Sreenivasan Jain: The 'real' cost of spin

Where do the Congress and Bharatiya Janata Party get their publicity and advertising monies from? The current norm of self-declaration of finances by political parties is not providing answers

As part of a somewhat exasperating assignment last week to try and approximate the size of the fabled war chest of the two national parties, I spent some time talking to the heads of advertising agencies and media-buying houses (which buy ad space on TV, print, outdoor and digital media). The ad guys have traditionally always been a good place to start. They come from a culture that is relatively more corporatised and garrulous, compared to some of the other vendors of political parties, say, the private air chartered business or tent suppliers. Which is why the ad budget is one of the few components of the political war chest that inevitably makes its way into the media, despite all the usual cloak-and-daggery that political parties deploy whenever you mention the words "election" and "expenses" in the same sentence.

This year too, in spite of the non-disclosure clause that both parties made their agencies sign, the contours of what the Congress and the Bharatiya Janata Party (BJP) are planning to "officially" spend on public relations (PR) is beginning to emerge.

For a change, the Congress has been quicker off the blocks, signing with the Indian arm of the Japanese multinational ad agency Dentsu for their creative and media buying rights, and Genesis Burson-Marsteller for PR and media strategy. Neither wanted to go on the record about numbers. But Shailendra Singh of Percept, one of the agencies that pitched for the Congress account told me that the scale of aggression the party had in mind suggests a budget of "anything between Rs 500 crore and Rs 1,000 crore". He said "if this strategy was to be applied by a brand like LG or Hero, you would need Rs 500 crore".

With the BJP, the picture is more complex. They haven't zeroed in on who will do their creatives; talks apparently are still on with Piyush Pandey of Ogilvy & Mather and Prasoon Joshi of McCann. They have, however, signed up with Sam Balsara's Madison World for media sales. Balsara was reluctant to talk numbers, but a senior executive of another media-buying house told me that in conversations last November, the BJP was mulling a budget of about Rs 250 crore to Rs 300 crore for their print, TV and digital campaign (the party apparently directly assigns the rights for the outdoor campaign). He got the sense that the Delhi election results may have led the BJP to opt for a delayed launch, which he estimates may not exceed Rs 150 crore.

Naturally, the Congress and the BJP have rubbished the numbers. But prima facie, the figures for both the parties - especially the Congress - don't seem too off the mark, broadly tallying with projections made in the advertising outlook reports for 2014, of which the most recent (and the most optimistic) was released by Madison and its journal Pitch. The Pitch-Madison report, Balsara told me, projects a "dramatic 17 per cent increase in the total advertising market in 2014," from Rs 32,000 crore to Rs 37,000 crore. Balsara says roughly 50 per cent of the jump, around Rs 2,500 crore "is because of the Lok Sabha elections and as many as five Assembly elections, a contribution that comes not just from political parties but from hundreds of individual candidates".

It is, of course, worth bearing in mind that this Rs 2,500 crore is an "official" spend, one of the few substantial outgoes of political parties where payment has to be made largely in cheque. Unlike other major expenses - rallies, travel, personnel costs, cash handouts to voters - paying ad agencies can't be easily rendered invisible in the official party accounts, which now have to be submitted to the Election Commission. But a cursory review of political tax filings suggests the sophistry at work. The BJP's audited accounts for the financial year 2010-11, which presumably should reflect the spending on the 2009 Lok Sabha campaign, only have a modest figure of Rs 34 crore under the head "ads and publicity". The Congress' accounts for the same period are even more ludicrous, saying only Rs 10 crore was spent on "publicity and advertisement". This can only mean one of two things (or both): that payments to ad agencies are being made from other, non-party accounts. And that some components of the payments - especially for outdoor hoardings - are made in cash.

Even if we take those modest figures at face value, where do the Congress or the BJP get the monies from? Based on the Congress' last tax declaration, in 2010-2011, the party had an income of Rs 307 crore, 80 per cent of which came from "sale of coupons". The BJP's statement of the same period shows an income of Rs 168 crore, of which Rs 124 crore came from "voluntary contributions". It doesn't need much imagination to conclude what these categories stand in for. If both parties are collectively spending Rs 600 crore to Rs 700 crore just on PR in 2014, one can only imagine how many "coupons" will need to be sold, and how many unofficial accounts activated. Clearly, the current norm of self-declaration of finances by political parties is not working. Attempts to bring political parties under the Right to Information (RTI) Act have been stonewalled (though I am not entirely convinced, if they do fall under the ambit of the RTI Act, whether this will substantially cut down on the use of dubious funds in elections). At the moment, it appears, nothing - not even the Aam Aadmi Party's increasingly strident rhetoric on the subject - will make a change to the opaque nature of political finances, and the high costs, official and unofficial, of Indian elections.

The writer anchors the ground reportage show Truth vs Hype on NDTV 24X7