Whatever you have thought about Nirmala Sitharaman and the budget she presented earlier this year, one point you have to concede. She is an honest person. After presiding over the government of India’s expenses, running over into lakhs of crores, the finance minister admitted she did not have enough money to fight a parliamentary election.

 Indeed, Indian elections are horrendously costly and it is a wonder how these are fought so lavishly by so many of the contenders. Election funding has always been a tricky subject and there have been twists and turns over the years.

 Where would the money come from, really. There was a time when corporate contributions were legal and corporates were expected to contribute openly and legally, This was cut short by no less a person than Indira Gandhi, who banned corporate contributions to political parties and elections. Subsequently, the ban was scrapped by her son.

 In pursuit of a transparent election umpteen number of proposals were mooted. One of the top line one was state funding of elections. That was not immediately embraced for fear of unwrapping of government finances for ransack by political parties. Even now, the two Communist Parties are favouring such a funding mechanism.

 Leaving the two Left parties, most political parties are queasy about political funding as they embrace money making on the sly. While the BJP is assaulting the concept of illegal money making, it has accepted electoral bonds. But if anything, the mystery about election funding has become even more deeper with the proceedings around whatever we know about electoral bonds.

 A lottery king remains the Lord of the Ring of donors to electoral bonds. Who he benefits, is not yet clear. But obviously, under the smokes screens of matching contributors to beneficiaries, it is still possible to guess who is contributing to which parties — these have to be between the regions of a contributors principal operation and the dominant parties in that region.

 It stands to reason that the south based lottery king should benefit some of the overwhelmingly popular Southern parties. In the east, the electricity distribution company, enjoying a monopoly in the city of joy would bring mirth to the local political boss rather than a distant entity in UP or Chattisgarh.

 The lion’s share going to BJP is not the last wonder either. But some of the regional war lords have made away with consequential booty. Consider as an example the small arithmetic: BJP has to cater to 543 seats along with its allies across the country and collected Rs 8250crore. So collections under electoral bonds per seat it will contest would be around Rs 16 crore if it is taken that BJP will contest in around 500 seats leaving the remaining to the allies. This electoral bond mount is only a small part of the actual amount the Party will be pending for its party candidates.

 In the same way, the Trinamool Congress has collected Rs1600 crore and it has to cater to roughly about 42 seats, plus/minus a few more. So it has a respectable amount of Rs38 crore per seat for the contest. Not bad for the smaller party.

Leaving aside the individual details, which might not be very pleasant for many, the dance of democracy in India is a costly affair. Even with its understated snooty attitude to anything outside of the Western Hemisphere, The Economist magazine of London admits that the current year’s Indian general election could be the world’s costliest. Unbelievably, larger than even the US presidential election.

 The last general election in 2019 is estimated to have cost around $8.6 billion, according to a Bloomberg back of the envelope estimate. The current one, is expected to deliver a bomb at around $12 billion. With a $3.5 trillion economy of the country, the general election should be a hit to the extent of only about 0.15% of the GDP. Small change, most will think.

Not so, indeed, for two reasons. First, a general election invariably pushes up the prices. Since most of the expenses will be at the ground level, and the money goes into the hands of those ground level operatives, it introduces within a small time span some more disposable income.

Percentages apart, infusion of such money all on a sudden into the lowest levels result in a little spurt in demand. In a situation when the prices have been rising steadily for some time, the guardians of the price line must be a little cautious in the situation. Any hopes of a more accommodative monetary policy would be a little out of context.

Secondly, most of the expenses will be in hard cash. Consequently, the expenses will be what can loosely be called in black money. Donors and spenders all will revel in expenses where pan numbers will not be the first point of enquiry. A spike in black money circulation will have its implications.