7 phases, 45 days, 543 constituencies, 2,660 parties, 10,00,000 polling stations, and 96,88,21,926 (96.8 cr) registered voters. These numbers may not surprise one considering the sheer size of India's populace. What may surely boggle anyone is this -- the General Elections 2024 will be the ‘most expensive polls’ ever. Not just in the history of India, but the world.

The credible estimates, and trends from past elections, indicate the total expense to conduct the largest democratic exercise in history will surpass ₹1.20 lakh crore this time. Some put the number even higher at ₹1.35 lakh crore. That’s more than double the amount (₹60,000 crore) India spent in the 2019 General Elections.

Dr. N. Bhaskara Rao, chairman of the New Delhi-based think tank Centre for Media Studies (CMS), says if the 2019 polls made history as the most expensive polls ever, 2024 would touch new heights. “My organisation’s initial estimation of total poll expenditure was ₹1.2 lakh crore. But following the revelation on electoral bonds, with so much corporate money backing parties and every stakeholder expecting its bone of flesh, it could easily surpass ₹1.35 lakh crore,” he tells Fortune India.

Dr. Rao, whose organisation has been tracking election spending for the past 35 years, says another major signal, which made CMS up its estimates, was seizure reports by the Election Commission of India (ECI). The poll panel seized cash and other items including drugs, liquor, and gold worth ₹4,658.16 crore during 15 days before the polls started on May 19, 2024. From January 2024 till March 15, the number stood at a staggering ₹12,000 crore.

With ₹1.35 lakh crore poll extravaganza, the world’s largest democracy places itself ahead of most advanced ones like the U.S., where total estimated poll expenditure touched $14.4 billion or ₹1.2 lakh crore in 2020, Washinton, DC-based non-profit OpenSecrets.org data shows. The year 2024 is an election year globally. More than 64 countries plus EU nations, comprising half the world’s population, will go to polls this year. India's election bill will outsmart all, including an expected $16 billion in the U.S.

“If you see the trend in the last five polls, the spending is doubling in almost every election," says Dr. Rao, a veteran at tracking election spending in India. His organisation’s report ‘Poll Expenditure, The 2019 Elections’ placed India’s national elections as the “most expensive election ever, anywhere”.

Stakes, this time, are high on both sides. Prime Minister Narendra Modi-led BJP is seeking a record third term, and the Opposition looks almost tired of sitting on the other side. The results, though, could hardly throw any surprises, looking at recent poll surveys. What’s unique is the use of the election war machinery being deployed to organise rallies, and manage campaigns. That has placed India among the top spenders in national polls. Much of it is not disclosed publicly. Estimates, therefore, are based on campaign activities, voters’ observations, independent observers, candidate profiles, and media coverage.

Official vs unofficial

Since much of poll spending is unaccounted for, a tiny fraction comes through official channels. The ECI rules mandate a candidate can’t spend more than ₹95 lakh on a Parliamentary seat and ₹40 lakh on an Assembly seat. The actual spending breaches this limit by a huge margin. In the 2019 polls, an average of ₹100 crore was spent in each Lok Sabha constituency, which translated into spending of ₹700 per vote. “This time, it’ll double to ₹200 crore for each seat and ₹1,400 per vote,” says Dr. Rao.

Managing elections is also a colossal task. The EC has to ensure polls are held safely in constituencies that stretch across all kinds of geographies -- from jungles to deserts, mountains to beaches, and rural areas to metropolitans. The ECI’s election management budget was around 10-15% at ₹10,000-12,000 crore in 2019, which eventually will rise this time. 15 million ECI staff will be deployed in this poll to ensure a free and fair election. Simultaneously, four states – Andhra Pradesh, Arunachal Pradesh, Odisha and Sikkim – are also going to polls.

Election officials are carrying EVMs and other materials to their respective polling booths in Kamrup District, Assam, India, on May 6, 2024.
Election officials are carrying EVMs and other materials to their respective polling booths in Kamrup District, Assam, India, on May 6, 2024.
Image : Getty Images

The rest of the money flows into the system via several heads – cash handouts & gifts, online and offline campaigns, logistics, gold, and illicit means like drugs and liquor. Of these, campaigning forms a big part. Technological advancement globally and India’s vast internet penetration demand parties deploy vast resources on digital campaigns. As AI becomes the next big thing, parties are pumping in big bucks on AI-generated election ads.

An analysis by ADR on the Lok Sabha Elections 2019 shows the parties spent the highest amount on publicity, 49.94% of the overall expenditure. Data released by Google shows a spike in digital ad spending since March 1 this year, with parties infusing ₹52 crore between March 1, 2024, and April 9, 2024. The ad spending in the same period during the 2019 polls was ₹8.8 crore.

A TMC supporter sitting in front of a party poster of Bengal CM and TMC sumpremo Mamata Banerjee.
A TMC supporter sitting in front of a party poster of Bengal CM and TMC sumpremo Mamata Banerjee.
Image : Sudipta Das

"Digital Ad spending in elections has become a massive force, reflecting the evolving landscape of political campaigning. With extensive internet penetration and the rapidly growing reach of social media platforms, political parties are harnessing digital advertising platforms," says Amit Relan, Co-Founder and CEO, mFilterIt, a Gurugram-based AdTech company.

Electoral bonds were also a major source of funding for parties. Political parties redeemed electoral bonds worth ₹12,769.40 crore in five years from April 1, 2029-February 15, 2024, with the ruling BJP collecting a 48% share. Trinamool Congress and Indian National Congress' collections were distant second and third at 12.6% and 11%, respectively.

The Supreme Court's recent decision to scrap the Electoral Bond Scheme only highlighted the issue of mega financing in polls. Sample this: 'Lottery King' Santiago Martin's Future Gaming and Hotel Services Private Ltd donated around ₹1,368 crore to parties using electoral bonds in the past five years. And that’s just one corporate. Many big companies contributed to parties via the then-legal electoral bonds scheme.

Deep pockets

Election campaign machinery only works well if cash flows like water. No wonder many of the major party candidates are big crorepatis. The average assets of all candidates in the first three phases of polls is between ₹4-5 crore, Delhi-based political reforms think tank Association for Democratic Reforms’ (ADR) data shows.

The ADR data shows that in the first four phases of polls, 1,708 crorepati candidates have fought elections. The candidates with the highest assets in the first four phases are — Dr. Chandra Sekhar Pemmasani, Pallavi Shrinivas Dempo (BJP), Venkataramane Gowda (Congress) and Nakul Nath (Congress). They own assets worth ₹5,705 crore, ₹1,361 crore, ₹622 crore, and ₹716 crore, respectively.

ADR founder Majer General Anil Verma’s (retd.) organisation, which works extensively on electoral transparency, estimates that in the first phase 3 polls, 29% of candidates contesting polls are crorepatis. He says this number will rise manifold – up to 85% – once the winners’ report comes in. “An interesting fact, based on ADR data, is that always the highest number of crorepatis are fielded by the Congress and the BJP, meaning only the rich can afford party tickets,” Maj. Gen. Verma (retd.) tells Fortune India.

On sky-high spending, Maj. Gen. Verma (retd.) estimates the average expenses shown by individual candidates is just 55-66% of the permissible limit. “My guess is no candidate spends less than ₹20-25 crore in elections,” he says. Parties splurge money in polls by campaigning extensively, conducting large rallies, and pushing their agendas through social media, survey outsourcing, and freebies, he adds. The now-scrapped Electoral Bonds Scheme, he says, was implemented to address the poll funding issue only. “Since the identity was hidden, more money kept coming and the allocation increased manifold.”

Rising graph

ECI spend in percent.
ECI spend in percent.

The past 20-year trend on election spending shows the number rises between 50-100% every five years. In 2019, CMS estimated the overall poll expenditure at ₹60,000 crore. It doubled from ₹30,000 crore in the 2014 polls. Around ₹20,000 crore was spent in 2009, up from 14,000 crore in 2004.

Parties, media, transport companies, corporates, real estate, contractors, NRIs, and unorganised sectors – all put their weight behind favourite candidates, says Dr. Rao of CMS, terming such entities as “surrogates” in polls. Most of the funding is “surrogate”, contributing to unorganised spending. "In this election, there's estimated to be a 25% rise in unorganised spending," he adds.

Between March 1 and March 15, four days before the phase 1 poll started, the poll body seized an average ₹100 crore worth of cash, liquor, drugs, gold and freebies each day, ₹4,658.16 crore in 15 days. “The channelling of money into polls started well before March 1, 2024, because parties knew the Model Code of Conduct would be in place from March 2024. In 2019, the total seizure was ₹5,000 crore. This time, it almost touched the mark even before the polls started. If we go by layman's estimation, (surrogate spending) it could be 10 times more,” says Dr. Rao.

Maj. Gen. Verma agrees, saying the seizures by the ECI started much before March and totalled around ₹12,000 crore. The ECI’s April 15 release also mentioned that countrywide seizures totalled ₹7,502 crore in January and February. “This brings total seizure to over ₹12,000 crore, so far with six weeks still left in the election period,” the ECI said.

Boon or bane for economy

If you think massive cash flowing into the system is bad, it's not. Analysts say higher election spending means the economy would get a GDP boost of 0.2-0.5 percentage points. It will directly impact sectors like hospitality, travel, food, and collaterals, which will see increased business activity.

PM Modi during a Lok Sabha elections 2024 rally.
PM Modi during a Lok Sabha elections 2024 rally.
Image : Getty Images

"Going by the number of ₹60,000 crore spent last time according to market sources and an inflation factor of around 6% per annum, the base expenses would come to around ₹80,000 crore," Madan Sabnavis, chief economist at the Bank of Baroda, tells Fortune India.

He agrees that since marketing expenses of all parties have increased, the amount could “cross ₹1 lakh crore”. “Spending would be in travel, holding rallies, food provided to the audience, vehicles purchased/rented, helicopter charges, volunteer payments, etc.”

Sabnavis says with rising election spending, the impact on inflation will be there, though it may not add more than 0.5% to the headline number at the extreme. “This would be more on the services side followed by food. We are not yet in the stage where capacities are exhausted.”

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