The politics of money

Interestingly,the rise in asset values isn’t restricted to Bihar,with the average assets of MLAs seeing an upward swing in almost all states across India. The hikes range from 141% in Chhattisgarh and 283% in Rajasthan (the states that bring up the lower order) to 1,000% in Haryana and 1,170% in Andhra Pradesh between 2003 and 2009. Not surprisingly,Andhra Pradesh is home to the richest MLAs in the country,with average declared assets worth Rs 22.6 crore per candidate.

But does this activity at the state level reflect what was happening to other measures of growth in the country during the same period? India’s GDP doubled between 2003 and 2009. However,since GDP is a flow variable of income and assets are a stock,the better comparator is the market capitalisation of the Sensex,which has increased three times. (Since the stock market reflects a part of the nation’s richest individuals’ wealth,and wealth is a stock variable,it is a better point of comparison.) This implies that,in most cases,the rise in the assets of MLAs across the country is in line with the general upward trend in growth illustrated by the increased market capitalisation.

Back at the state level,a closer examination reveals the performance of individual states and parties. Haryana has some of the richest MLAs in the country (save for Andhra Pradhesh),whose average assets range from Rs 3.87 crore (for the Congress) to Rs 16.28 crore (for independent candidates). This not surprising,given that Haryana has one of the highest per capita incomes in India (excluding small states and Union territories like Goa and Delhi) and,on average,its MLAs declared assets worth Rs 7.74 crore in the 2009 assembly elections.

Chhattisgarh,where MLA wealth has gone up on average by about two times,from Rs 44 lakh to 1.08 crore between 2003 and 2008,still has one of the lowest average MLA asset bases. This is despite the fact that the state has been one of the fastest growers in GSDP terms,averaging about 20% in the same period. In contrast,although Madhya Pradesh’s per capita GDP is about a fourth less than Chhattisgarh’s and its GSDP growth rate 11.6%,its MLAs are 1.5 times richer than those from Chhattisgarh. Similarly,the assets of the MLAs of Uttar Pradesh—a state notorious for lawlessness and slow growth,with one of the lowest per capita incomes—weigh in at Rs 1.46 crore,about 1.5 times that of Chhattisgarh.

One of the expected trends that has emerged is that the candidates of incumbent parties see a larger increase in their assets,than do MLAs from opposition parties. Rajasthan sticks to this rule—the BJP MLAs (the ruling party) saw a four-fold increase between the 2003 and 2008 elections,while the Congress saw their assets double.

So is being rich a factor of importance in predicting election outcomes? It appears not. In Karnataka,the richer Congress-JD(S) alliance was voted out in the 2008 assembly elections. There are other instances of richer candidates being defeated—in Rajasthan,the BJP lost out to the Congress even though its MLAs were 1.8 times as rich as those belonging to the Congress. In Andhra Pradesh,the TDP candidates were almost 10 times richer than the Congress candidates and still lost out. So money cannot buy all; it’s parties that matter,not their assets.

In a period when all states’ MLAs are seeing a rise,on average,in their assets,Orissa is a curious exception. The data shows that the MLAs of the ruling party,BJD,have seen an average loss of 77% on their assets from Rs 4 crore to 94 lakh. There is little to account for this stark contrast and it may be safest to ascribe it to incomplete data and/or the under-declaration of assets.

So,is it fair to say that MLAs are truly representative of their states’ progress? The answer,contrary to popular perception,is yes. For the most part,anyway. The same,however,doesn’t hold true for MPs. By and large,the poorer the state,the richer the MP and vice-versa.

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,in 2004). Can this simply be rationalised away by attributing the rise in asset value to richer new candidates coming into the fray? Might be a question worth asking your MLA/MP on their next constituency round.