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Will 2009 Elections also act as stimulus package for Indian Economy? March 9, 2009

Posted by nsworld in Business and Economy.

General Elections in India are like festivals, celebrated in every nook and corner of this vast geography. Heated discussion and debates start from the day Election commission notifies the dates(or even earlier some times) and continues till the day of swearing-in ceremony.


From, road side pan shops to the next door Kirana shops, Local newspapers to the National news channels, provide you the food for thought and discussion. Tea shops play perfect host to the heated discussion ranging from caste equations to the grape vine on the exact expense of the candidate of that particular area.


And this father of all Indian festivals, demands huge sum of money, one for conducting election itself and another for winning. For a moment lets forget that part which is required for conducting it, because this being legal and very much accounted for and the trickle down effect as well as the beneficiaries of this can also be easily traced.


`Conduct of Election Rules 1961`, fixes a maximum of Rs. 25 lakh per Parliamentary constituency as the permissible expense for a candidate (States like Goa, Arunachal Pradesh, Sikkim have lower limits). Indian experience of 14 General elections, clearly shows that, actual amount spent is always more than ten to twelve times the limit prescribed. Absence of wave in favour of any political formulation makes, it more difficult for candidates to win and in turn increases the outgo of money.


Even the conservative calculation shows that Rs.3 to 4 crore is required for winning a parliamentary seat, and a quick back of the envelope calculation for 543 seats gives out an impressive amount of Rs.1629 to 2172 crores. An average of 2000 crore spent across India by parties/candidates can in real sense increase and give push to the prevailing sluggish demand situation in the economy.


If eight hundred to thousand people work for campaigning for a particular candidate in a constituency and on an average each constituency has got four candidates, then each constituency gives 30 to 40 days assured job for 3000 to 4000 people on a daily wage of not less than Rs 100. And assured 30 to 40 days job for 16 to 22 lakh youths at all India level. This sounds interesting right!!!!


Door to door campaign especially in rural areas demands extensive travelling on the part of candidates and his/her followers. keeping this in mind already many political parties/candidates have placed orders for SUVs, like Innova, Scorpio, Bolero, Honda CRV etc. This development has come as a ray of hope for many Automobile companies during these difficult times.


In a nutshell, Elections and the money spent creates positive effect at least from the demand side of the economy at this point of time and should be welcomed by one and all and can safely be termed as another Stimulus package to kick start the economy.



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