02:49which sound really fancy, but the way they work is really simple.
02:53Any private individual or corporate entity can go to a bank, can buy a bond in any amount
02:58they want, and then deposit that bond in the bank account of a political party.
03:04The advantage of this for whoever is giving the donation and whoever's receiving the donation
03:08is that these bonds are completely anonymous.
03:11So the corporate entity knows who they give it to, and the recipient knows where the money
03:17is coming from, but no one on the outside knows about the transaction.
03:21In years past, there's been a limit on how much corporations can give.
03:25They could give up to 7.5% of their net profits.
03:30What the government has done is to eliminate that entirely.
03:33So now corporates can give up up to 1.8%.
03:36Over 95% of the bonds which have been bought so far have gone to the BJP.
03:43We don't know who's bought those bonds, and we can't just aggregate within that 95%, but
03:49the lion's share of those instruments have benefited the ruling party.
03:53Number one is, it could insist that every rupee of political giving, either to a party
04:03or to a candidate, has to be processed digitally so there's no more cash, so everything needs
04:09to be for sale.
04:10Number two is that political parties right now aren't subject to any kind of independent
04:15audit of their books.
04:16So political parties have to disclose their balance sheets, but they're usually created
04:22by their own chartered accountants.
04:24There's no third-party check on whether or not these numbers have been doctored.
04:28So no one really takes it very seriously.
04:30And number three is that India has a very powerful election commission which supervises
04:35the conduct of elections and is in charge of regulating campaign finance, but the regulations
04:40and authorities that that commission has date back to the early 1950s.
04:45And so very simple things like politicians paying off media houses to write favorable
04:52news stories isn't actually a violation of campaign finance law.
04:57So these are three simple things that India could do if it was serious about taking up
05:01the challenge.