Supporters of Gujarat's chief minister Narendra Modi, the prime ministerial candidate for India's main opposition Bharatiya Janata Party (BJP), during a rally being addressed by Modi ahead of the 2014 general elections. PHOTO: REUTERS
India's campaign spend, which can include cash stuffed in envelopes as well as multi-million-dollar ad campaigns, has been estimated at $4.9 billion by the Centre for Media Studies, which tracks spending.
That is triple the expenditure the centre said was spent on electioneering in the last national poll in 2009 - partly a reflection of a high-octane campaign by pro-business opposition candidate for prime minister, Narendra Modi, who started nationwide rallies and advertising last year.
"They started much before, and they are also focusing on states where they are traditionally not strong. They are leaving no area untouched," said N Bhaskara Rao, chairman of the Centre for Media Studies.
The campaign spending for this election could give a boost to the economy, which has been heading for its longest slump since the 1980s. Economists have forecast a second year of growth below 5 percent in the financial year ending this month.
Candidate and party funding in India is opaque and the source of much of the spending is hard to ascertain, but the Centre for Media Studies and other transparency advocates say the main contenders have built up large war chests.
"This election spending largesse will help to boost Indian consumption expenditure over the second quarter of 2014, but this will be a temporary spike," said Rajiv Biswas, the Asia-Pacific chief economist at IHS Global Insight.
India's projected campaign spending is only rivalled by the $7 billion spent by candidates, parties and support groups in the 2012 US presidential race, the world's most expensive, according to data provided by the US election commission.
Spending on previous Indian elections have benefited a wide range of businesses, from media groups and advertisers that rake in campaign-ad revenues to consumer-based firms that capitalize indirectly on the overall jump in spending, such as motor-bike manufacturers and brewers like United Spirits.
India's advertising industry expects to see an $800 million injection during the election season, according to an outlook by the country's largest local agency, Madison Media. That should benefit media firms, such as DB Corp, which owns the high-circulation Hindi language daily Dainik Bhaskar.
Cash hidden in newspapers
Much of India's campaign spend will remain in its thriving black economy.
Rules allow candidates to spend $114,000 on campaigns for a parliament seat but the real cost of winning is about 10 times that, thanks to spending on rallies, fuel and media campaigns that often include payments for coverage.
Indian politicians regularly bribe voters with cash payouts or alcohol to secure their support. Recent state elections have seen innovations such as getting money to voters via mobile phone credit and envelopes of cash delivered in morning papers.
In the last three years, election authorities seized from politicians a total of about $32.65 million in the form of concealed cash, some if it stashed in helicopters, milk trucks and even funeral vans, a former election commissioner said.
The dates for the month-long election starting on April 7 were announced last week, with polls staggered in nine stages to help security forces prevent polling booth fraud.
Despite evidence of vote-buying, India's elections are now largely seen as free and fair on polling day.
However, chief election commissioner V S Sampath said on Wednesday he was worried about "money power" - heavy spending and the use of illegal funds to influence the outcome.
The Centre for Media Studies' spending projections are based on analyses of rising costs in local and state elections in the past five years. It also surveys voters on prevalence of bribes.
Modi fundraising
Narendra Modi's Bharatiya Janata Party (BJP) got off to an early start in campaigning, pushing into the south where the BJP is weak and has avoided spending money in the past.
Modi's BJP-led coalition has a strong lead over the ruling Congress party in opinion polls, but it is unlikely to win an outright majority.
Some of Modi's fundraising is led by a seven-member team, including Deepak Kanth, a former investment banker previously with Citibank in London. This team has organized an online fund-raising drive in India and is also targeting donations from wealthy Indians living in Hong Kong and Singapore.
This team has only raised $4 million, a party source said, but shows how far Modi is casting his net for campaign funds.
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@IndianBuraq: I
Size doesn't give you carte blanche for bribing voters - and as far as "lesser nations" India is still a third World country and desperately in need of toilets/sewers, schools, clean drinking water and other basics - fix that before thumping your chest.
@unbelievable: What a waste. USA spending was ridiculous to begin with but their economy is almost 4 times larger than India’s which makes India’s spending that more egregious.
India is not what you think it is, the oldest continuing civilization in the world with billions of hopeful people jostling for power.Mughals wanted to Islamise India, couldnt, the British wanted to loot it - which they did, but couldnt christianize it.India is huge.Dont compare it with lesser nations.
@Ahmed - Karachi: anything to be proud of if ur pakistani.....tell 1 thing and i will never bother u.... promise......conclusion.....quit trolling.........indian elections are still more fair and peaceful than pakistani....how many blasts when elections were taking in pakistan?? u maked a mockery of democracy dat day...:)
Agree - nothing to be proud of. But a silver lining - this $5 billion will not all go into the pockets of fancy advertisers and TV channel owners. A lot ( most of it stashed black money) will help buy TVs for poor rural voters, a lunch here , a dinner there; a few free drinks of whiskey; some free entertainment ( movie screening); free saris and blankets, etc. Small businessmen like audio/video suppliers, tent and shamiana providers, chair and table providers, wall-painters and simply, paid - hangers-on and paid cheerleaders and paid mobs, all will have a few extra rupees in their pockets! All good for the economy - and this is all black money converted into white for a good cause!!
One has to realize that most of India's voters are in villages and follow very different customs and speak in different languages. Many cant read. So obviously the expenditure will be high. This does not change the reality that most of the money will be spent bribing the voters one way or the other.
Simply money changing hands... The deficit will undoubtedly be covered through un-lawful methods. Nothing to be proud of if you are an Indian citizen.
What a waste. USA spending was ridiculous to begin with but their economy is almost 4 times larger than India's which makes India's spending that more egregious.
@ABS: Well sir , I hope you do understand that some part of this money would go to activities like banners, flags, etc. which would create employment for the poor. Well think of it in this way that some of the balckmoney, horded by the politicians , does come back in the market again.
it a tycoon war birlas etc who own 27% in indiatoday aajtak are spending billions on aap+congress alliance and rest are behind modi.
It makes me feel helpless as a common citizen of the world to see news like this when most of us are living under poverty line without basic facilities like toilets. Its a pity as a nation to me while most of my countrymen will find pride at our spending ability.