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Poorer the state, the richer the neta

By Sunil Jain in New Delhi
March 30, 2009 11:24 IST
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Now that election season is upon us, we will be bombarded by all manner of analyses, pre-election surveys on voting behaviour, post-election analyses on whether people voted their caste or just cast their vote; and so on. Till then, it is a good idea to focus on more basic questions: Do political representatives make any difference, to the state they are from, or to the castes they represent (are OBCs in Bihar any better off after 15 years of Lalu-raj?); indeed, are our MLAs/MPs even representative in the true sense of the term; does only money-power matter?

As for whether our MPs/MLAs are representative of us, the answer is mostly a 'no'. By and large, the poorer the state, the richer is the MP/MLA. One way of rationalising this is to say that political leaders have always belonged to the aristocracy -- one look at the education levels of our MPs/MLAs, however, makes it clear this is not the case here.

That this should happen, though, is no surprise -- the poorer a state, the higher the chances of it being badly governed, and so the greater the scope/need for MPs/MLAs to have the power to dispense favours.

Visit the Liberty Institute's website if you want a lot more data, to construct and run econometric models especially.

  • Maharashtra has amongst the highest per capita incomes in India (if you leave out small states like Delhi) and, on average, its MPs declared assets of around Rs 110 lakh in the 2004 Lok Sabha elections, ranging from Rs 64 lakh for the Shiv Sena to Rs 191 lakh for the Congress Party (Rs 65 lakh for Shiv Sena MLAs to Rs 133 lakh for Congress MLAs).

    Surprisingly, however, Andhra Pradesh, which has a 30 per cent lower per capita income, has MPs whose average assets are around 4.5 times as high at Rs 490 lakh (TDP MLAs in Andhra had an average asset-base of Rs 190 lakh and the figure was Rs 116 lakh for Congress MLAs); Punjab MPs are the richest (its per capita income is around a tenth lower but its MPs are around six times as wealthy with average assets of Rs 672 lakh).

  • Gujarat MPs/MLAs are the paragon of virtue when it comes to their wealth (the state's per capita is around 8 per cent lower than Maharashtra and its MPs have assets which are around 40 per cent lower).

    Poorer states like Bihar, Uttar Pradesh (UP) and Madhya Pradesh are the real shocker. Bihar's per capita income is a fifth that of Maharashtra, yet its MPs are just a tenth less wealthy (Rs 101 lakh for Bihar versus Rs 110 lakh for Maharashtra) -- Bihar MLAs, however, have assets that average around Rs 20 lakh as compared to three-four times that for Maharashtra MLAs.

    UP, similarly, has a per capita income that's a little over a third that of Maharashtra, but its MPs are a third wealthier. Madhya Pradesh has a per capita income that's 40 per cent that of Maharashtra, but its MPs are just 14 per cent less wealthy.

    The other interesting thing, in the context of not just Madhya Pradesh, is the sharp rise in the assets of MLAs (there's no comparator for MPs since that data began to be collected only in the last elections).

    In 2003, MLAs in Madhya Pradesh had lesser assets than their Maharashtrian counterparts. Between the two assembly elections, average assets of BJP MLAs rose from Rs 21 lakh to Rs 104 lakh and from Rs 28 lakh to Rs 207 lakh in the case of Congress MLAs -- as a result, Madhya Pradesh MLAs are now (2008) richer than their Maharashtrian ones (in 2004) by 30-50 per cent.

  • In this case, the richer Congress did better (its seats rose from 38 to 72 while the BJP's fell from 173 to 142, though it continues to hold office).

    In Karnataka, the opposite happened. Assets of all BJP MLAs rose from Rs 133 lakh in 2004 to Rs 457 lakh in 2008, from Rs 145 lakh to Rs 425 lakh for the JDS (that's Deve Gowda's party), and from Rs 196 lakh to Rs 1,065 lakh for the Congress. Voters, however, voted out the richer Congress-JDS.

    There are other instances of richer candidates getting defeated -- in Andhra Pradesh, TDP MLAs were nearly two-thirds richer than their Congress counterparts in 2004, but the party still got voted out (in the Parliament polls too, the TDP lost out though its MPs were 2.4 times as rich as those belonging to the Congress).

    In Rajasthan, the sitting BJP government's MLAs saw their assets rise 5.6 times versus 2.0 for the Congress between the 2003 and 2008 assembly elections, but the BJP got voted out last year. In other words, parties matter, individuals don't.

    It's possible to argue the assets rose because new and richer candidates came into the fray, but a substantial part of the hike relates to sitting MLAs -- in which case, it is surprising that there has been no serious investigation into how this happened. Surely no one believes the increase in MLA wealth has to do with their supporters gifting them money as Uttar Pradesh Chief Minister Mayawati would have us believe.

    Does political representation help? Has Lalu's being in power in Bihar or Mulayam Singh's in Uttar Pradesh helped the OBCs? Based on data analysed in a forthcoming publication by Rajesh Shukla of the NCAER and yours truly, there is little to suggest this has made an iota of a difference -- income differences are explained almost solely by education/urbanisation/spread of industry and other factors that these leaders rarely ever concentrate upon.

    So when your friendly MLA/MP comes visiting the next time around, do remember to ask how much his/her wealth has gone up by, and how.

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    Sunil Jain in New Delhi
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