The Economics of Political Campaigns: Where Do Campaign Funds Go?

In the world’s largest democracy, the political landscape is as dynamic as it is diverse. Indian political parties rely heavily on advertising to reach voters and convey their messages. Recent data from FactChecker, analyzing annual audit reports submitted to the Election Commission of India, reveals eye-popping figures. Between 2015 and 2020, a staggering Rs 6,500 crore (Rs 65.641 billion) was spent on elections by 18 political parties, with more than Rs 34 billion (52.3%) dedicated solely to publicity. This article dives deep into the expenditure patterns of these parties and examines the role of advertising in Indian politics.


Economics of Political Campaigns: Where Do Campaign Funds Go?

The Players: National and Regional Parties


The political arena in India is marked by the presence of both national and regional parties. Among the seven national parties, notable names include the Bharatiya Janata Party (BJP), Indian National Congress (INC), Bahujan Samaj Party (BSP), Nationalist Congress Party (NCP), Communist Party of India (CPI), and Communist Party of India (Marxist). The regional parties comprise Aam Aadmi Party (AAP), All India Majlis-e-Ittehad-ul-Muslimeen (AIMIM), Janata Dal United (JDU), Janata Dal Secular (JDS), Akali Dal, All India Anna Dravida Munnetra Kazhagam (AIADMK), Dravida Munnetra Kazhagam (DMK), Shiv Sena, Lok Janshakti Party (LJP), Yuvajana Sramika Rythu Congress Party (YSRCP), Telangana Rashtra Samithi (TRS), Samajwadi Party (SP), and Rashtriya Janata Dal (RJD).



Election Expenditure Breakdown


When dissecting election expenditure, the data reveals intriguing insights. The BJP emerged as the front-runner, accounting for 56% (over Rs 3,600 crore) of the total election spending by the 18 parties over the five-year period. The INC followed with 21.41% (over Rs 1,400 crore). Astonishingly, these two parties collectively comprised more than 77% of the total five-year election expenditure.


Samajwadi Party (3.95%), DMK (3.06%), YSRCP (2.17%), BSP (2.04%), and TMC (1.83%) rounded out the list, albeit with a significant margin behind the top two spenders.



The Role of Advertising


For BJP and INC, advertising was a substantial component of their election budgets. Over the last five years, BJP allocated 54.87% (over Rs 2,000 crore) of its total election expenditure to “Advertisements and Publicity.” Meanwhile, INC directed 40.08% (Rs 560 crore) of its election spending toward publicity. These numbers highlight the pivotal role that advertising plays in their campaign strategies.



Notable Absences


Interestingly, some parties, including AIADMK, AIMIM, JD(U), JD(S), and Akali Dal, did not report any election expenditure for certain years. For instance, JD(U) reported zero election expenditure in 2016-17 and 2017-18.



Recent Trends


In the 2019-20 period, political parties spent approximately 49% of their total poll expenditure on publicity or propaganda, amounting to Rs 2,800 crore. BJP led the pack by allocating over 57.6% (more than Rs 700 crore) of this amount to publicity, followed by INC (29.5%), NCP (3.6%), and AAP (1.7%).


Indian political parties are not shy about investing in advertising to secure votes and convey their agendas. The astronomical figures in election expenditure, with a substantial chunk dedicated to publicity, underscore the importance of advertising in modern politics. As elections continue to evolve and adapt to changing times, the role of advertising will remain a significant factor in shaping the political landscape of India.


Source: FactChechecker  

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